Pharmacy Evolution

COVID-19 moved the needle on pharmacy reform, but shifting the industry to its ideal model will take more time.

COVID-19 wreaked loss and havoc worldwide, but it forever changed how U.S. legislators and consumers view pharmacists. Following passage of the federal Public Readiness and Emergency Preparedness Act in early 2020, pharmacists became temporary, front- line defenders against COVID-19. 

Last year, pharmacists’ actions under the PREP Act prompted some states to pass laws expanding their authority and addressing key areas, like insurance reimbursement, for services. With the PREP act set to expire in October 2024, the industry hopes other states will follow suit. 

According to the Journal of the American Pharmacy Association, pharmacists (along with interns and assistants in some cases) conducted more than 350 clinical interventions during the pandemic involving more than 150 million individuals. This included testing and administering parenteral antibodies, vaccinations and antiviral therapies. Interventions helped avert an estimated one million plus deaths, eight million hospitalizations and $450 billion in health care costs. The number of lives touched by pharmacists continues to grow. 

In 2022, state legislators introduced 178 bills related to pharmacists’ scope of practice, payment for pharmacist- provided care services and/or designation of pharmacists as providers in 38 states. Several bills addressed public health concerns, including immunizations, contraceptives and HIV PrEP and PEP prescribing authority, indicated the National Alliance of State Pharmacy Associations. As of December 2022, 44 bills in 26 states had been signed into law [see box]. 

The PREP Act (and subsequent amendments), in short, is an emergency measure allowing pharmacists nationwide to perform added functions, including administering COVID-19 tests, vaccines and treatments, while exempting them from liabilities. 

“Pharmacies were life-saving players during the pandemic,” said Hannah Fish, PharmD, director of strategic initiatives, National Community Pharmacists Association. “They’re not call centers or mail order. There’s touch points. Pharmacists can move the needle, impacting patient care. COVID shone a light on healthcare, with legislators looking at some cries we’ve heard for years.” 

But changes have been limited. “There’s pockets of examples, but they’re not nationwide,” added Fish. 

26 States Pass Rx-Related Bills 

  • As of December ‘22, 44 pharmacist-related bills in 26 states had passed their respective legislatures and were signed into law. Below are highlights of laws enacted: 
  • Granted or expanded authority to pharmacists and/or technicians to administer vaccines, other injectables and/ or emergency medications: Alaska, Arizona, Connecticut, Florida, Iowa, Illinois, Indiana, Pennsylvania, Virginia, Wyoming. 
  • Implemented, revised and/or expanded collaborative practice authority: Arizona, Alaska, Connecticut, Idaho, New York, New Hampshire, West Virginia. 
  • Implemented/expanded point-of-care testing and treatment authority: Alaska, Delaware, Kansas, New York. Granted pharmacists contraceptive prescribing authority: Massachusetts, South Carolina. 
  • Expanded scope/further defined pharmacists’ opioid antagonist and OUD authority: California, Delaware, Florida, Missouri. Expanded scope of situations in which pharmacists are designated as providers and are paid for services: Alaska, Illinois, Maryland.

Benefits of expanded access 

NACDS continues to pressure the Biden Administration to extend current pharmacy access so pharmacists in more states can perform additional functions, including diagnosing minor ailments, monitoring chronic health conditions and providing other convenient, cost-effective services. It is urging states to update laws permanently and asking Congress to create “reliable billing pathways” for pharmacies, said Chris Krese, SVP Congressional relations and communications, NACDS. “Patients have long trusted pharmacists,” he added. “This view has only increased among patients and policymakers. Why jeopardize pharmacy access?” 

According to NACDS, 90% of Americans live within five miles of a pharmacy. Pharmacies are open longer than doctors’ offices and appointments do not take weeks to secure. This was crucial during the pandemic. It remains important moving forward, particularly in states allowing expanded scopes of practice. “Pharmacies can do things clinics and physicians can’t,” said Carmen A. Catizone, founding partner, CLM Pharmacy Advisors. “You don’t have to wait three weeks for an appointment. You can walk in and talk to a pharmacist whenever you need to.” 

Rural areas often lack doctors and have much to gain from pharmacists’ expanded practice scope. They were also key beneficiaries of pharmacists’ ability to administer COVID- 19 vaccinations. Many pharmacists traveled to these areas and established mobile vaccination sites. Half of COVID-19 vaccines administered by pharmacists involved these populations, said NACDS. 

