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By B. Douglas Hoey, CEO, National Community Pharmacists Association
The next year brings with it a lot of unknowns, but the National Community Pharmacists Association’s top priority will continue to be changing the pharmacy payment model. The value pharmacists can provide remains an untapped resource that could address many of the care gaps and inefficiencies in U.S. health care. However, the current payment model must be modernized to realize the benefits that pharmacists can deliver. The current model is covert, complex and (intentionally) confusing. It often misaligns the incentives we should have as health care providers — taking care of patients by providing the highest quality of care possible at the most reasonable price. The enigmas in the high quality plus reasonable price equation are, of course, pharmacy benefit managers who have financial incentives to drive prescription drug prices higher and starve pharmacist providers.
Over half of the average community pharmacy’s business is tied to the federal government in the form of Medicare (35%) and Medicaid (20%), according to the NCPA Digest sponsored by Cardinal Health. That means the results of the recent elections could have an enormous impact on the fate of community pharmacies and the patients they serve.
At the time of this writing, NCPA is focused on legislation that would reform pharmacy payments that include requiring every state to pay NADAC-plus (a fair reimbursement for the cost of dispensing) in Medicaid managed care programs, and requiring the Centers for Medicare and Medicaid Services (CMS) to define and enforce “reasonable and relevant” contract terms in Medicare Part D programs — with oversight of what constitutes reasonable and relevant.
Looking ahead to 2025 and beyond, several wild cards have been introduced into the mix. In the new Trump administration, for example, will those overseeing agencies like the Federal Trade Commission, the Department of Health and Human Services and CMS be friendly to pharmacy? Is a new Department of Government Efficiency going to take shape, and if so, will it be open to confronting PBMs as part of a stated goal of pursuing regulatory rescissions, administrative reductions and cost savings? What are the administration’s health care priorities this time around? President-elect Donald Trump’s first term had encouraging moments for pharmacy, but his plans to end PBM double-dealing were scuttled by some of his advisers.
To borrow from Yogi Berra, will it be like déjà vu all over again?
While we don’t have a crystal ball, we know that NCPA will be working hard to continue to educate the agencies, Congress and the White House on the important role community pharmacists play in providing accessible, quality health care services to millions of patients every day — and the importance of their support to help ensure local pharmacies can continue to care for their constituents. NCPA is a strictly nonpartisan organization, backing those who work to advance our top priorities. That’s the main reason we have so much support on both sides of the aisle for our key priorities.
“We have deep depth,” as Berra would say.
When NCPA held its annual Congressional Pharmacy Fly-In in April, there was little need to explain to members of Congress what a PBM is and what they do. What a remarkable shift from just a few years ago! To keep the pressure on, however, we decided we wanted extra reinforcement.
In June, we released the results of a public poll revealing widespread public concern over prescription drug costs and PBMs. Eighty-four percent of respondents agreed that prescription drug costs are too high, 73% were concerned about PBMs’ impact on drug pricing, and 68% agreed that PBMs are driving up drug costs. Accordingly, we launched an all-out push for payment reform that includes TV ads and digital ads aimed at enlisting patients in this effort. The “PBM Leeches” and “PBM Career Day” spots have generated hundreds of thousands of views — as well as a few chuckles. Our Finish the Fight campaign and the more than 50,000 patient letters that have gone to members of Congress since June are demonstrating how critical these changes are for pharmacists and patients alike. The campaign educated consumers about how PBM business practices drive up drug costs, weaponize formularies by coercing patients to take the drugs that generate the biggest rebate, and exert their market dominance to drive their pharmacy competition out of business.
NCPA is going all out to see that PBM reform is signed into law by the end of 2024. And we’re continuing to seek changes from regulators and in the courts, where we are involved in several cases and legal initiatives on behalf of independent pharmacists.
In 2025, we will be reaching out to new folks in Congress and in the incoming administration to educate them about one of the country’s most important public health assets — the 19,000 independent pharmacies across the country — that can be utilized to help solve public health problems. CPESN USA’s clinically integrated network is key to showcasing how high-performing pharmacies can improve outcomes and help lower overall health care costs. The services CPESN pharmacies can offer are limited only by the needs of payers engaging the CPESN local networks and by the grim prescription reimbursement PBMs offer to their pharmacy competition.
Community pharmacy owners might say a nickel ain’t worth a dime anymore while talking about dispensing fees. OK, that’s another Yogi-ism, in truth, but with independent pharmacies closing at a rate of more than one each day since last year, I think it rings true no matter who says it.
The number of pharmacy choices available to consumers has shrunk by over 10% — more than 7,000 — averaging almost 1,000 fewer choices a year. Consumers are expected to have even fewer pharmacy choices in 2025 as more closures have been announced. Whether it will be in 2025 or the next year, the shrinking number of pharmacy choices and the economic pressure by PBMs at some point may break the system. Some patients are already experiencing long wait times or having to drive many miles to their closest pharmacy. Some patients are being foisted into the world of mail-order pharmacy, where they have to take their chances on their prescriptions arriving unadulterated and on time. The pharmacy closures are a warning that the market is withstanding all it can, and the payment model must change.
Pharmacists and patients are making their voices heard and, by my estimation, employers have work to do too. Don’t just defer to (potentially conflicted) brokers when making choices about prescription drug coverage and PBMs. Be mindful that the mega-middlemen may not pass through their savings or be clear about their pricing. Consider how they reimburse local pharmacies — low or less than the pharmacy’s cost to buy the drug lead to pharmacy closures that contribute to pharmacy deserts, which can ultimately result in employees having limited options for care. Some companies have had lawsuits filed against them by their employees claiming that their PBM caused employees to pay higher costs. We’re watching these lawsuits with a close eye, wondering if they might be a wake-up call for those employers who have gotten addicted to rebates that ultimately raise the costs of health care to employees.
Community pharmacies and their teams are innovative, efficient and resilient, but they aren’t invincible. Reforms to the broken payment model are needed if we are to ensure successful pharmacies and healthier, happier patients. “Independent pharmacy is a premium product,” said Jeff Harrell as he was being installed as NCPA’s 2024-25 president. “We deserve to be paid like that premium product.” I couldn’t agree more.
“It’s tough to make predictions, especially about the future,” Yogi Berra may or may not have said. It’s a phrase I can’t help but think about while reflecting on the ways things might change for pharmacy in the months and years ahead. Community pharmacy might be “overwhelming underdogs” (my final Yogi-ism, I promise) in the fight against PBM-insurers, but it’s a fight we’re pursuing relentlessly. It’s worth it for the small businesses that give back both economically and civically to their communities and, most of all, for the patients these pharmacy teams serve.
