The tremendous challenges and opportunities facing our nation — both directional and financial — translate into challenges and opportunities for chain pharmacy.


National Association of Chain Drug Stores, NACDS, Carol Kelly, chain pharmacy, chain drug stores, government affairs, public policy, Patient Protection and Affordable Care Act, ACA, Medicare, Medicaid, CMS, MTM, health care coverage, Part D plans, Tricare, medication reviews






































































































































































































































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Inside This Issue - Opinion

Advancing Rx care in a precarious policy landscape

February 18th, 2013
by Carol Kelly

The tremendous challenges and opportunities facing our nation — both directional and financial — translate into challenges and opportunities for chain pharmacy.

Following the most recent November elections, our country has retained the same set of political players to address many of the same fiscal issues that continue to perplex the nation’s government. As a result of the election two points are clear: The implementation of the Patient Protection and Affordable Care Act (ACA) will proceed apace, and entitlement reforms will also be front and center, presenting clear challenges and opportunities for NACDS ­members.

During the course of this year we face something we call the “triple threat” to the nation’s fiscal situation: the need for a debt ceiling increase, the March 1 sequester of government funds and the expiration of funds for federal government activities on March 27.

For the moment the debt ceiling increase crisis has been pushed off, probably into August. If the sequester kicks in under current law on March 1, Medicare payments across the board — including for Part B drugs, immunizations and Part D plans — will be cut 2%, with Medicaid off the table.

At the same time the Department of Defense will be subject to reductions of about $52 billion until year’s end, exerting increased pressure on the Tricare program.

Finally, with an expiration of federal government appropriations by March 27, some accommodations on government funding will need to be reached.

Republicans are focused on deficit reduction through entitlement reforms, while Democrats discuss entitlement issues but insist that more revenues must be raised from upper-income Americans to address our fiscal crisis.

In this environment what does NACDS do to advocate for its members?

We discuss the importance of partnership with our industry to provide more high-quality and cost-effective care for ­patients. We discuss the $290 billion medication adherence problem of our nation. We promote the increase of generic drug use, medication therapy management, the immunization capabilities of our members and disease screenings offered in retail settings for patients throughout the nation. We also promote the unsurpassed value of face-to-face interactions with patients, and the need to address practices of some pharmacy benefit managers that could jeopardize those important relationships.

In the near term our industry will be challenged to maintain its core function of dispensing medications. Policy makers are being very clear that they wish to pay for prescription drugs and dispensing of prescriptions on the basis of cost — so whether the metric is average manufacturer price (AMP), national average drug acquisition cost (NADAC) or average acquisition cost (AAC), the only good news here is that the Centers for Medicare and Medicaid Services (CMS) is maintaining increases in dispensing fees for states moving to product reimbursement on the basis of cost.

Six states have implemented AAC, nine are in various stages or doing so, and at least half the states have told the Department of Health and Human Services they wish to move to this payment basis.

We expect CMS will make NADAC available for state use during the first half of this year, and the AMP rule and new upper payment limits on that basis will follow later this year. That estimate, of course, is subject to change.

At the same time that reimbursement for our core service is being dramatically changed pharmacy has unprecedented opportunity before it.

The transformation of the health care environment, with a push toward patient-centered coordinated care models, along with a projected shortage of primary care physicians, has created an impetus to expand the role of nonphysician health professionals to meet the demands of the up to 30 million newly insured patients through the ACA.

There has been an evolution in the pharmacy care services provided by NACDS members, spanning the entire continuum of care, from prevention and wellness services through chronic disease management, as well as external recognition of this role. One barrier to this activity by pharmacies and pharmacists is the lack of provider recognition under Medicare Part B for pharmacists.

We have a plan in place to change this over time through our advocacy efforts with the Congress and CMS for services that can readily be provided in the retail setting. We will also in the year ahead be especially focused on the implementation of the ACA for our members.

The states are in the process of deciding whether to increase their Medicaid programs in regard to their ability to provide coverage with a 100% matching rate by the federal government for three years and for individuals up to 133% of the poverty level.

They are also in the process of deciding whether they will run the insurance exchanges in their states (aka “marketplaces”) or will work in partnership with the federal government or permit the federal government to run them. All of this activity will have a tremendous impact on the types and quality of health care coverage provided in the states.

I end with two pieces of particularly good news. Recently the Congressional Budget Office (CBO) did something it does rarely — it projected an “offset” in the Medicare program in Parts A and B for an increase in the number of prescriptions filled by beneficiaries under Part D.

In real world terms, CBO’s analysis means in the near term that, nationwide, a 1% increase in prescription drug utilization would lead to an overall decrease of $1.7 billion in overall health care costs, or a savings of $5.76 for every person in the United States.

The second piece of good news is that CMS released a study showing that in comparison to Medicare beneficiaries with chronic obstructive pulmonary disease or congestive heart failure who did not receive any MTM services in 2010, those who were enrolled in MTM programs — particularly those who received annual comprehensive medication reviews — experienced significant improvement in the quality of their drug regimens and costs were saved.

If the word on the importance of medication adherence has reached the CBO and CMS, can expansion of our industry’s role in patient care be far behind?

CAROL KELLY is senior vice president of government affairs and public policy at the National Association of Chain Drug Stores.

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