NCPA Commentary

Big Business Lobbyists Steamroll Medicare Patients, Main Street Small Businesses

by NCPA | Apr 18, 2014
As published in Op-Ed

By B. Douglas Hoey RPh, MBA
CEO, National Community Pharmacists Association

It is not uncommon for politicians to view policy debates through the lens of Main St. vs. Wall St. We hear this refrain from both sides of the political spectrum. We hear it so often that the phrase becomes cliché. Yet we must be mindful that there are issues that in essence do boil down to the Main St. vs. Wall St. paradigm. One example of this is the pharmacy choice proposal recently suggested—and then withdrawn—by the Centers for Medicare and Medicaid Services (CMS) as part of a rule regarding Medicare Advantage plans and Medicare Part D drug plans for 2015.

The pharmacy choice provision (sometimes referred to as "any willing pharmacy") is supported by Main Street independent pharmacies; consumer advocacy groups, such as Consumer Action and the Medicare Rights Center; some of the largest unions; and a bipartisan list of Members of Congress that span the political spectrum.

Currently, some Medicare drug plans provide beneficiaries an incentive in the form of a lower copayment to utilize the network's "preferred" pharmacy instead of other pharmacies in the network. The problem is the plans don't allow any pharmacy willing to accept the contractual terms and conditions to serve as a preferred pharmacy. They limit these special contracts to cherry picked pharmacies. CMS' own financial analyses found that in many instances these sweetheart deals are actually raising Medicare costs.

Medicare officials drew two conclusions. First, they should prohibit "preferred" pharmacy arrangements from costing taxpayers more than traditional plans with more patient choice. Second, the best way to encourage competition and to lower costs is to allow any willing pharmacy to participate in preferred networks.

Beneficiaries would also be able to choose a pharmacy based on quality and service for the same out-of-pocket expense. According to a survey conducted by Consumer Reports, the magazine's readers ranked independent pharmacies highest in key categories such as speed and accuracy, courtesy and helpfulness and pharmacists' knowledge. While large chain and big box pharmacies as well as PBM-owned mail order companies didn't rank as high in those areas.

Enter Wall Street. Multi-billion dollar corporations called pharmacy benefit managers (PBMs) that run the drug plans don't want to open networks to competition. They engaged in scare tactics claiming huge cost increases if the any willing pharmacy policy is adopted. But if more pharmacies are accepting contract terms that the large PBMs set, that should foster more competition, decreasing costs in Medicare Part D.

While the aforementioned proposal improves the Medicare program for beneficiaries and allows Main St. small business pharmacies to compete, opponents seized on an unpopular aspect of the CMS' proposal as an excuse to throw the whole rule out altogether. CMS proposed to reduce the number of "protected class" drugs. This understandably caused concern among patient advocates and prompted CMS to shelve the idea. Unfortunately, Medicare acquiesced to the scare tactics of the big PBMs and put its any willing pharmacy proposal on hold as well.

While we commend CMS for working so hard to bring the pro-patient, pro-pharmacist any willing pharmacy policy to the forefront, we are disappointed that the agency has tabled it. Given the broad bipartisan and consumer advocate support, now is the time for Congress to introduce and enact Medicare pharmacy choice legislation. Don't further sacrifice patients and Main St. in order to please the Wall St. PBMs.