The Future of Independent Pharmacy


NCPA CEO B. Douglas Hoey, RPh, MBA, discusses the problems and opportunities facing independent pharmacies.

Have the number of independent pharmacies increased or declined over the last few years. If there is a rise or fall, why?

B. Douglas Hoey, RPh, MBA, CEO of NCPAIndependent community pharmacies continue to be an indispensable part of the pharmacy marketplace, especially in underserved communities. However, there has been a relatively small, but steady, dip in the number of independent community pharmacies over the past couple of years.

The trend may be caused by PBMs continuing to shrink reimbursements to pharmacies, especially with DIR Fees and other retroactive post-adjudication fees that continue to proliferate. As a result, NCPA and its members have been more aggressive in our advocacy efforts for PBM transparency legislation at both the federal and state level, particularly a proposed ban on retroactive DIR in Medicare Part D. Most importantly, independent community pharmacies are finding ways to expand the breadth of services they provide patients to open up more revenue streams to remain financially viable.

Is the lack of progress on health-care reform affecting independent pharmacies?

Not really. The Affordable Care Act did increase the pool of insured patients, which is obviously a good thing. But our reimbursements for treating all our patients continues to be a challenge. When it comes to the repeal and replace efforts we have stayed engaged in the process. Some hard fought provisions (e.g., designating the prescription drug benefit as being essential part of coverage, prohibitions against mandatory mail order, etc.) were threatened. We expressed our concerns to the Trump Administration and Congress.

We are also carefully watching what happens with Medicaid under Republican proposals that could shrink the number of beneficiaries gained through expansion and the potential impact of turning the program into block grants to the states. But our primary focus remains on PBM reform, including advocacy addressing DIR Fees, MAC pricing transparency and pharmacy choice in Medicare Part D, along with pharmacists being recognized as providers under Medicare Part B.

How are the job opportunities in independent pharmacy? Are there jobs out there?

There are plenty of job opportunities in independent community pharmacies for a variety of reasons. The aging baby boomer population, where 10,000 people a day reach the age of 65, has an obvious need for prescription drug services under Medicare. Underserved communities continue to rely heavily on independent community pharmacies, who are very accessible and often the only health-care providers in the vicinity.

From an ownership standpoint the marketplace is hungry for more independent community pharmacies, who have the flexibility to better coordinate with other health-care providers to drive better health outcomes and ultimately reduce cost in a way that large chain pharmacies can’t.

In addition, the looming doctor shortage allows these small business health-care providers to help fill the void where appropriate, such as with immunizations. Most importantly, the coming years hopefully will bring an expansion of community pharmacy enhances services networks across the country that maximize their capabilities and employ an equitable and more sustainable reimbursement model.  

Up next: DIR fees


Why do DIR fees continue to be such an important issue for independent pharmacists?

When we surveyed our members about their 2017 priorities, it was the top issue. Nothing indicates any lessening of the PBM industry’s growing use of these unpredictable retroactive pharmacy clawbacks. That is why we are committed to garnering as much support as possible for companion bills S. 413/ H.R. 1038, The Improving Transparency and Accuracy in Medicare Part D Spending Act, which would ban the retroactive nature of these fees so pharmacies and patients would have an accurate picture of what the costs are for prescription drugs at the point of sale. The momentum is on our side.

The proposed legislation would save the federal government $3.4 billion over 10 years according to a study from the Wakely Consulting Group. In addition, a Medicare analysis  has determined that DIR Fees are pushing Medicare beneficiaries into the donut hole and catastrophic phase of coverage faster. PBMs simply can’t justify continuing the status quo with DIR Fees.  

What can independent pharmacies be doing to combat the opioid epidemic?

Independent community pharmacies have been very engaged in combatting this crisis. On the local level there are many examples of them offering the type of education and access to opioid-overdose-reserving drugs like naloxone. On the federal level we are engaged with Congress and the Trump Administration in offering proposals that we believe will make a difference. For example, we recently submitted eight recommendations to the Senate Health, Education, Labor, and Pensions Committee that build on existing efforts by bringing them to the masses by doing things like allowing pharmacists to prescribe naloxone and creating national standards for prescription drug monitoring programs. Given the scope of the problem, pharmacists can anticipate changes, possibly including more electronic prescribing and limits on prescription quantities.

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