As the new year begins, retail pharmacy operators are confronted with a host of pressing issues that will affect the measure of success they can achieve as health care providers and business enterprises. Implementation of the Affordable Care Act; the nation’s long-term budget and deficit problems; and the state of the economy, to name just a few, will all play a role in shaping the industry’s ­prospects.


retail pharmacy, health care, Affordable Care Act, economy, Jeffrey Woldt, pharmacy advocates, community pharmacists, prescription drugs, pharmacy care, Centers for Medicare and Medicaid Services, health care spending, Prescription Drug Use, Medicare expenditures, Douglas Hoey, National Community Pharmacists Association, medication adherence












































































































































































































































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Inside This Issue - Opinion

The overarching concern for retail pharmacy

January 7th, 2013

As the new year begins, retail pharmacy operators are confronted with a host of pressing issues that will affect the measure of success they can achieve as health care providers and business enterprises. Implementation of the Affordable Care Act; the nation’s long-term budget and deficit problems; and the state of the economy, to name just a few, will all play a role in shaping the industry’s ­prospects.

Even as pharmacy advocates work to influence thinking on those questions and other issues, they need to address the over-arching concern about the profession’s standing in the eyes of health care payers and their understanding — or lack of it — of pharmacy’s ability to help limit total health care expenditures.

Community pharmacists are well regarded by patients. In a recent Gallup Poll about honesty and ethics in various professions, pharmacists ranked second, behind nurses, with 70% of respondents giving them a rating of high or very high. It is the tenth straight year they have finished among the top three in the study.

But public regard doesn’t necessarily translate into clout with the people who foot the lion’s share of the bill for health care. The task at hand is to build a compelling case for the value generated by retail pharmacy, one strong enough to convince payers that prescription drugs and the pharmacy care that maximize their effectiveness are a good investment.

One point to be emphasized is that even at $258.6 billion in 2010, according to the latest projection from the Centers for Medicare and Medicaid Services, prescription medications represent just 10% of the nation’s $2.6 trillion in annual health care spending.

Despite being a frequent focal point for criticism about rising costs, prescription pharmaceuticals and pharmacy care are now in line with the rest of the system. With the widespread use of generic medications, CMS estimates that expenditures on prescription drugs advanced 3.5% in 2010, below the 3.9% increase for health care as a whole.

Those figures don’t take into account the power of pharmacy care to improve the well-being of patients and rein in costs in other health care categories. An expanding body of research, including key contributions by CVS Caremark and Walgreens, supports that ­conclusion.

The Congressional Budget Office has published a report that shows government officials are starting to see the light. “Offsetting Effects of Prescription Drug Use on Medicare’s Spending for Medical Services” asserts that a change is needed in the way the budgetary impact of legislation related to prescription drugs is calculated. After evaluating dozens of recent studies, CBO found that there is now enough evidence linking shifts in prescription drug use and changes in spending for medical services to justify a new approach.

Going forward, CBO will project an offsetting impact on Medicare expenditures for other services when evaluating bills that involve prescription medications. As a rule of thumb, CBO estimates that a 1% increase in the number of prescriptions filled by beneficiaries would result in a decline of one-fifth of 1% on Medicare spending for other health care services.

In time, the change may come to be seen as a turning point, signalling a move away from the static scoring system customarily used by CBO. Adoption of a dynamic model that takes into account the long-term benefits, financial and otherwise, that appropriate use of prescription medications delivers would be a boon for retail pharmacy.

“CBO’s new analysis represents the tip of the iceberg in terms of the savings community pharmacists can produce for Medicare and other health plans,” says Douglas Hoey, chief executive officer of the National Community Pharmacists Association. “CBO examined only the quantity of prescriptions filled, not the qualitative benefits of strong patient-pharmacist relationships in helping patients take their medication appropriately. For years private research has documented both patients’ preference for their local community pharmacy as well as the cost-savings potential of face-to-face patient consultations to maximize the health benefits of prescription drugs.”

With its unparalleled ability to connect with patients and drive medication adherence, retail pharmacy must seize the initiative and convince payers to open their eyes to the very real benefits that accrue with the proper use of prescription medications. A suitable investment in pharmacy care will result in healthier patients and lower total costs.

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