PHARMACY

FTC testifies on anticompetition potential of an independent pharmacy bloc

BY Michael Johnsen

WASHINGTON — The House Judiciary Committee’s Subcommittee on Intellectual Property, Competition and the Internet on Thursday morning heard testimony regarding H.R. 1946, "Preserving Our Hometown Independent Pharmacies Act of 2011." Originally introduced by Reps. Tom Marino, R-Pa., and Louie Gahmert, R-Texas, the bill is intended to exempt independent pharmacists from antitrust regulation in an effort to bolster their negotiating powers with pharmacy benefit managers.

The Federal Trade Commission testified against the measure, stating that the bill would likely lead to higher healthcare costs due to diminished competition.

"Health plans would be forced to pay higher drug dispensing fees to pharmacists, undermining the plans’ ability to control drug costs … which in turn would lead to higher insurance premiums, or changes in coverage such as increased deductibles or higher co-pays," testified Richard Feinstein, director of the bureau of competition for the FTC. "Although the commission is sympathetic to the difficulties community pharmacies face, the proposed [antitrust] exemption threatens to raise prices to consumers for much-needed medicine, which would have an especially dire impact on seniors," Feinstein said. "It also threatens to increase the cost to employers who provide healthcare insurance to employees and retirees, which may cause those employers to reduce or eliminate benefits. And there is no assurance that the proposed exemption would produce any offsetting higher quality care."

The testimony may prove controversial if the FTC approves the merger between Express Scripts and Medco as early as next week, as many news reports have speculated will happen.

Critics of that merger suggested the PBM created by an Express Scripts/Medco merger would similarly lead to higher insurance premiums and changes in coverage, such as increased deductibles or higher co-pays, threatening to raise prices to consumers for much-needed medicine that would have an especially dire impact on seniors without any assurance that the proposed merger would produce any offsetting higher quality care.

"There are few mergers I’ve ever seen that are as anticompetitive as this meger," David Balto, antitrust attorney and former FTC policy director told reporters Wednesday afternoon during a press conference convened by the Preserve Community Pharmacy Access NOW! coalition — a coalition of pharmacy interests specifically formed in opposition of the proposed Express Scripts/Medco merger. Balto pointed out that as many as 78 Congress members have written the FTC advocating that this merger be disallowed precisely because of its anticompetitive potential. The coalition convened the press conference to call on all state attorneys general to file suit against the ESI/Medco merger should that be approved by the FTC.

Express Scripts early Wednesday filed a Form 8-K with the Securities Exchange Commission that they expect the proposed merger to close as early as next week, suggesting that an FTC decision may be imminent.

According to published reports, attorneys general in New York, Pennsylvania, Ohio, Texas and California already are considering filing suit to block the merger if it is passed without serious conditions.

keyboard_arrow_downCOMMENTS

Leave a Reply

J.PATEL says:
Mar-29-2012 02:11 pm

It is amazing that pharmacies/drugstores only just think that this would have them over a barrel. The situation has been present all along and steadily getting worse but the Corporate owners were too busy counting the money they were making to see the slide in services pharmacists would be able to provide under the payment scheme. Walgreens need to be recognized for their stance on refusing to accept reduced payments (for providing more services) for Express Scipts members. All chains should let the merger occur and then refuse to accept their contract - all members of the merged beast would have to voice their concerns and pay normal and customary prices (let's all abandon $4 generics!). Should the Tail be wagging the dog or should the Dog be wagging the tail?

TRENDING STORIES

PHARMACY

NACDS to Senate subcommittee: Help protect patient choice, preserve pharmacy access for Tricare beneficiaries

BY Allison Cerra

ALEXANDRIA, Va. — The Senate Armed Services Subcommittee on Personnel on Wednesday held a hearing to discuss the fiscal year 2013 defense authorization.

In line with the hearing, the National Association of Chain Drug Stores submitted comments to the subcommittee — which has jurisdiction over all matters relating to active and reserve military personnel, including pay rates, military healthcare and education benefits, among others — regarding cuts to the Tricare program. The White House’s recent proposed fiscal year 2013 budget for the Department of Defense includes a host of changes that would prevent Tricare beneficiaries from obtaining many medications at their community pharmacy and increase cost sharing by as much as $34 for a 30-day supply of medications from a retail pharmacy, NACDS said.

"In addition to unfairly penalizing Tricare beneficiaries who prefer to use local pharmacies, NACDS believes this proposal is penny wise and pound foolish," NACDS said in the comments submitted for the hearing record. "Threatening beneficiary access to prescription medications and their preferred healthcare provider will only increase the use of more costly medical interventions, such as physician and emergency room visits and hospitalizations."

In its comments, NACDS also offered the following proposals:

  • The adoption of other policies to reduce costs without negatively affecting either pharmacy access or health outcomes. "The utilization of generic medications by Tricare beneficiaries is low in comparison with other plans. Modest increases in generic utilization by TRICARE beneficiaries would have a dramatic impact on the DoD budget," NACDS said;

  • NACDS also proposed that DoD conduct a demonstration project on the effectiveness of medication therapy management in reducing healthcare costs and improving medication adherence, or the proper use of medicine as prescribed by a physician; and

  • NACDS recommended the development of a "drug stock replacement" program for community pharmacies that could result in savings of up to 30%. This model, currently utilized by the Tricare mail-order pharmacy, would implement depot pricing for prescription drugs provided at retail pharmacies and would enable DoD to obtain more rebates from drug manufacturers. "NACDS believes using depot pricing for covered prescription drugs provided through the retail pharmacy network would assist DoD in negotiating additional discounts from drug manufacturers, beyond the federal ceiling price (FCP) discounts currently required by law."

"We look forward to working with you on policies that control costs and preserve access to local pharmacies," NACDS concluded.


Interested in this topic? Sign up for our weekly Collaborative Care e-newsletter.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES

PHARMACY

Sens. Tester, Moran, pharmacy groups gather to discuss role of pharmacists in rural America

BY Allison Cerra

WASHINGTON — During a briefing held for the Senate Community Pharmacy Caucus, two senators and two pharmacy groups emphasized how pharmacists located in rural areas of the United States are playing an increasingly important role in delivering health care to their patients.

Sens. Jon Tester, D-Mont., and Jerry Moran, R-Kan., joined the American Pharmacists Association and the National Community Pharmacists Association to discuss how 1,800 independent community pharmacies operate as the only retail pharmacy within their rural community and serve 86% of rural Americans who reside within a 10-mile radius. During the briefing, Eric Beyer, owner Frenchtown Drug, an independent pharmacy in Frenchtown, Mont., spoke to the Caucus on what it means to be a rural community pharmacist.

"Community pharmacies keep rural Montana strong and healthy by providing life-saving medicine, consultations and medical supplies," Tester said. "Today’s event let us know what’s working and what needs to improve so we can take smart, responsible measures to ensure better access to affordable health care."

Meanwhile, Brian Caswell, a community pharmacist with Wolkar Drug in Baxter Springs, Kan., also addressed the gathering by delivering three main points that aimed to illustrate how community pharmacists improve health care in often-underserved rural areas.

"Community pharmacists are a vital part of our nation’s healthcare delivery system, and in many Kansas communities the local pharmacist is a patient’s most direct link to health care," Moran said. "Access to medications, healthcare supplies and the counsel pharmacists provide is very important to the health and well-being of every American. Today’s briefing provided valuable information to Senators as we work to ensure all Americans have better access to affordable health care."


Interested in this topic? Sign up for our weekly Collaborative Care e-newsletter.

keyboard_arrow_downCOMMENTS

Leave a Reply

No comments found

TRENDING STORIES