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.

Our message is clear - and Azar hears it | NCPA Executive Update | April 5, 2019

by NCPA | Apr 05, 2019

Dear Colleague,

Doug Hoey

Very few people have as much influence over health care policy as the Secretary of Health and Human Services. Secretary Alex Azar, who was nominated in late 2017 by President Trump, has been receptive and accessible to NCPA since taking the job. Next week, our members will have a chance to see him in person at the 51st Annual NCPA Congressional Pharmacy Fly-In in Alexandria, Va.

It's been 11 months since President Trump and Azar released their 50-point plan to lower prescription drug prices. Regular readers know NCPA is heavily invested in the effort to change the pharmacy payment model. That day, Azar had a lot to say about factors contributing to prescription drug prices, but it was his focus on PBMs that particularly caught our attention. Previous administrations have taken the opposite approach when it came to PBMs. In fact, the last time PBMs were talked about in a Rose Garden ceremony was in 2001, when a Medicare prescription drug discount card was announced. During that ceremony, the CEOs of five large national pharmacy benefit management firms – AdvancePCS, Caremark, Express Scripts, Merck-Medco, and WellPoint (remember those companies before they all got acquired?) – came to the White House to announce their participation in President Bush's prescription discount card plan.

Azar's more recent comments about PBMs were quite different:

"We also have a real issue that we've got to look at, which is the role of compensation for pharmacy benefit managers. They're taking it now from both sides. They're getting compensated by their customers, the insurance companies, but they're also getting compensated by the drug companies they're supposed to be negotiating against. They're getting rebates and keeping some of the rebates. They're getting administrative fees.

"Should we move to a fiduciary model, where the pharmacy benefit manager works for the insurance company or the individual, and only is compensated by the insurance company or individual, forbid remuneration from the pharmaceutical company, so that it's all completely on one side there, complete alignment of interest?"

Since they introduced the plan, administration officials have been busy making changes. One of the first things they did was prohibit the outrageous practice of so-called pharmacy gag clauses. NCPA attended the White House bill signing and applauded that action. Next, they proposed a rule that would prohibit retroactive payment reductions, aka pharmacy DIR fees, as pharmacies have known them. NCPA cheered that action as well, and we've encouraged HHS to finalize the proposed rule. We anticipate an announcement soon.

The administration sent shockwaves throughout the industry when it proposed a rule that would result in pharmaceutical manufacturer rebates going to the patient instead of the middlemen. The comment period ends Monday, and NCPA is supporting the measure – provided it is implemented with our recommended minimum requirement that independent pharmacies and patients are held harmless.

Azar has been a frequent visitor to community pharmacies. Last October, he visited Spartan Pharmacy in Pittsburgh, owned by Adam Rice and Kevin McCaffrey. In February, he visited Chateau Drugs and Gifts in Metairie, La., owned by Kerry and Diane Milano. During both visits he spent more than an hour with our members, learning about the vital services community pharmacists provide for patients who otherwise might not have an obliging pharmacy home.

He and his talented team have also been willing to meet with the NCPA Advocacy Center team on multiple occasions. They haven't always agreed with what we have to say, but they have demonstrated a strong interest in listening, learning, and engaging in finding solutions.

We're excited that our members will have a chance to see the secretary next week at the NCPA Fly-In. Access to high-ranking government officials, whose policies affect independent pharmacy, is one of the most valuable benefits of your NCPA membership. Hopefully, you'll be able to join us (online registration is closed, but you can register onsite). Regardless, please know that we'll keep working with the secretary and the department to ensure that community pharmacy is front and center in the health care policy-making process.


Doug Hoey


P.S. We need your participation by April 9 – that's TUESDAY – on a critical cost of dispensing study being conducted by NCPA, NACDS, and NASP. As we focus on changing the pharmacy payment model, the information collected is vital to our efforts to demonstrate to the federal government and other payers the base costs to dispense a medication. The findings are impactful in our support of your state level advocacy activities as well. So, please help us help you – complete the survey today!