NCPA statement on Florida study about prescription drug prices

Nov 6 2008

Health Service Online has published a study called "Variation in Drug Prices at Pharmacies: Are Drug Prices Higher in Poor Areas," by Walid F. Gellad.

In response, Bruce T. Roberts, RPh, National Community Pharmacists Association (NCPA) executive vice president and CEO, issued the following statement.

"The study by Dr. Walid Gellad is helpful in raising awareness about the variation in prescription drug prices between wealthier and poorer neighborhoods in Florida, but unfortunately misses the mark in many ways. For example, more than 90 percent of prescription drug prices are set by large pharmacy benefit managers (PBMs) with no ability for community pharmacies to negotiate, so these small businesses literally can't influence what their patients pay. In addition, underserved and rural communities often have a higher percentage of Medicaid and Medicare patients, making the number of cash prescriptions minimal. On a related note, using 'U&C' (usual and customary) as the data point for measuring cash pricing in the study is antiquated. In reality, U&C was an appropriate indicator decades ago when the majority of prescriptions were paid by cash; however that's now the exception rather than the rule."

"However, the study highlights one very important concern--the lack of access to a community pharmacy in rural and underserved areas. Large drugstore chains sometimes avoid these areas due to profitability concerns, often leaving pharmacy small business owners as the last hope for fulfilling the medications needs in these areas. Unfortunately, take-it-or-leave-it PBM contracts in Florida have resulted in no retail pharmacy presence in 74 ZIP codes where the median income is under $30,000, representing slightly over 185,000 people. This dynamic needs to be remedied."

"The best solution for helping those living in underserved neighborhoods is to allow community pharmacy owners to have good faith business negotiations with Wall Street's giant PBMs as is the case with the companion bills pending in the U.S. Congress - H.R. 971 and S. 2161. Fair contracts would allow more community pharmacies to operate and ensure patients have the medication access they need to stay healthy."
For a more comprehensive analysis of the study by NCPA, please go to the following link: http://www.ncpanet.org/pdf/drugpricesstudy.pdf