One thing that can be said about the state of prescription medications in 2019 is that the pharmacy payment model is complex, convoluted and confusing.
That’s how I began this column last year. And although some progress has been made in moving the model toward a system that better serves patients, that sentence still does apply heading into 2020. Changing the pharmacy payment model — from the creation of innovative medications to helping patients optimize its benefit — has been the National Community Pharmacists Association’s bold statement throughout all of 2019, and we continue to be committed to doing our part to create a better model.
More and more policy makers are digging into where prescription drug spending is going, and they are taking actions when they don’t like what they see. The Centers for Medicare and Medicaid Services (CMS) even issued guidance this year limiting pharmacy benefit manager spread pricing abuses — an issue we at the NCPA have championed and won in Medicare Part D and have long advocated for in Medicaid programs.
Progress, yes, but there remains a long way to go. Patients and taxpayers still have no idea what a prescription will cost at the counter or ultimately cost the eventual payer, and community pharmacies don’t know what they will be paid. The PBM is the only entity with a view of the entire landscape and, too often, consumers, taxpayers and community pharmacies are getting soaked.
In fact, a 2019 study of NCPA members found that a substantial majority of independent pharmacies may close their doors in the next two years, putting the blame on PBMs and their pharmacy direct and indirect remuneration (DIR) fees. It’s a jarring statistic, particularly when you consider the many patients who would be left without perhaps their most accessible health care provider — their local pharmacist. Combine that survey with new data from IQVIA showing that 3.3% of U.S. pharmacies closed between the summer of 2018 and the summer of 2019 and the draconian impact of pharmacy DIR fees on all pharmacies is stark. A study published in the Journal of the American Medical Association Network Open last year illustrated how pharmacy closures — especially independent pharmacies — lead to declines in patient adherence to cardiovascular medications. Medication affordability is often the first place people go to try to solve nonadherence, but in the JAMA study, 59% of the co-pay amounts were under $5 and 75% were under $10. The study discussed several suggestions to address the decline in adherence related to pharmacy closures, including policies that ensure sufficient pharmacy reimbursement for prescription medications, CMS mandating minimum standards for pharmacy reimbursements, and conversion by health plans to an open pharmacy network.
NCPA has been advocating for all three of those policies in Congress, with CMS and in state capitals. We have met and worked with state-level policy makers as well as congressional and White House staff over the years, conversations that continue taking place with regularity. We’ve attracted strong bipartisan support in Congress for a legislative fix to the huge pharmacy DIR issue, and we remain engaged with administration officials and our champions in Congress. As the new data shows, however, time is running out for many pharmacies that are struggling with the opaque, backdoor fees that provide no value to patients or pharmacists, but which pad the massive profits of PBM middlemen.
We hope our survey gets policy makers’ attention and that they take decisive action to rein in PBMs once and for all. An environment where sharp business operators can keep their pharmacy open is not only good for communities, but the JAMA study provides evidence that the health and economic impact of those closures is a problem that won’t be ignored.
As economic pressures on pharmacies remain, it becomes increasingly important that pharmacists be recognized for services they do and can provide to patients. According to the 2019 NCPA Digest report, sponsored by Cardinal Health, immunization is currently the No. 1 patient care service offered by community pharmacy, offering opportunities far beyond the revenue generated by the service. It helps develop patient-pharmacist relationship, ultimately encouraging the patient to rely more on the pharmacist for additional services such as counseling, health screenings, medication therapy management services and traditional dispensing.
And it is a core service set for pharmacies participating in the CPESN USA national network of pharmacies. NCPA cofounded CPESN with Community Care of North Carolina to help pharmacies develop local care networks, demonstrating value by coordinating patient care with broader care teams to help ensure quality and control costs. The network is clinically integrated, allowing community pharmacies to approach plan sponsors to negotiate value-based programs and payment for providing enhanced services.
With steady growth, local CPESN networks have launched and expanded in 44 states across America, and the number of pharmacies in the network now exceeds 2,500. Many of these networks already have direct contracts with medical-side payers that find value in independent community pharmacy’s local relationships and ability to deliver quality patient care. We can help them reach more patients, produce better outcomes and reduce costs. And they can pay us for the care that we — and only we — can provide.
To further this important work, the Community Pharmacy Foundation launched the Flip the Pharmacy program and named CPESN as the coordinating center for grants. Flip the Pharmacy seeks to transform community-based pharmacies away from filling prescriptions at a moment in time to caring for patients over time. Flip the Pharmacy plans to graduate more than 1,000 pharmacies — and affect more than 5,000 — over the next five years, assisted by a practice transformation team. Program goals include targets for non-product-based reimbursement revenue, care plan submissions and various screenings, with the overarching goal of turning community pharmacy into a model that is integrated with other health care providers. Twenty Flip the Pharmacy grant recipients have been announced as part of the program’s first cohort, and I can’t wait to report their progress next year.
When he was installed as 2019-2020 NCPA president in October, Brian Caswell of Wolkar Drug in Baxter Springs, Kan., and luminary of CPESN Kansas, borrowed from President John F. Kennedy and said, “Change is the law of life. And those who look only to the past or present are certain to miss the future.”
It continues to be a difficult climate in the health care industry for just about everybody, including independent community pharmacy. But helping pharmacy break down the walls built between it and the broader health care ecosystem is one of the important advancements toward a pharmacy payment model that empowers pharmacists and consumers alike.
B. Douglas Hoey is the CEO of the National Community Pharmacists Association.