Independent drugstores expand and generate strong profits despite worst economy

Pharmaceutical Care Management AssociationOct 26 2010

Amidst the worst economy of the past seventy years, independent drugstores are expanding and generating strong profits, according to a new economic report by the National Community Pharmacists Association (NCPA). The report shows that there are almost 400 more independent drugstores than last year and that profits (3.2%) are three times greater than the rate of U.S. inflation (1.1%).

“As a successful industry, independent drugstores need a new, solution-oriented agenda. It's time for them to stop supporting policies to prevent payers from performing pharmacy audits or expelling fraudulent pharmacies from their networks, and start exploring ways to”

"This will be an eye opener to legislators who've been told that special protections are needed to rescue independent drugstores from dire, economic straits," said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. "As a successful industry, independent drugstores need a new, solution-oriented agenda. It's time for them to stop supporting policies to prevent payers from performing pharmacy audits or expelling fraudulent pharmacies from their networks, and start exploring ways to:

• Reduce pharmacy costs in public programs.
• Resist financial conflicts that keep them from helping consumers access mail-service pharmacy.
• End their 'disclosure double standard campaign' to impose pricing 'transparency' on others while avoiding it themselves."

A new study by the National Health Care Anti-Fraud Association (NHCAA) that identifies policies which hobble anti-fraud efforts offers an implicit indictment of the independent drugstores' political agenda, including policies that:

• Force payers to partner with pharmacies that are banned from federal programs ("Any Willing Pharmacy" policies). Legislation (HR 4199, the "Patient Health and Real Medication Access Cost Savings Act of 2009") that would force plans to include in their networks pharmacies that have been banned from federal programs "runs counter" to preventing fraud, according to NHCAA. This low bar would allow admission for pharmacies "even if they have records of harmful prescription errors or a high number of consumer complaints."
• Undermine payers' ability to audit independent pharmacies suspected of fraud ("Audit Reform" policies). NHCAA supports measures that would "protect the integrity of health care audits by giving auditors more discretion and flexibility to perform their duties." Unfortunately, legislation championed by the independent drugstore lobby (HR 5234, the PBM Audit Reform and Transparency Act of 2010) would instead grant pharmacies (even those with wasteful or abusive practices) an advance notice "heads up" before performing audits.
• Reduce payers' time to verify pharmacy claims before payment ("Prompt Pay" policies). NHCAA states: "if claims are not rushed through the payment process, auditors and investigators will have more opportunities to detect attempts at fraud before they come to fruition." So-called "prompt pay" laws in Medicare Part D that mandate rapid payment to independent pharmacies reduce the time available to detect pharmacy fraud, waste, and abuse.