NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every Friday.

Just Keep the Momentum Going | NCPA Executive Update | April 6, 2018

by NCPA | Apr 06, 2018

Dear Colleague,

Doug Hoey

There's great momentum behind community pharmacies and patients these days. Positive change is within our grasp. We're pushing for transparency in how much plan sponsors (employers, taxpayers, individual insurance purchasers) are paying and how much pharmacies are being paid. We just have to keep the momentum going.

I've saved newspapers over the last six months for a yard project. It turns out that newspaper (both fake news and real news) makes for an excellent barrier against garden weeds. Last weekend I piled 10 cubic yards of mulch on top of spread out newspapers. My eye caught headlines – for example, when was the last time you thought about Anthony "the Mooch" Scaramucci?

For more than two decades, NCPA has been informing and educating not only Congress but the entire industry on the practices of mega-PBMs that contribute to the higher costs of prescription drugs. One of the early educations about the practice of "spread pricing" was done by the late Bob Garis, a pharmacist and Creighton University professor who was a pioneer in exposing PBM practices. Bob worked with NCPA very closely on a number of projects, including this story nearly 15 years ago.

It's been a slow simmer since then, as NCPA has continued to turn up the heat on PBMs. Finally, in the last few months we experienced the boiling point.

Ironically, the heat that seemed to have raised the temperature to boiling were the PBMs' own actions, which have become so outrageous and so expensive that legislators have had to pay attention. Medicaid managed care plans, run on state taxpayer dollars, show wide gaps between what the plan is paying pharmacies and what the state is paying for prescription drugs. In Kentucky, Sen. Max Wise, a champion for small business, said that the state spends $1.68 billion on prescription drugs but only $1 billion is being reimbursed to pharmacies. The rest is unaccounted for, Wise says, because pharmacy benefit managers won't say what they do with it.

The action in the states, as it usually does, has come first. Arkansas, Ohio, Kentucky, West Virginia, Virginia, and Iowa are just a few of the states where pro-patient, pro-competition legislation – led by state pharmacy associations and supported by NCPA and other independent pharmacy organizations – has been enacted, shining a light on the fleecing of state tax dollars and of the state's small business pharmacies.

NCPA's 50th Annual Congressional Pharmacy Summit starts on Wednesday (on-site registration still available). We'll have Medicare and Medicaid panels at the conference. These are the programs where the bulk of the state changes are taking place. On the Medicaid panel, we will have the director of pharmacy services from West Virginia, a state where the pharmacy benefit has been carved out from Medicaid and the state is already saving millions.

For perspective, in the last few weeks, teachers in Arizona, Oklahoma, and West Virginia have gone on strike protesting low pay. In West Virginia, schools closed for almost two weeks during the strike. The issue was resolved with $110 million in teacher raises. Separately, the state estimated that carving the Medicaid pharmacy benefit out of MMC would save $30 million, plus the state economy would be stimulated with $34 million paid to local pharmacies in more reasonable fees. Put those together and a big chunk of the raises for teachers has been covered.

A couple of years ago, I shared a study that said the average human attention span has dropped below that of a goldfish (eight seconds vs. nine seconds). Community pharmacy has been focused on meaningful change for many, many years. No goldfish here! Let's keep the momentum going.

Doug Hoey