PHARMACY

New bill aims to help independent pharmacies to band together, negotiate prices for Rxs

BY Michael Johnsen

KINGSTON, Pa. — Rep. Tom Marino, R-Pa., on Monday propositioned a bill that would allow independent drug stores to band together in an effort to increase their collective pharmaceutical buying power.

“It’s not a level playing field,” Marino asserted as he announced the introduction of HR 1946, the Preserving Our Hometown Independent Pharmacies Act. “This bill sets out to level that playing field, that’s all,” he said. “It would not cost the federal government or anyone else a penny. As a matter of fact, it would actually lower the prices for independent pharmacies, … and they, in turn, would pass it on to the consumer.”

The bill would amend antitrust law to allow independent pharmacies to band together and negotiate prices for prescription medicine. It also would give them more leverage when they negotiate reimbursement rates with insurance companies and pharmacy benefit managers.

“This vital legislation will help … local pharmacists and small business owners by making three important changes,” stated Douglas Hoey, EVP and CEO of the National Community Pharmacists Association, which supports the bill. “First, it levels the playing field for independent community pharmacies negotiating contracts with billion-dollar corporations, giving them leverage similar to those of large, national pharmacy chains; second, it allows millions of Americans to enjoy the fruits of greater competition and choice of pharmacy, including independent community pharmacies; and third, it supports local jobs, tax revenue and small businesses by keeping in the community healthcare dollars that could otherwise be siphoned out of state by large corporations.”

Hoey pointed to the kind of negotiating clout Walgreens wielded on Tuesday in its decision to discontinue talks with pharmacy benefit manager Express Scripts. Losing almost 8,000 points of service carries greater consequences than losing a handful of participating pharmacies. “For years, small pharmacies have had to endure one-sided, take-it-or-leave-it contracts that can disadvantage community pharmacists with onerous contract terms while impeding true competition for consumers,” Hoey said. “By contrast, large pharmacy chains have a greater ability to negotiate contracts, as evidenced by Walgreens’ recent decision to opt out of the network of Express Scripts.”

Lawmakers who have signed on as co-sponsors include Reps. Lou Barletta, R-Pa.; Howard Coble, R-N.C.; Renee Ellmers, R-N.C.; Jeff Fortenberry, R-Neb.; Louie Gohmert, R-Texas; and Ron Paul, R-Texas.

On Monday, Rep. Marino said he has experienced the personal service offered by neighborhood pharmacies. The congressman is a two-time cancer survivor, and his 16-year-old daughter, Chloe, has cystic fibrosis. “My daughter takes a great deal of medication on a daily basis,” Marino said. “My pharmacist is always there. He knows us on a first-name basis. There have been situations when we have gone away and either forgotten or ran out of a prescription. We just call our pharmacist, he makes the arrangements and we are taken care of wherever we are.”

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PHARMACY

Mark Fitch, Jeff Nornhold join Impax

BY Allison Cerra

HAYWARD, Calif. — Impax Labs has expanded its senior management team with two appointments.

The generic drug maker said that Mark Fitch has joined the company as SVP operations, while Jeff Nornhold will become SVP quality affairs. Fitch, who joins Impax from Nycomed US, brings more than 35 years of pharmaceutical experience to his role. Nornhold, who most recently served as VP quality operations at drug maker Watson, is a 20-year pharmaceutical industry veteran.

Both Fitch and Nornhold will report to Impax president and CEO Larry Hsu.

“We are very pleased that Mark and Jeff have joined Impax to oversee these two very critical areas of our business,” Hsu said. “They are accomplished executives with a strong track record and extensive pharmaceutical and business leadership experience. We have experienced significant growth in the past several years, and their addition further enhances our management team.”

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PHARMACY

Walgreens discontinues negotiations; PBM Express Scripts shocked

BY Michael Johnsen

ST. LOUIS — After Walgreens made its contract dispute with Express Scripts public on Tuesday morning, the pharmacy benefit manager stated it is open to continued negotiations with Walgreens.

"In these challenging economic times, it is critical that we all work together to keep medicines affordable and accessible," Express Scripts’ chairman and CEO George Paz said. "It is shocking to us that Walgreens would back away from the table with six months to go in the current agreement, especially considering that negotiations are part of the normal course of business."

In response to the news, Credit Suisse research analyst Ed Kelly said that the general consensus is that the issues will be settled.

“Walgreens is once again fighting to protect the longer-term profitability of its pharmacy business, similar to the dispute with CVS Caremark last year,” Kelly wrote in a research note released Wednesday morning. “We believe the company’s dispute with Express Scripts will be resolved shortly, as the lack of a deal would clearly harm both companies.”

If renewed negotiations don’t materialize, the parting of ways between Walgreens and Express Scripts would have an estimated 50 cents per share impact on Walgreens’ earnings, Kelly noted, and Express Scripts would be placed at a competitive disadvantage versus other PBMs without the almost 8,000 Walgreens and Duane Reade pharmacy locations in its network.

Credit Suisse maintained its “outperform” rating for Walgreens, suggesting that investors taking advantage of any volatility with stock prices now should reap the benefits by first quarter 2012 if Walgreens hits current earnings projections.

In its statement, Express Scripts challenged Walgreens’ assertion that the proposed reimbursement rates were below the published industry average cost to provide each prescription. “Over the next three years, the costs of nonspecialty branded medications are projected to increase approximately 10% per year [and] more than 30% over three years. The costs of branded specialty medications are projected to increase more than 14% per year [and] nearly 50% over three years, and more than $60 billion worth of branded medications will lose patent protection, opening the door to more affordable generic alternatives,” Paz stated.

However, the PBM is drawing its own line in the sand in preparing to continue on without Walgreens. “On average, another pharmacy within the Express Scripts network is within one-half mile of a Walgreens pharmacy. Even without Walgreens in our network, we meet all client guarantees for access.”

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[email protected] says:
Jun-23-2011 05:58 am

The practice of Pharmacy is really on the decline because of the fact that pharmacists are left out of the equation. Pharmacists currently are not in charge of their profession and that is a major problem. They are paid at a decent salary but are treated like cashiers in the stores. We are professionals and should be treated as such. The Walmarts of the world wouldn't have destroyed the profession if they were pharmacists. The leaders of the direction of the pharmacy practice are more concerned with their profits by negotiating away our respect among other professionals in health care. We should take back our profession.

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