PHARMACY

Wall Street Journal endorses ESI-Medco merger; retail pharmacy responds

BY Michael Johnsen

NEW YORK — The National Association of Chain Drug Stores and the National Community Pharmacists Association on Monday wrote the Wall Street Journal regarding the paper’s endorsement last week of the Express Scripts-Medco merger approval.

"Pharmacy benefit managers are basically specialty insurance companies for prescriptions, though in recent years they’ve been innovating to lower costs, better coordinate patient care and wring more value out of the health dollar," the Journal editorialized. "The deal’s opponents belonged to the pharmacy guild, which will lose revenue and dispensing fees as benefit managers drive down costs."

The pharmacy associations countered by saying that, "The editorial board hails the ability of the middlemen to ‘lower costs,’ while ignoring that they often act contrary to the healthcare transparency the [Wall Street Journal] espouses."

It’s community pharmacy that drives cost-cutting innovation, not PBMs, the groups noted.

To read the letter to the editor, click here.

For the original WSJ editorial, click here (subscription required).

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AccentHealth launches eight new condition-specific TV networks

BY Allison Cerra

NEW YORK — A health education television network is continuing to expand its condition-specific networks to include eight new offerings.

AccentHealth said that it will focus its attention on arthritis pain, chronic obstructive pulmonary disease, smoking cessation, gout, low testosterone, multiple dclerosis, osteoporosis and overactive bladder, in addition to its current lineup of networks. The digitally delivered content is designed to reach 173 millions of patients in doctors’ waiting rooms each year, the company said. AccentHealth noted it features programming produced by CNN and co-hosted by Dr. Sanjay Gupta and Robin Meade.

Last May, AccentHealth rolled out nine condition-specific networks: diabetes, heart health, men’s health, mental health, senior women’s health, rheumatology, allergies, asthma and gastroesophageal reflux disease.

"Our platform is perfectly aligned with how clients in the health and wellness space have evolved in engaging specific consumer groups — more targeted, more customizable and more interactive opportunities," said Edith Hodkinson, president of AccentHealth’s media division. "Our digital flexibility provides a direct and proven connection to distinct patient communities when and where they matter."

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Squeezing water from a stone

BY Jim Frederick

How do you squeeze water from a stone? That seems to be the goal of the U.S. Centers for Medicare and Medicaid Services in its long quest to cut prescription reimbursements for Medicaid patients by setting new, tighter payment caps for the community pharmacies that dispense those medicines.

At issue is how CMS will calculate future Medicaid reimbursements for generic drugs, using the average manufacturer price of prescription drugs. In its new proposed regulations, the agency — a division of the Department of Health and Human Services — is recommending that payments to pharmacies for those drugs be capped at 175% of the AMP that participating pharmacies pay for those multisource medicines.

CMS is in a drive to implement the new set of caps, known as federal upper limits, and has issued no fewer than seven proposed lists of FULs.

The problem is, many of those lists “would reimburse pharmacies below their drug acquisition costs,” asserted Doug Hoey, CEO of the National Community Pharmacists Association. NCPA’s SVP-government affairs, John Coster, sent another lengthy letter to CMS last week, calling on the agency to consider the constant price fluctuations in many drugs, the disparities in costs that different classes of pharmacies pay for the same generic, and the fact that “some independent community pharmacies could be forced to leave the Medicaid program or close altogether unless federal officials make changes to a proposed regulation relating to the calculation of Medicaid generic reimbursements.”

Boiled down to its essence, independent and chain pharmacy advocates argue that CMS is pushing pharmacies to accept a new and unacceptably low payment level for dispensing generic drugs to Medicaid patients, based on flawed and outdated benchmarks for the prices pharmacies have to pay for those drugs. Last fall, Hoey warned federal health policymakers that the new FUL proposals were “a disaster in the making for Medicaid recipients and the independent community pharmacists who serve them.”

Over the past few months, CMS has made some adjustments in its thinking about the payment caps. But the new FUL proposals still bristle with flaws, according to NCPA.

For instance, “Many PBMs are now unilaterally designating many drugs as ‘specialty’ drugs that can only be dispensed through their own proprietary mail-order pharmacies,” Coster asserted in his letter to CMS. “Many of these drugs could be dispensed through traditional community pharmacies, but PBMs indiscriminately designate them as ‘specialty’ to increase volume through their own mail order-pharmacies where they earn lucrative manufacturer rebates."

“Inclusion of manufacturers’ sales to mail-order pharmacies — masquerading as specialty pharmacies — is quite simply contrary to the law,” the letter charged. “If this is not corrected, manufacturers will have incentives to funnel more drugs through specialty pharmacies if they know they can count these sales toward the AMP and lower the overall AMP.”

Community pharmacy has been fighting this Medicaid reimbursement and AMP battle for a long time. (For a more complete view of NCPA’s position and its view of the threat posed by CMS’ current definition of AMP and FULs, click here.) And a resolution, like a mirage that retreats as you get closer to it, appears as far away as ever.

So, too, does any indication from the feds that they’ll begin to see the folly of trying to force a money-losing proposition on hard-hit small-town and urban pharmacies that rely on Medicaid for a large share of their prescription business. It’s another case of choosing short-term savings — reducing payments for the dispensing of lower-cost generic drugs — over the much greater long-term cost benefits that would come from encouraging more, not less, generic substitutions.

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