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.

Promises from the Rose Garden | NCPA Executive Update | May 18, 2018

by NCPA | May 18, 2018

Dear Colleague,

Doug Hoey

It's not every day that the leader of the free world calls out by name the primary source of community pharmacy's frustrations. And, on that same day, the person responsible for the trillion dollars the Department of Health and Human Services spends on health care throws even more heat at the same nemesis. But that is exactly what happened last Friday in the White House Rose Garden and press briefing room.

President Trump released his "American Patients First" blueprint last week, outlining more than 50 actions HHS has planned or is considering to lower prescription prices at the pharmacy counter. Following the president's announcement, his chief health officer, HHS Secretary Alex Azar, went into more detail.

Several parts of the announcement may directly impact community pharmacies. Included in the president's remarks: "Our plan will end the dishonest double dealing that allows the middleman to pocket rebates and discounts that should be passed on to consumers and patients. Our plan bans the pharmacist gag rule, which punishes pharmacists for telling patients how to save money."

Earlier in the press conference, the president called out pharmacy benefit managers by name as one of the contributors to the "broken system."

Later, with Rep. Buddy Carter (R-Ga.), the only pharmacist in Congress, sitting in the Rose Garden audience, Azar pointed out the conflict inherent with PBMs getting paid by plan sponsors (employers, tax payers, and individuals purchasing health insurance), while at the same time being paid rebates from pharmaceutical manufacturers. He suggested that perhaps PBMs should be required to act as fiduciaries.

NCPA has repeatedly said to the administration, Congress, and the media that PBMs contribute to the higher costs of prescriptions. NCPA has long called for more PBM transparency, including fiduciary responsibilities. One of the more recent public expressions of this belief was last November at a Federal Trade Commission workshop dedicated to understanding competition in the prescription drug market, where our concluding remark about the need for fiduciary accountability was: "Ultimately, without any fiduciary obligation, there is no transparency or accountability for PBM conduct."

Much of the media reaction to the president's comments has been lackluster. Pundits apparently expected the White House to come out with more specific policies addressing the high cost of some prescriptions. Pharmaceutical company stocks rose after the president and Azar made their comments. PBM stocks also crept up, which could have been a response to the president and secretary saying they wanted to move Part B prescriptions – which are small volume but huge dollars – to Part D, where PBMs would negotiate with manufacturers.

There are lots of details to work out to see how many of these policy announcements will be finalized, so this definitely is not a time to declare "mission accomplished." However, whichever way you lean politically, having the most powerful person in the world identify PBMs as part of the problem is a good day for community pharmacists.

That's not to say there isn't a tremendous amount of work to be done. There is. The importance of NCPA's advocacy leadership is greater than ever, and we are up to the task. It's also important to consider that the policies announced last Friday won't necessarily result in an improvement in community pharmacy's reimbursement position. That will take redoubled effort to validate our worth to the market based on the value community pharmacies offer, so that we're compensated accordingly (e.g. CPESN®).

The last prominent White House Rose Garden ceremony in which community pharmacy was the centerpiece of the conversation was nearly 15 years ago. That was when President George W. Bush announced that the Medicare Part D program, against NCPA strong objections, would be run by PBMs. On that day, the fox was officially deputized to take charge of the henhouse. Now, though, there is an opportunity to perfect the missteps that were made back then.

Doug Hoey