SCOTTSDALE, Ariz. — Proactivity. That was the common theme bridging presentations between H-E-B’s Bob Loeffler, incoming chairman of the National Association of Chain Drug Stores, and featured speaker Jeff Strong, Johnson & Johnson’s chief customer officer, during the closing business session at the 2011 NACDS Annual Meeting Tuesday morning.
That’s the focus of today’s NACDS, Loeffler said — proactively positioning the benefits that retail pharmacy can realize for overall health care on Capitol Hill. NACDS has made great strides to that end with its recent RxImpact Day, where more than 350 pharmacy advocates touted the benefits of pharmacy to more than 270 congressional officers. Such initiatives as these are invaluable, Loeffler said. It’s become the “new normal,” he said.
NACDS in the coming year will be looking to create that next level of normal, Loeffler added, with a committed focus on fostering a strong business community, creating a value proposition easily understood by D.C. bureaucrats and successfully communicating pharmacy’s inherent healthcare value to all stakeholders.
There’s a lot riding on creating that new normal, Loeffler noted. Educating policymakers around pharmacy’s value proposition still is paramount, especially as 1-in-5 Congress leaders were newly elected in 2010. “Now we need active diligence,” Loeffler said. Because if the pharmacy industry doesn’t continue to aggressively establish that value proposition often and always, opposing interests will have that window of opportunity to influence legislation that would run contrary to the business of retail pharmacy.
One of the greater challenges facing NACDS and the pharmacy industry today is translating that value proposition into the kind of budget speak Congress can understand. NACDS has studies that show how programs like medication therapy management can save between $10 and $14 for every $1 investment, but the trick will be in translating that message so that it resonates on Capitol Hill.
This will become even more critical in the coming months as the Centers for Medicare and Medicaid Services begins accepting public comments around AMP reimbursements. NACDS expects a lively debate, Loeffler said. And the stakes are high — if the final AMP reimbursement ends up being less than it is today, many pharmacies in many states will go from razor-thin 2% pharmacy margins to close-to-zero margins, if not no margins at all.
Earlier in the morning, Strong made the case of proactive collaboration among suppliers and retailers. While many NACDS members have been heartened by the pending recovery to various degrees, most still are facing challenges, he said. That potentially has fostered a business climate that runs contrary to successful collaboration.
In the current business climate, retailers and suppliers alike have been focusing on cutting costs and eking out the most amount of profit with the least amount of investment. That kind of environment does not foster innovation, Strong said, and that needs to change. “I believe we’re spending too much time and energy” arm-wrestling each other for that ever-diminishing slice of earnings growth, he added. Going forward, retailers and suppliers need to partner on some out-of-the box thinking to the benefit of both partners.