NACDS chairman: Assert pharmacy’s role in seeking solutions for costly health system

Larry Merlo addresses attendees of the 2010 NACDS Pharmacy and Technology Conference.

SAN DIEGO If there ever was a time for retail pharmacists to assert their role in a broken and increasingly costly healthcare system, that time is now.

That appeal to chain pharmacy and supplier executives was issued by Larry Merlo, chairman of the National Association of Chain Drug Stores and president of CVS/pharmacy, at the kickoff of the 2010 NACDS Pharmacy and Technology Conference Sunday. In an era of health reform and clearly unsustainable rises in health costs, Merlo told NACDS members in San Diego, “the pharmacist is front and center as an important part of the solution.”

Merlo’s speech at the gathering’s first general business session was an urgent call to action. “We must define the value for pharmacy in a reformed healthcare-delivery system,” he said. “We’ve identified several areas where pharmacy is in the best position to effectively and positively contribute to all three pillars of that healthcare equation: access, quality and cost. But most important of all, we must ensure that the value of the pharmacy industry and its pharmacists [is] recognized by payer reimbursement policies –– not just for the products we sell but [also] for the services we provide.”

Merlo, who succeeded Andy Giancamilli as NACDS chairman in April, ticked off some of the huge challenges facing the U.S. healthcare system. “The current cost of chronic disease in this country is over $1 trillion,” he noted. “Even more frightening is the fact that chronic disease in the United States is projected to grow by 42% over the next 20 years, and cost over $4 trillion, putting it in the ‘epidemic’ category from my perspective.”

Adding to those skyrocketing costs –– which must be borne by public and private health plans and patients themselves –– are the costs arising from patient nonadherence and noncompliance with medication therapy, Merlo noted. “Three-out-of-4 Americans don’t take medications as directed ... and 1-of-3 never even fill the script. Nonadherence for our chronic disease population alone ... is expected to cost the U.S. healthcare system $290 billion in avoidable and costly health complications.”

Also weighing on most Americans, Merlo said, is the fact that “growth in healthcare premiums versus wages over an eight-year period” shows “premium costs outpacing wage growth by a factor of four times.”

Community pharmacy, deployed as a front-line health resource in collaboration with doctors and other patient-care stakeholders, can help solve some of those tough challenges, according to the NACDS chairman. “We’re positioned to help control the costs of health care by advocating for the value of what I’m calling pharmacy care,” Merlo said. He defined pharmacy care as “the cost-effective treatment of disease, particularly chronic disease, through better mechanisms to promote adherence and effectiveness.”

Calling health reform “a good thing for the country and for our industry,” Merlo nevertheless warned that the overhaul would pose challenges for pharmacy operators. For instance, he said, “as the government grows as a payer, we can expect to see further margin pressure on reimbursement rates."

“If you look at the basic fundamentals of reform –– quality, cost and access –– it is clear that we have only tackled one of the three reform pillars,” Merlo asserted. “Pharmacy has the opportunity to be a key contributor to lowering healthcare costs over the long term. If we agree that expansion of access makes sense, we need to begin the work on the cost and quality side of the equation.”

On the plus side of health reform, added NACDS’ chairman, “expanded coverage will drive utilization for 32 million Americans currently uninsured, and that will improve health outcomes. We should keep in mind this is on top of the baby boomers hitting senior citizen status; and the fact that the over-65 population is expected to grow 65% by 2025, further increasing the need and use of prescription medications,” he added.

Health reform also is driving more rapid adoption of electronic prescribing and other health information technologies, Merlo pointed out, along with collaborative-care models, increasingly effective pharmacogenomics and such pharmacy-rooted quality-of-care concepts as medication therapy management.

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