NCPA annual meeting highlights
In his first year as executive v.p. and CEO of the National Community Pharmacists Association, Bruce Roberts threw down the gauntlet facing his association at NCPA's annual meeting in Nashville last month.
"Many of us are over 50. As a matter of fact, 60% of independent owners are over the age of 50," Roberts observed. If independent pharmacyand, by extension, NCPAis to thrive, it must be sustained by new blood, he told the audience. For this reason, NCPA has made ownership "priority one," and has hired a consulting firm to help the association develop a business plan for facilitating ownership opportunities.
Unfortunately, ownership has been "downplayed and even discouraged in pharmacy schools" in the past 20 years, Roberts lamented. NCPA has only 47 student chapters although there are 90 pharmacy schools out there. He urged attendees to push pharmacy school deans to establish NCPA chapters and promote independent pharmacy as a viable career option.
Developing an "exit strategy" for existing independents is another big concern of NCPA's. The association is developing a plan to help independent owners "sell their business to another independent when the time comes and not be forced to sell to a chain," said incoming NCPA president Joe Smith. This is designed to "prevent an attrition of owners," he explained.
Not that independent pharmacy is on its deathbed. To borrow from Mark Twain, who intoned, "The report of my death was an exaggeration," independents are "far from dead," asserted outgoing NCPA president Jim Martin. According to the 2002 NCPA-Pharmacia Digest, final results of which were released at the meeting, the number of independent pharmacists has held steady at around 24,500 over the past three years, Martin said. "We comprise 44% of the retail pharmacy marketplace." The average independent logged nearly $2.5 million in total sales last year, up 8% from the year before.
Besides this bit of good news, Roberts could enumerate some other accomplishments in his first year of office. One has to do with the campaign NCPA waged to "reduce the undue influence of PBMs in independent community pharmacies," which Roberts jumped on when he joined the association. "I was sick of the take-it-or-leave-it contracts, the unfair audit tactics, the hours spent on the phone with the so-called help desk, and the general noise and chaos created in my pharmacy, courtesy of the PBMs," he declared. Thanks to NCPA's efforts, a lot more people now know what PBMs stand for than before, he noted.
The association also developed a model bill, which helped Georgia pharmacists pass an unprecedented law regulating PBMs. "A revised version [of the model bill] is now available, just in time for the 2003 session," Martin said. Going forward, NCPA will support Bob Gude of the Pharmacy Freedom Fund, which is planning to sue PBMs for their unfair business practices, Roberts told the 3,000 attendees gathered at the meeting.
Another major NCPA undertaking is fighting to get R.Ph.s their financial due. Martin disclosed that the association has hired a consulting firm, The Regis Group, to "help guide us in developing a new payment system." NCPA wants the new formula to provide members with not just the product cost but also a fee for dispensing, overhead, professional services, and return on investment. The association is hoping the Pharmacy Payment Formula, or PPF, will replace AWP, which it considers to be doomed. Five other pharmacy groups are supporting this effort, which NCPA is spearheading, Martin said.
In their battle with third parties, pharmacists carry some weight, Roberts claimed, since PBMs need pharmacies to build their networks. He urged pharmacists to carefully review their contracts to decide whether they are right for their pharmacy's bottom line. Pharmacists are responding to this call for action, he noted. For the first time in the Digest's history, the percentage of non-Medicaid third-party business has dropped among independents.
"That tells me you are evaluating those contracts and making the decision to turn down those that are not profitable for your business," Roberts said.
Judy Chi. Independents still a force to be reckoned with, NCPA claims.