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Randy Edeker sees difficult days ahead for community pharmacy. Hy-Vee’s executive chairman, who will retire in August after 12 years at the helm of the company, believes that a number of factors that have caused challenges for pharmacy operators will continue to create more problems unless changes are made.
“It’s still an existential fight,” said Edeker, remembering the emergence of DIR fees as a major issue in 2016, when he was chairman of the National Association of Chain Drug Stores. “We’ve made some progress on educating policy makers about what needs to happen, but we’re not there by any means.
“It’s a critical time for pharmacies. We are seeing it every day, with phone calls coming in from independent pharmacists who want to sell. It’s very unfortunate, and it’s telling for the whole of the pharmacy industry. This next year is really going to be a burden.”
Edeker has been an active participant in efforts to persuade legislators and other officials to alter DIR provisions under Medicare as well as other aspects of reimbursement mechanisms that threaten to put many pharmacies out of business.
The situation is better in some states, where over the last three years approximately 150 measures to rein in PBM practices have been enacted. One recent victory came in West Virginia, where Lynne Fruth, chief executive officer of Fruth Pharmacy, led a successful effort to secure changes in the state’s public employee’s benefits plan. Even so, pharmacy faces an uphill battle, according to Edeker.
A PBM bill was on the cusp of passing in Iowa; however, Edeker says misinformation prevented it from getting past the finish line.
“In West Virginia, Fruth Pharmacy got a hold of raw numbers that showed big swings in reimbursements and costs to patients for dispensing the same medication. In the end, it’s the public that’s paying the price, while pharmacies are just trying to hold things together. Pharmacies are just not going to be able to do that when they lose money on many of the scripts they fill.”
Despite the pressing challenges, Edeker points to a tremendous amount of untapped potential in community pharmacy. If that potential can be unlocked in a way that ensures fair reimbursement, the industry should be able to weather the current financial storm, while at the same time enhancing patient access, improving outcomes, and lowering overall health care costs.
“We have to keep looking beyond just dispensing,” he said, adding that Hy-Vee has invested heavily in central fill facilities to free its pharmacists to spend more time caring for patients. Some 75% of the food/drug combination store operator’s scripts are now handled through central fill.
“That capability allows us to expand the scope of practice and deliver health care in rural areas in the Midwest where there is already a shortage of doctors,” noted Edeker. “A lot of routine ailments will have to be handled at the pharmacy counter. It’s not an option anymore.”
Spurred by Edeker, Hy-Vee has set the stage for the next iteration of pharmacy. The company’s diversified health care holdings include a PBM, specialty pharmacy, infusion business, and in-store clinics. In addition, Hy-Vee is empowering its dietitians to better leverage the connection between nutrition and health, and -— in an effort spearheaded by Jeremy Gosch, Edeker’s successor as CEO, and president Aaron Wiese — increasing its involvement in primary care through a pilot program for employees.
“We’re looking at total end-to-end health care,” noted Edeker. “Once we’ve worked that out, we’ll let our customers know that we can deliver quality care and save them money.
“Today you have forces in the health care market that are trying to think differently and make things work, and you also have the staunch supporters of the old system who want to maintain the status quo. It’s going to take Hy-Vee and other large retailers to change things.”
Edeker doesn’t underestimate the enormity of the task. Several years ago, he reached out to Berkshire Hathaway chairman Warren Buffet, the so-called Oracle of Omaha, about the possibility of collaborating to improve health care delivery in the Midwest. The idea (which was proposed years before Berkshire Hathaway’s failed attempt, together with Amazon and JPMorgan Chase, to revamp the system) went nowhere.
“It’s imperative that we look at this situation and say, ‘No, it’s got to change, and we have to be a part of the solution,’ ” Edeker said.
