Overcoming the Structural Squeeze Through Policy and Coordination

Pooja Babbrah, MBA, executive vice president of strategy and industry alignment at the National Council for Prescription Drug Programs (NCPDP), and Seth Joseph, managing director of Summit Health, delivered a powerful keynote at the Total Pharmacy^® Solutions Summit. Addressing the theme of "Policy, People, and Profitability," they challenged the industry to move from fragmented clinical efforts to a sustainable, coordinated impact. They argued that the survival of community pharmacy depends not just on operational efficiency but on a structural shift in how pharmacists are valued and compensated.

Joseph opened the session with a stark analogy, comparing the current state of pharmacy to the collapse of Tower Records. Despite being efficiently run, Tower Records failed because its distribution model became irrelevant due to shifting consumer sentiment and emerging technology. Joseph suggested that community pharmacy faces a similar structural problem. Using Walgreens as a case study, he noted that although revenue and prescription volume grew significantly between 2015 and 2024, net profit essentially vanished as gross margins were squeezed from 27% to 17%. "Community pharmacy didn't fail operationally," he stated. "It got squeezed structurally by PBMs [pharmacy benefit managers]."

Despite collapsing dispensing economics, the clinical value of the pharmacist is at an all-time high. Pharmacists see patients 4 times more often than physicians do, and 90% of Americans live within 5 miles of a community pharmacy. With a projected physician shortage of 86,000 by 2036, pharmacists are uniquely positioned as highly trained professionals capable of bridging critical gaps in care. Although the policy environment is shifting—with 180 bills related to pharmacist scope of practice introduced in 2023 alone—the challenge remains of scaling these services.

Key Takeaways From the Discussion

• Research conducted with the NCPDP Foundation identified a standoff, including payers not committing until pharmacies have the volume and pharmacies not justifying the investment without payer commitment.
• Clinical services are not a linear revenue stream. Below 250 services per month, programs are often financially invisible. Once a pharmacy crosses this inflection point, workflows become predictable and economies of scale kick in, making return on investment visible.
• The experts proposed regional alliances led by pharmacies and health plans to standardize reimbursement, streamline credentialing, and establish shared technology infrastructure.
• Babbrah highlighted that NCPDP is moving beyond dispensing standards to focus on clinical data exchange. This allows pharmacists to access patient medical records and share clinical outcomes back to health plans and providers within their existing workflows.

A Road Map for the Future

To break the cycle of fragmentation, Joseph and Babbrah outlined 6 immediate actions for pharmacy leaders, including starting with fee-for-service models as an on-ramp, focusing on 2 or 3 specific services rather than a broad menu, and targeting regional health plans instead of PBMs.

Babbrah also addressed the hurdle of public and provider perception. She noted that although some providers initially questioned why pharmacists were involved in clinical services, NCPDP and its partners are working to educate the marketplace through defined use cases such as chronic care management and care gap closure.

The session concluded with a call to solve the coordination risk. Just as the American Red Cross revolutionized blood transfusions by building the infrastructure for a safe, scalable supply, the pharmacy industry must build a regional framework for clinical care. As Joseph noted, the goal is to solve a coordination problem to make pharmacist-delivered care "safe, routine, and scalable."