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 other Friday.

Doug's end-of-summer reading list for pharmacy owners

by NCPA | Aug 10, 2018

Dear Colleague,

Doug Hoey

It's mid-August, and already some schools are back in session. My youngest sister, a teacher/reading specialist, is already busy preparing book reading lists for her students when they start back next week. Remember when you were a kid, and those last days of summer vacation were days to be savored? When you went back to school, you always wrote a "How I Spent my Summer Vacation" essay.

Relax. I'm not asking for a book report, but I do want to take an opportunity to share a few stories you might have missed over the past few weeks. These are stories that affect your business and the pharmacy profession, and they show that here at NCPA, we haven't just spent the summer under a beach umbrella sipping drinks sporting their own smaller umbrella. In fact, almost every one of these stories bears NCPA's fingerprints, for it's been our advocacy with the Department of Health and Human Services, the Centers for Medicare & Medicare Services, Congress, and the media that have brought these issues to light – and many of these stories into print. We never take a vacation from advocating your pharmacy. It's been a productive summer.

Summer hasn't been fun for PBMs, though. For years, NCPA has brought attention to PBM business practices that are contributing to the higher cost of prescription drugs. Now, PBMs are trying to evade scrutiny from the Trump administration, the Federal Trade Commission, Congress, and one billionaire investor.

This past week, Carl Icahn, the corporate raider who first caught my attention when he threatened a hostile takeover of the oil company headquartered in my hometown when I was a pre-teen, and whom Forbes calls an "activist investor," went public with his opposition to the proposed Cigna/Express Scripts merger. He wrote an open letter to fellow Cigna shareholders, saying that the PBM business model is a "rigged game with conflicting incentives that might actually be pushing up drug prices." Sound familiar? His letter continues: "The recent proposed rule to remove the safe harbor protection for rebate payments is a clear shot across the bow for the PBM industry and occurred after the signing of the Cigna/Express Scripts merger agreement." Icahn went on to say that he believes "the PBM industry will move to an entirely fee-based model over time." Mr. Icahn is onto something. Changing the current byzantine pharmacy payment system to one that is transparent and understandable to the average person is an NCPA goal.

That's not all. In late July, the House Energy and Commerce Committee asked the FTC to review PBM mergers and how they've affected prices for consumers. That request is one result of NCPA briefing members of Congress about the effects of PBM consolidations on your pharmacy business. The requested review is welcome news. We know that a thorough review will show the FTC what we're been saying all along: PBMs have too much control, and consumers have too little.

Here's another, from the New York Times: If HHS Secretary Alex Azar has his way, manufacturer rebates may be on their way out. The Trump administration has taken the first step toward eliminating the "safe-harbor" provision that allows rebates to be paid in Medicare's Part D drug program without violating federal anti-kickback laws. Good news, and this is a good piece on why so many are seeing the light on the rebate issue.

And one more: Remember that beach classic song "Wipeout" by the Surfaris? (Yeah, I always thought it was the Beach Boys, but I digress.) I had to smile when the author of this article in The American Prospect commented that the summer has been just that for PBMs – a wipeout. He makes a great comparison that you can pass on in explaining PBMs – "When I go to get Lipitor at the pharmacy, the PBM makes $50. When I get a TV at Walmart, Visa, which is doing the same thing as a PBM, connecting markets through a network, gets $1." He gets it and is asking the right question.

Not exactly beach reading, but these are stories and issues that a well-informed pharmacist needs to know. I suspect there'll be more of these stories in coming days – and maybe some welcomed change, too. You can bet NCPA will be engaged – pushing, informing, and advocating for you.


Doug Hoey

P.S. This is important: If you haven't completed the 2018 Community Pharmacy Impact Census survey, please do it today. It takes no more than eight minutes and you can do it right on your phone. We're days away from the deadline (we've extended it to next Friday).