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.

Opening eyes to the patient impact of pharmacy closures | NCPA Executive Update | April 26, 2019

by NCPA | Apr 26, 2019

Dear Colleague,

Doug Hoey

I often say that a community with a healthy, active community pharmacy makes that community a better place to live. This week, the Journal of the American Medical Association Network Open published a study that seems to confirm my theory.

The JAMA article, Association Between Pharmacy Closures and Adherence to Cardiovascular Medications Among Older US Adults, concluded that “pharmacy closures are associated with persistent, clinically significant declines in adherence to cardiovascular medications” among older adults in the United States. How much of a decline? Nearly 6 percent for patients taking statins and over 5 percent for those taking beta-blockers and anticoagulants. Those stats are for all kinds of pharmacies. The decline in adherence was even more pronounced for patients using independent pharmacies — nearly 8 percent!

According to the CDC Foundation, cardiovascular disease is the No. 1 cause of death in the U.S. and results in health care costs of $1 billion each day. That makes the results of the new study a very big deal. Non-adherence to cardiovascular medications leads to more people dying and higher costs. In the JAMA study, 46.7 percent of the patients were covered by either Medicare (43.4 percent) or Medicaid, so declines in adherence not only have an impact on those patients’ health, but a detrimental impact on taxpayer dollars used to subsidize those programs as well.

Pharmacy closures — especially independent pharmacies — lead to declines in patient adherence to cardiovascular medications. Yet, the current pharmacy payment model is producing results that are the exact opposite.

Many, maybe even most, of the most commonly used cardiovascular medications are now inexpensive. I call some of them “bubble gum drugs” because they cost about the same as a pack of gum. Atorvastatin, lisinopril, metoprolol, and amlodipine are ranked Nos. 2-5 as the most commonly prescribed drugs in the U.S. Just those four drugs represent almost one out of every 10 prescriptions dispensed.

Medication affordability is often the first place people go to try to solve non-adherence, but in the JAMA study 59 percent of the copay amounts were under $5 and 75 percent were under $10. The study cited value-based insurance plan designs with low patient cost sharing increasing adherence by 5 percent to 6 percent and preferred networks increasing adherence by 1 percent to 2 percent. Both of these tactics have been manipulated by PBMs to steer patients into their own retail and mail order pharmacies and to pay pharmacies significantly below their cost to dispense the drug. The results are pharmacy closures — 3,622 between 2011 and 2016. Many assume those closures were limited to independent pharmacies, and 42 percent of them were, however, big-box and grocery store drug stores were also affected. In the last 12 to 18 months, Walgreens closed 750 of the Rite Aid stores it purchased. Fred’s will close 159 stores by next month. Shopko auctioned its 146 pharmacies. Kmarts continue to close. Regional chains in Missouri and Ohio were sold to CVS which then closed most of those locations. Those are just some of the notable recent market exits.

It appears to me that any adherence gains from the value-based pharmacy design tactics mentioned above are wiped out — and then some — if they lead to pharmacy closures. That’s a point that NCPA will certainly be sharing with others.

The JAMA study discussed several suggestions to address the decline in adherence related to pharmacy closures including:

  • Policies that ensure sufficient pharmacy reimbursement for Rx medications.

  • CMS mandating minimum standards for pharmacy reimbursements.

  • Conversion by health plans to an open pharmacy network.

Makes sense to me. In fact, NCPA is lobbying for all three of those policies in Congress, with CMS, and in state capitals.

An environment where sharp business operators can keep their pharmacy open is not only good for communities, but the latest JAMA study provides evidence that the health and economic impact of those closures is a problem that won’t be ignored.

Best,

Doug Hoey