Is corporate pharmacy shooting itself in the foot?

November 10, 2015

Maybe retail pharmacy organizations should take a look at their priorities before they find themselves at an evolutionary dead end.

Robert MabeeCorporate bean counters and accidental employees do not understand the profession of pharmacy and the importance of pharmacy services. These non-pharmacists have tried to boost sales by cutting costs and reducing services necessary for patient welfare. Their goal is to sell larger quantities of expensive medications to boost total sales and temporarily increase stock prices.       

The perception that pharmacists are just expensive employees has led to a business model that seeks to minimize the number of pharmacists needed to fill any given volume of prescriptions. This perception fails to recognize the opposing view and goal held by third-party payers regarding delivery of healthcare goods and services.

See also: Pharmacist providers will fill gaps in healthcare, control costs

Count beans or serve health?

For the carrier paying the bills, the more rational and therapeutically correct point of view prioritizes providing the patient with just the right quantity of a drug and services that ensure proper use of the medication.  The very heart of pharmacy services is the basis for restricting “legend medications” to prescription only.

See also: Retail pharmacy returns to primary care

This has been true for more than 100 years, and with the proliferation of therapeutic agents and the mushrooming potential for serious, if not fatal, drug interactions, the need for additional pharmacy services is increasing.

It can be argued that the bean counters will never understand the true nature of the pharmacy profession and its primary obligation to the patient. It is hard to believe that a nonprofessional manager would ever chastise a pharmacist for trying to eliminate unnecessary prescriptions - unless you have worked for one.

The only thing understood by these unlearned and untrained accidental employee-managers, many of whom started their careers as cashiers in drugstores, is that total sales should always increase and the customer should never be discouraged from making any purchase.  The fact that more could be dangerous never enters their minds.

This malfunction in corporate pharmacy has led to the swelling demand for compensated medication therapy management (MTM) services for all patients. MTM services reduce complications and overutilization, and prevent a wide array of unintended consequences resulting from corporate decisions to flood the market with inappropriate, unneeded, and potentially toxic drug combinations.

Opportunity test

Corporate pharmacy operations are not only blind to the problems they are creating but ignorant of the real opportunities for expanding pharmacy services. Some companies that previously offered overnight pharmacy services are reducing or eliminating those services since, according to their business models, simply selling drugs at reduced cost overnight is not profitable.

In many communities, hospitals and emergency clinics rely on the availability of a consulting pharmacist at these overnight stores. The hospitals individually cannot “afford” to staff their own pharmacies overnight.  However, making use of the central availability of the overnight pharmacist at a retail location gives them the resource they need to care for their patients.

The corporate pharmacies have failed to pursue provider status for their pharmacists. Provider status with these various clinics and hospitals would create a basis of reimbursement for MTM services. 

By closing down their overnight services, corporate pharmacies have created a market for consulting pharmacy services. Rural healthcare models have established long-distance medicine models for radiology and lab services. The mechanisms and procedures for providing consulting services electronically are easily adapted for pharmacy services.

 

Do right and do well

Across-the-board MTM, the essential ingredient in providing efficient and preferred healthcare, requires an expansion of pharmacy services.

Chain-drugstore management is generally naive about the real cost of healthcare and persists in seeing pharmacist’s services simply as a way to increase the cost of goods sold. By continuing to ignore the potential revenue stream connected with pharmacist provider services, the bean counters not only reduce their profits; they will eventually cause a reduction in their market share. Many of their corporate store locations, without pharmacy services, are simply overpriced convenience stores without gas pumps, and are likely to do equivalent business.

Constant price-cutting and cost reduction work best for going-out-of-business sales.  It is self-evident that adding revenue streams is a positive and sustainable business model. Providing critical pharmacy services for all patients, something essential to patient welfare, will accomplish this goal. 

Robert L. Mabee is a pharmacist and attorney practicing in Sioux Falls, S.D. He also holds an MBA. Contact him at rlmabee@mabeelaw.com.