NCPA Commentary

Rural Seniors Need Pharmacy Access Safeguards

by NCPA | Apr 18, 2014

As published in The Country Today

By National Rural Health Association CEO Alan Morgan

And

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

Today, when many Americans fill their prescriptions they will visit a community pharmacist they have known and relied upon for years. The pharmacists will greet them by name, answer their questions, and frequently, lose money each time a prescription is filled. These small business owners are often the backbone of their communities and may be the only health care provider for dozens of miles.

Across rural America, pharmacists are in short supply at a time when changes in health care will increase the number of people seeing doctors and getting access to pharmaceutical therapies. As the most accessible and one of the most widely trusted members of the health care team, pharmacists play an increasingly important role in managing a patient's health care needs. For residents of rural areas, the lack of pharmacists is even more acute.

An analysis by the RUPRI Center for Health Policy and the North Carolina Rural Health Research & Policy Analysis Center found that 91 percent of all community pharmacies are located in rural communities, and that 22 percent are located more than 20 miles from the next closest retail pharmacy.

To date, Medicare Part D has been a mixed blessing for rural areas by providing pharmaceutical benefits to elderly persons formerly without prescription coverage. But at the same time, Part D exacerbated the financial and administrative challenges for many rural pharmacies. To compound this problem, Pharmacy Benefit Managers (PBMs) routinely deny community pharmacists the opportunity to participate in "preferred pharmacy" Medicare drug plan networks. Instead local pharmacies are often contractually obligated to charge higher co-pays to seniors in these plans than "preferred" pharmacies. As a result many seniors are steered toward those pharmacies arbitrarily chosen by their drug plan. Rural independent pharmacies have little leverage with which to negotiate with PBMs or insurers and are usually unable to amend contract terms. This makes contracting with payers a "take it or leave it" scenario where some contracts may force community pharmacies to dispense medication at a loss simply to continue serving some patients.

For those unaware, PBMs are the middlemen between pharmaceutical companies, pharmacies and patients that determine what drugs are part of a prescription benefit and how much they cost consumers. Despite playing such an important role in our health care system, very little is known about PBMs.

After studying the data, Medicare officials discovered that in many instances PBMs' "preferred pharmacy" drug plans were increasing the Part D program's costs.

In response to this situation, we believe Congress should enact legislation addressing two specific areas.

First, lawmakers should ensure that "preferred pharmacy" arrangements do not raise costs to Medicare (and taxpayers). Second, they should let more community providers participate as "preferred pharmacies." Medicare has concluded that is the best way to encourage price competition and lower Part D costs. Known as "Any Willing Pharmacy", the policy would let any pharmacy willing to meet a drug plan's terms and conditions fill patients' prescriptions thereby improving access for seniors, especially those in rural areas.

Independent community pharmacies employ more than 300,000 people, making them an important source of jobs and revenue in the communities they serve. But more importantly, pharmacies are critical to the timely delivery of health-care and pharmacy services to all residents in a community. The proposal to allow community pharmacists to meet the terms and conditions of "preferred" pharmacies is a common sense solution to helping rural seniors manage their medications, lower costs, and preserve a vital health care service.