The pandemic also drove public collaborations via the Federal Retail Pharmacy Program (FRPP) for COVID-19 Vaccination, which launched in February 2021. The FRPP relies on collaboration between public health agencies to encourage individuals to visit retail pharmacies for vaccinations. It involves 21 pharmacy partners at 41,000 locations nationwide, said the Centers for Disease Control’s website. 

The FRPP spurned additional community initiatives. Fruth Pharmacy now works with the West Virginia Drug Intervention Institute in its home state. A grant provides Fruth with free naloxone and facilitates a children’s anti-drug program involving free coloring books. An online component features talking pill bottles, said Drew Massey, director of pharmacy operations. And, the grant provides at-home opioid destruction kits to help consumers dispose of unused prescriptions. 

“During COVID, we worked with everyone from the governor’s office down to the local health department, including organizations we never worked with before,” added Massey. “It opened new communications.” 

Collaborative practice 

In 2022, Arizona, Alaska, Connecticut, Idaho, New York, New Hampshire and West Virginia passed bills implementing, revising and/or expanding collaborative practice authority. New York and Alaska, along with Delaware and Kansas, also effected and/or broadened point-of-care testing and treatment authority. 

Brigid K. Groves, PharmD, MS and vice president of pharmacy practice at the American Pharmacy Association (APhA), said patients in these states have much to gain. She used the example of HIV PrEP and PEP, where a pharmacist reviews patients’ medical history, starts preventative or post-exposure therapy and refers people to a doctor or nurse practitioner for continued care. She noted that pharmacists can also check blood pressure, review lab results and adjust hypertension medication levels. 

“In some states, pharmacists do this under statewide protocols or collaborative practice agreements, letting patients obtain medication more quickly,” she added. “Some states are more advanced; others have opportunities to grow. We think about ways pharmacists can provide care in addition to dispensing medication. We hope this isn’t far off.” 

Massey said rural residents could benefit from these types of services, namely elderly people and those lacking transportation. “A few miles in West Virginia are literally the difference between a loyal customer who stays on therapy and patients who end up in the hospital in many cases,” he added. “I’m a proponent of pharmacists as providers and the ability to practice using the full scope of our training and education.” Fruth has 29 stores in Ohio, West Virginia and Kentucky. 

Where permitted, Albertsons Companies lets pharmacists prescribe and refill medications directly. “We’re expanding prescriptive services to provide new access points and more efficient and convenient care for customers,” noted Omer Gajial, chief digital officer and EVP health. Albertsons has also immunized customers in rural and inner-city communities. 

Rural communities can also reap gains from telepharmacy, which focuses on medication and chronic disease management, and telehealth, which can involve physicians and a wider range of services. According to healthcare law firm Nixon Gwilt, about half of the states allow telepharmacy. The pharmacy industry hopes to broaden access for both services. 

“During the pandemic, certain regulations were relaxed,” said Matthew Hamory, a partner and managing director, food & drug retail practice, Alix Partners. “Telehealth has become a bigger part of healthcare. It’s cost effective, you can quickly get on a video call, and you’re not surrounded by sick people.” 

Marty Allen, CEO and co-founder of consultancy Real Solutions Group, believes large chains will move further into these areas “if they haven’t already.” He added, “Without COVID, we wouldn’t have advances in telepharmacy.” 

Profitability and reimbursement 

In states where certain services are permitted, profitability and reimbursement can be challenging. With drug margins often slim, pharmacies need the revenue services can provide. In 2022, just four states passed bills addressing reimbursement. 

“Pharmacies often make pennies on every prescription dispensed,” said Mike McBride, VP partner relations, Upsher-Smith Laboratories. “Reimbursement rates are often barely sufficient to cover drugs’ cost. Margins frequently have been squeezed out of reimbursements. While it’s difficult to measure margins on services, whatever they’d [pharmacists] get paid in return would be considered upside margin. Physicians have been reimbursed based on time invested and insurance codes.” 

Groves believes medications and pharmacy services should be separated when it comes to reimbursement. “For years, services haven’t been reimbursed at the same rate or any rate at all,” she added. “It’s important that patient services be separated from the product.” 

