The pandemic has forever changed the consumer’s view of pharmacy.
One positive result of the coronavirus pandemic is that it has forever changed the consumer’s view of pharmacy. Of course, the evolving perception of the role of the pharmacist was already very much in progress. But the pandemic propelled it forward in ways that will have some radical effects on the business model of community pharmacy and how patients view their pharmacy and pharmacist for decades to come.
Patient care offerings
As I write this around Thanksgiving, the Centers for Disease Control and Prevention reports that nearly 163 million doses of the COVID-19 vaccines have been administered and reported by retail pharmacies across federal programs in the United States — not including the millions of doses administered in pharmacies through state distributions. This time last year the whole country (well, most of it anyway) was only hoping for a vaccine to help stop the virus and quell the fear. I’d imagine these vaccines made many people’s “thankful-for” lists this Thanksgiving as we reflected on the last 12 months.
Pharmacies have been a dominant force in the vaccination of America. That will have a lasting effect on the business model of pharmacies going forward. More and more patients are now seeing beyond the prescription and viewing their local pharmacy as a health care destination, whether for COVID-19 immunizations or other services. Together, immunizations and testing are proving key to NCPA’s efforts to help its members address the pandemic, and they’re demonstrating the potential of engaging independent pharmacies in new ways.
More patients than ever before now know that their local community pharmacy offers other immunizations beyond flu, point-of-care testing services like SARS-CoV-2 diagnostic testing, blood glucose, influenza or rapid strep. POCT in particular provides an excellent opportunity for community pharmacies to improve health at the patient and population levels, and, yes, to also enhance revenue. Research from Deloitte has found that POCT is predicted to exceed immunizations as a driver of revenue for community pharmacies.
Pharmacy business models evolving into health care destinations with pharmacist-led services as its centerpiece is underscored by the 100% increase in the number of CLIA-waived pharmacies between 2018 and 2020. And as the demand for these and other enhanced services grows, NCPA is facilitating more pharmacists acting as change agents in the field, sharing their expertise and growing to scale. Indeed, one of the biggest rate-limiting factors for independent pharmacies is not being innovative but rather scaling their innovation among the more than 19,400 independent pharmacies.
Transforming pharmacy practices
Scaling practice transformation is a huge component of NCPA’s well-established goal of Changing the Pharmacy Payment Model. One reason why NCPA’s co-creation (with physician network Community Care of North Carolina) of CPESN USA was prescient was the growing market demand for patient care services from pharmacists. CPESN networks are local networks of pharmacies — because most health care tends to be local — built on the tenets of practice transformation. CPESN is a pharmacy-based clinically integrated network, meaning it improves quality, lowers costs and can negotiate pharmacy provider services with payers. Note that I said payers and not middlemen!
Our next step in Changing the Pharmacy Payment Model was kicking off the NCPA Innovation Center/CPESN Community Pharmacy Fellowship Program, sponsored by Good Neighbor Pharmacy, last year to allow participants not just to peek behind the curtain but to become full-blown (and welcomed) voyeurs of some of the most innovative pharmacists across the nation. Over the course of the intensive 12-month program, fellows learn how industry-leading owners and pharmacists structure their pharmacy services and receive feedback on how to optimize the services they offer back at their home pharmacies. One fellow said that a significant part of the program’s success was “encouraging and inspiring other coworkers and staff workers to level up their pharmacy game and increase the clinical services that we offer.” The fellows emerging from this fellowship program each year will benefit the entire profession as the “touches” they make with coworkers and colleagues accelerate the innovation scaling.
Fighting for pharmacies
The U.S. is the only country in the world that has turned over prescription drugs to the pharmacy benefit managers, and Americans are paying the highest drug prices in the world. At NCPA, we don’t think that’s a coincidence. There is no transparency in how PBMs price medicines, reimburse pharmacies or determine how much patients will pay at the counter. Transparency is essential to any healthy market, but there is very little of it in our prescription drug market. We’re doing everything we can to change that.
NCPA has been fighting to reel in the PBMs for many years. In January 2020, NCPA filed a lawsuit against the federal government (now called NCPA v. Becerra) to stop retroactive pharmacy direct and indirect remuneration fees. This was not an action we took lightly. But the damage caused by pharmacy DIRs escalated to an existential threat to community pharmacies and the patients we treat, and they must be stopped. We’re pleased to have been joined in the lawsuit by the American Pharmacists Association, the Coalition of State Rheumatology Organizations, Fruth Pharmacy, Hi-School Pharmacy Services, Kare Drug and Tyson Drug Co. This will be a marathon and not a sprint, and we appreciate their support.
Success in the courts has provided more opportunities to change the pharmacy payment model. The unanimous Supreme Court decision in Rutledge v. PCMA was further bolstered late this year in North Dakota (PCMA v. Wehbi) with a lower court ruling further affirming state’s rights to regulate PBMs.
In Washington, D.C., there are some fresh glimmers of hope at one agency in particular. NCPA had engaged with the Federal Trade Commission for years, repeatedly calling attention to PBMs, take-it-or-leave-it contracts, patient steering and all the egregious business practices that have grown unchecked. Our advocacy resulted in Congress asking the FTC to review the CVS-Caremark merger, plus NCPA was a plaintiff to block the ESI-Medco merger, but in both cases the agency ultimately let us down.
But under Chair Lina Khan, the FTC is exploring the landscape of monopolies and mergers that have flourished in recent years, stamping out competition and choking the life out of small businesses. And we’re eager to assist with their investigations. NCPA has presented to commissioners and staff in public and private forums and, when the FTC asked for examples of contract terms that may be harmful to fair competition, we helped independent pharmacy advocates submit more than 3,000 powerful statements about how it’s practically impossible to run a business when your biggest competitors are near-monopolies that control your pricing and your patients’ prescription drug choices. NCPA also provided our own comments that helped capture many of these messages and asked the FTC to level the playing field between PBM-affiliated pharmacies and nonaffiliated pharmacies.
A fair, competitive marketplace will lead to stronger pharmacies and better health care outcomes for patients. NCPA believes that the tide is turning in community pharmacy’s favor, toward a more transparent and fair payment model that allows consumers to use pharmacies the way they have used them during the pandemic — as health care destinations. A model that pays for their expertise, accessibility and nimbleness that has been showcased this year by pharmacists and their teams tirelessly helping put a boot on the worst public health emergency in a century.
B. Douglas Hoey is the CEO of the National Community Pharmacists Association.