PALM BEACH, Fla. With health reform, rising cost pressures and new technologies upending the nation’s traditional fee-for-service healthcare model, there’s never been a more critical time for community pharmacy to assert its value as a critical front-line resource for patients, the new chairman of the National Association of Chain Drug Stores asserted Tuesday.
Addressing retail pharmacy and supplier industry leaders at the final business session of the NACDS Annual Meeting, CVS/pharmacy president Larry Merlo laid down an immediate challenge. He called on the representatives of every retail pharmacy channel to stake their claim to a rapidly evolving healthcare system in need of new, more cost-effective solutions and closer coordination among patients, payers and healthcare providers.
“We must define the value for community pharmacy in a reformed healthcare delivery system,” he said. “If you want to define the healthcare equation as access, cost and quality, I would offer that our industry, community pharmacy, is in the best position to effectively and positively contribute to all three pillars of that healthcare equation.”
Merlo spoke just after being handed the NACDS chairman’s gavel by outgoing chairman Andy Giancamilli. After noting his own path to a pharmacy career and paying tribute to pioneers and current practitioners who have advanced the profession, he reminded his audience of the close personal link between pharmacists and patients –– and the value that relationship can bring to a new health paradigm.
“As an industry, I believe we are positioned to help control the costs of health care by advocating for the value of what I’m going to call ‘pharmacy care,’” Merlo said. “Our strategy for ensuring the use of cost-effective medications is pretty clear; we need to promote adherence and effectiveness. In both areas, current research would suggest there are tremendous gaps.”
Pharmacy care, Merlo asserted, “is the cost effective treatment of disease, particularly chronic disease through better mechanisms to promote adherence and effectiveness.
“The terminologies have been out there for years: MTM [medication therapy management], disease management. It doesn’t matter what we call it; the time is now to examine the trends in the delivery of health care and the role of community pharmacy, not just today but into the future as well,” said NACDS’ new chairman. “Most important of all, we must ensure that the value of the pharmacy industry and its pharmacists are recognized by payer reimbursement policies: not just for the products we sell, but for the services we provide.”
In a time of rapid change and uncertainty, the need to put a value on those services is more vital than ever, Merlo added. “While the role and value of the pharmacist in a community setting has been a constant, a lot has changed in the pharmacy business over the years,” he noted. “Twenty years ago, cash customers represented 62% of our business vs. 5% today. The percent of prescriptions that are generics have more than doubled; and 20 years ago e-prescribing didn’t exist and today it represents 18% of eligible scripts. And more change is on the way.”
One big change, said Merlo, will be “the Silver Tsunami –– the fact that the over 65 population is expected to grow 65% by 2025. We’ve heard this stat many times: those over 65 average 18 scripts a year –– almost three times that of a 35-year-old.”
Health reform is another huge wave about to be unleashed on the industry, Merlo reminded his audience, and its effects are likely to be both positive and negative for retail pharmacies and other industry stakeholders. Among the positives: “the gradual elimination of the Medicare Part D donut hole for seniors, making prescriptions more affordable, along with 32 million Americans currently uninsured being provided coverage,” said the new NACDS chairman. That will likely add “an additional 91 to 116 million scripts per year” to the pharmacy dispensing rolls, Merlo pointed out.
“That being said, there are certainly challenges ahead –– challenges that we must confront this year,” he added. Among the most immediate: the pricing benchmark used to set the average wholesale price of generic prescriptions sold under Medicaid. “Today, it remains unclear what the new benchmark will be. We must work with all interested and affected parties to ensure we have a new benchmark that provides the correct basis for fair and appropriate reimbursement.”
In addition, said Merlo, “Very few of the new mechanisms in the reform package will tame healthcare inflation, and ideas for controlling costs will be in greater demand as access widens. “I think this is where we come to play. As an industry, I believe we are positioned to help control the costs of healthcare by advocating for the value of…pharmacy care.
“We know chronic disease treatment drives costs in American medicine,” he added. “Our strategy for ensuring the use of cost effective medications is pretty clear: we need to promote adherence and effectiveness.”
Merlo concluded by reminding pharmacy leaders, “There is more that unites us than divides us. That unity is exhibited by the job performed by the 118,000 pharmacists our member companies employ, as well as our collective belief that the value our pharmacists bring to healthcare delivery is unmatched by any other distribution channel.
“There is just no substitute for the face-to-face interaction and relationship that exists between a retail pharmacist and their customers.”