Further stressing profits—and driving up costs—are pharmacy benefit managers (PBMs). Three (CVS/Caremark, OptumRx and Express Scripts) control 85% of the market. This near-monopoly allows these “middlemen” to secure large discounts from drug manufacturers. 

“They’re taking from both sides, including employers paying for services,” said Ed McKinley, founding partner, Pharmacy Management Consultants. “They’re always figuring out ways to drive up out-of- pocket costs with copayments and deductibles. Initially, PBMs were intended to drive down costs. There’s much to unpack when it comes to [retail pharmacies] negotiating with them. When you look at some of the vertical relationships like those of CVS Health, they have advantages compared to other retailers.” 

Rona Hauser, SVP policy and pharmacy affairs, NCPA, cited “patient steering” by PBMs whose parent companies own pharmacies. “PBMs add dollars to health care. We continue wanting government to take a hard look at vertical integration and what it’s doing to consumers and providers,” he said. “We’re happy with the work the FTC is doing here. And many members of Congress are interested in tackling it.” 

Also compromising profits are direct and indirect remuneration (DIR) fees. DIRs result from a loophole in Medicare regulations. Often, more than 18 months after a pharmacy fills a Medicare prescription, payers retract money paid to pharmacies. Payers claim they are taking back money due to a pharmacy’s performance on unknown “quality” issues. The federal Centers for Medicare & Medicaid Services said DIR fees increased 107,400% from 2010 and 2020. IQVIA estimates that between December 2017 and December 2020, almost 2,200 pharmacies closed nationwide due to “surprise bills.” 

The Biden Administration’s Centers for Medicare & Medicaid Services (CMS) finalized a new rule in April 2022 titled, Medicare Program; Contract Year 2023 Policy and Technical Changes to the Medicare Advantage and Medicare Prescription Drug Benefit Programs. Provisions affect DIR fees and will take effect in January 2024. 

In a written statement, NACDS president and CEO Steven Anderson said the rule is not comprehensive enough. “Much work remains to be done,” he said. “The 2022 rule did not eliminate pharmacy DIR clawbacks that plan sponsors and PBMs impose on pharmacies, nor did it eliminate sponsors’ and PBMs’ incentives to continue doing so. PBMs have exploited DIR to create a loophole in the Medicare regulation. In the Part D bidding process, sponsors and PBMs may continue to underestimate DIR fees and over-collect.” 

Regardless of the issue, changing the pharmacy model on a large scale is challenging, particularly when it involves discussions with insurance companies, legislators and other influencers. But experts are optimistic. “We’re flipping the pharmacy model on its head,” said Fish. “For years, we’ve relied on product dispensing. Pharmacies will always be tied to medication services. But we’re now looking at the whole model. The ideal future pharmacy will emphasize services as part of the statement rather than everything being tied to product. That’s where the transition is going.” 

Albertsons Gets Sincere About Customer Health

Albertsons Cos. is linking multiple touch points of consumer well-being with Sincerely Health, a digital wellness platform that allows shoppers at 16 of its grocery banners to track and meet goals involving nutrition, food, pharmacy services and mental health. Consumers receive points redeemable toward groceries for achievements. 

First, a customer engages with the platform and answers certain questions, said Omer Gajial, chief digital officer and EVP health. Then, the device produces a health score and the customer enters health goals. Progress is tracked and grocery rewards are provided when earned. Upon joining Sincerely Health, consumers receive up to $25 off an upcoming grocery purchase. 

Shoppers can log vitals and medication regimens for improved visibility and control. Sincerely Health also offers an online pharmacy experience, including tools for managing prescriptions, scheduling vaccines and connecting users with general practitioners through telehealth services. 

Via fintech collaborations, the platform lets customers utilize supplemental Medicare and Medicaid benefits involving fresh food and OTC products purchased. Users can also link activity trackers like Apple Health, Fitbit and Google Fit. Sincerely Health was developed in collaboration with healthcare providers, insurance and technology companies.

“Well-being can mean many things,” said Gajial. “It’s a balance between a healthy mind and body and taking care of ourselves and loved ones. Sincerely Health offers a connected and personalized view across food, nutrition and activities. It lets you and the customer track progress so they can make better, more informed choices. Motivation and rewards are critical to staying on track. Our purpose is to improve lives. If we can improve one million lives through this process, it’s the right thing to do.”