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Pharmacy Outlook: Peter Matz, FMI

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Health and well-being, including pharmacy-specific programs, is of the utmost importance to the food retail industry. Unquestionably, supermarkets are a key partner in health and well-being for the communities and customers they serve — not just because of the health and wellness programs they offer, but also due to the number of health professionals they employ. More significant than their growing head count are the gains these health professionals are making in working as a team to advance health and well-being industry initiatives. According to the Food Marketing Institute’s “Retail Contributions to Health and Wellness 2019” study, 55% of stores report that their pharmacists and dietitians are collaborating by referring customers to each other, and 42% make customer-specific recommendations and develop wellness programs ­together.

Peter Matz

Consumers are looking for more than just convenience and easy access to health care. As supermarkets have expanded offerings over the years, our industry has made it convenient for consumers to meet many needs in one visit. However, health care is not simply another SKU that retailers can add to their offerings. Supermarket pharmacies provide a positive competitive market force in delivering affordable and accessible prescription medicines to consumers and patients. These pharmacy and clinic connections with customers provide abundant opportunities for retailers to deepen their ­relationship.

FMI and its members recognize the need to help consumers navigate the abundance of health and well-being offerings within today’s supermarket. Many of FMI’s food policy positions in the legislative and regulatory arena are shaped against a backdrop of improving the health and well-being of the customers serviced by the retail food industry.

Consumers continue to be confused and frustrated with the cost of medicine and don’t fully understand how the pharmaceutical system works. Pharmacy benefit managers are a big part of this complex system. Think of PBMs as the middlemen between health insurance companies, drug makers and pharmacies. They serve as third-party administrators of prescription drug programs for commercial, self-insured, Medicare Part D and state/federal employee health plans.

PBMs were initially created to reduce drug prices by passing along discounts and increasing access to medicine, but a lack of transparency and government oversight has allowed these middlemen to take advantage of the confusing drug distribution system. Now, PBMs use something called direct and indirect remuneration (DIR) fees to extract funds from pharmacies for every prescription filled, and this happens retroactively — weeks or months after the transactions take place at the pharmacy counter. According to the federal government, pharmacy DIR fees have increased by 45,000% in less than 10 years. As a result, patients are facing higher out-of-pocket costs for needed medications while pharmacies are struggling to stay in business.

A medication on which the pharmacy looks to break even or turn a modest, fair profit at the time it’s dispensed can become a loss weeks after the retroactive fee is assessed. This makes it extremely difficult for pharmacies to operate.

With shoppers already trusting their primary grocery store as an ally in health, pharmacies are just another way for retailers to support consumers by enhancing the proposition of total-store wellness. Supermarket pharmacies provide a positive competitive market force in delivering affordable and accessible prescription medicines to consumers and patients.

With that in mind, DIR fee reform is pharmacy’s strong recommendation, and it is sound policy. The time is now to continue to log victories such as DIR fee reform that will achieve real progress on issues facing ­Americans.

FMI is urging Congress to pass the bipartisan Phair Pricing Act of 2019 (H.R. 1034/S. 640), which would eliminate retroactive DIR fees by requiring all of the criteria for pharmacy reimbursement to be determined at the point of sale, assuring that Medicare patients are properly charged and defending pharmacies from the financial uncertainties they currently face.

Visit FixDirFees.com for more information.

Peter Matz is the director of Food and Health Policy at Food Marketing Institute.


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