Could PBM merger battle get any hotter?
Will the merger of Express Scripts and Medco go through? Not if pharmacy lobbyists can stop it. There’s nothing new about the fact that different industry groups connected with retail pharmacy or health care can hold strongly opposing views about what’s good or profitable for their own members. But for undisguised hostility and tit-for-tat charges and countercharges, nothing comes close to the long-running feud between independent pharmacy and the pharmacy benefits management industry.
It’s trench warfare. On one side: the National Community Pharmacists Association, chief lobbying and advocacy group for the nation’s 24,000 independent pharmacies. On the other: the Pharmaceutical Care Management Association, which lobbies on behalf of PBMs.
For years, NCPA has charged that the PBM industry is trying to force independent drug stores out of business through restrictive networks and rock-bottom prescription reimbursements, while engaging in deceitful, opaque and even fraudulent business practices that drive the nation’s prescription costs up, not down. PCMA counters that independents are the real culprit, keeping prescription prices artificially high, reaping big profits and hiding behind “special legislative protections” to avoid competition and the “savings” that PBMs can provide. In an ad campaign last year, PCMA billed its lobbying battle against “the drug store and drug company lobbies” as a fight by “America’s small businesses” to keep “special interests” from “KOing affordable health benefits.”
It’s an interesting argument, given the relatively high levels of profitability enjoyed by the PBM industry versus independent pharmacy.
Through NCPA and other lobbying and advocacy groups, independent pharmacists have fought a long and sometimes bitter battle to preserve an equal playing field against a sea of competitors. Threats to the survival of owner-operated community pharmacies multiplied with the rise of dominant national pharmacy chains like Walgreens, CVS and Walmart, but those challenges, while grave, are at least retail competition-driven and are dealt with on a local-market, store-by-store level.
Many independent operators have successfully coped with incursions by their better-financed multi-market competitors by playing up their personal-service capabilities, their deeply rooted connection to local customers and their powerful image as community health care resources. They’ve also gotten better at adopting the sophisticated merchandising and marketing tools offered by their wholesale suppliers to help neutralize some of the advantages wielded by a Walmart or a CVS.
Over the past two decades, however, independents have faced an even bigger existential threat to their long-term viability with the rise of managed care. PBMs that can dictate market terms to participating pharmacies – and steer millions of plan-member patients into their own mail order prescription centers or into restricted networks of pharmacies willing and able to meet those terms – have had a devastating impact on the indies in some markets, and driven down profit margins for both chain and independent pharmacy alike.
If anything, the proposed merger of Express Scripts and Medco Health Solutions has intensified the rhetoric. First announced last July, the deal would combine two of the nation’s three largest PBMs and create a pharmacy benefits giant with a network covering some 135 million members, eclipsing rival CVS Caremark as the nation’s largest PBM.
Independents, who stand to lose the most under such a scenario, are vehemently against the combination. NCPA member Joseph Lech, owner of Lech’s Pharmacy in northeastern Pennsylvania, warned that the deal would mark a “tipping point” in PBM consolidation that would “harm patients by reducing choice, decreasing access to pharmacy services and ultimately leading to higher prescription drug costs paid by plan sponsors and consumers.”
NCPA has some powerful allies in this fight. Among them: the big chain pharmacies its members compete against. A radio ad from the National Association of Chain Drug Stores warned Washington, D.C.-area commuters and policymakers that a combined Express Scripts and Medco would enjoy “unprecedented power over drug supplies, drug prices and access to … medicine” – to the detriment of health plans, employers and consumers.”
A growing chorus of lawmakers in Congress has also expressed reservations about the proposal to merge the managed-pharmacy giants. The latest development: in late January a group of seven Republican and Democratic U.S. representatives wrote to the Dept. of Defense to voice concern that costs for the military’s Tricare program could rise if the deal goes through [Tricare’s pharmacy benefits are administered by Express Scripts].
“We are concerned these limitations would undermine Tricare’s negotiating leverage and limit Tricare’s ability to demand a quality prescription drug benefit,” the congressional lawmakers wrote. “There is little evidence that increased PBM market concentration will significantly lower costs for consumers or the American taxpayer.”
What’s more, noted the representatives, the merger “would further reduce competition in the already concentrated PBM market and could lead to higher prescription drug costs, limited patient choice and inferior service.”
What to do if a robbery occurs
Don’t panic. That’s one fundamental piece of advice pharmacy crime experts have for pharmacy technicians, pharmacists and their colleagues in the event that their workplace is hit by an armed robber.
It’s about staying calm — even in the face of a gun-wielding criminal demanding drugs or money — and knowing in advance how to respond. “The best advice that I can give is that they follow the individual’s commands, that they maintain their calmness and that they don’t try to intervene and stop the individual,” said John Gilbride, director of law enforcement liaison and education for pharmaceutical maker Purdue Pharma, which sponsors an information-sharing website on pharmacy crime called RxPatrol. “Give them what they’re looking for, let them walk out the door, and be the best witness for the police.”
Over the past four years, the National Community Pharmacists Association and Purdue have teamed up to help pharmacies protect stores, staff and patients against robberies and other crimes. In 2010, the two organizations launched a new campaign, dubbed “REACT,” to help pharmacies plan for and thwart crime.
REACT stands for a list of recommended actions that pharmacists and pharmacy techs should take in the event of a robbery in progress: remain calm, eyewitness, activate alarm, call police and take charge.
Megan Sheahan, PharmD, director of professional affairs for the Pharmacy Technician Certification Board said REACT is “a very good plan to follow” in the event of a robbery. However, she added, whatever emergency plan is adopted, staff should “make sure that it’s modified appropriately, that everyone knows their own role … and that the whole team functions well together.”
Once the threat is out the door, Gilbride said, there are key steps that must be taken quickly to improve chances that the perpetrators are eventually caught and that threat is removed from the community. The first is calling 911; the second is locking the doors and preserving the crime scene by “not touching or disturbing anything,” Gilbride warned. “They should also be prepared to take notes to describe the individual … because peoples’ recollections in times of stress vary greatly.
Give out a pencil and paper right afterward so everyone can write down, while it’s fresh in their minds, [the robber’s] height, weight, hair, any distinctive markings like scars or tattoos.”
In most cases, the security expert said, “there’s all these little indicators, and one person most likely will not pick up on all of them. It will be a combination of identifiers, and whomever this individual comes in contact with will remember different things.”
“Of course, if anybody is injured, the most important thing is getting them assistance. Then all these other steps come into play. But the main thing is to maintain the safety of the employees and the customers,” he said.
Following a robbery, technicians also are urged to call the Crime Stoppers Hotline at 888-4RxTIPS (888-479-8477) to provide information and a description of the suspect.
Watson to open global R&D technology center
PARSIPPANY, N.J. — Watson Pharmaceuticals is planning to open a global research and development technology center.
The center will be a 32,000-sq.-ft., 50-acre complex consisting of lab, production and office space. The drug maker said it primarily will be used for developing generic pharmaceutical products, in particular for inhalation technology and respiratory products, with the ability to conduct formulation development and analytical testing.
The drug maker said it intends to initially invest about $4.5 million in outfitting the facility, which will be based in North Brunswick, N.J.
"The location of the new global R&D technology center will enable Watson to leverage our proximity to such educational centers of excellence as Rutgers University," Watson president and CEO Paul Bisaro said. "This will enable Watson to establish collaborations with University departments including pharmaceutics, chemistry and engineering and permit us to benefit from the talent pool in the heart of the pharmaceutical industry of New Jersey."