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.

Changing the pharmacy payment model: As easy as ... the Krebs cycle? | NCPA Executive Update | January 11, 2019

by NCPA | Jan 11, 2019

Dear Colleague,

Doug Hoey

It's overly complex. It's overly cumbersome. And, most of all, it's overly covert. No, I'm not talking about the Krebs cycle or the U.S. Tax Code. I'm talking about the pharmacy payment model.

Consumers are left in the dark. Pharmacies are left in the cold. And, payers are left reaching for more cash. All in all, it's a hot mess, and it's NCPA's prime target for change.

For pharmacists, and especially pharmacists in independent community pharmacies, the fact that the pharmacy payment system is a mess is no secret. But that secret is out. Here are some examples, just since the start of 2019:

  • A Wall Street Journal investigation (subscription required) finds that health insurers and PBMs kept $9.1 billion in overestimated Medicare Part D bids by playing the current bid pricing game.

  • The 116th Congress began with a Democratic majority in the House. Not surprisingly, Congressional Democrats are targeting drug importation from Canada and Medicare negotiating for prescription drugs, but this time some prominent Republicans are also sharing similar interest in these changes. The White House has indicated a likelihood they might also support drug importation.

  • As newly elected California Gov. Gavin Newsom's first act as governor he signed an executive order to create the nation's largest single purchaser for prescription drugs. About one out of eight people in the United States live in California.

There are other prescription drug policy trial balloons being floated that are mostly aimed at pharmaceutical manufacturers but each of them is only shuffling deck chairs on the Titanic. Government must make different choices in the middlemen they employ to be at the center of high prescription drug costs. For community pharmacy owners, it's important to realize that while the battle for fair product reimbursement is ongoing, there needs to be more to the strategy.

That's what makes CPESN® increasingly relevant in changing the pharmacy payment model.

CPESN is a clinically integrated network made up of local pharmacy networks. Over 2,000 pharmacies have caught on to its vision to diversify the payment strategy so all of their eggs aren't in the product reimbursement basket.

This week NCPA announced the sale of Mirixa to Cardinal Health's OutcomesMTM. We started Mirixa in 2005 with the mission of providing face-to-face MTM services by community pharmacists. Over the past 13 years, Mirixa has paid over $100 million to community pharmacies. However, the ability to unify the OutcomesMTM and Mirixa platforms to enable better workflow for our members in providing patient care services and the changing dynamics of the MTM marketplace led us to this transaction and reinvestment in CPESN. We wish Mirixa great success in continuing to serve community pharmacies.

Changing the pharmacy payment model is going to happen. Maybe not today. Maybe not tomorrow, but the pain caused by its dysfunction to patients and budgets is growing. The pain to community pharmacies has been mounting for years.

The Krebs cycle takes place in mitochondria. They are tiny and take a microscope to see. The pharmacy payment system must be put under a microscope and reengineered to one that is simple, fair, and effective for patients.

Doug Hoey

P.S. Hope to see you at Multiple Locations Conference, Feb. 27-March 2, in Clearwater, Fla. We've got a lot of information to share that will help your business grow right now. Register today!