Guest host Brian Nightengale, president of Good Neighbor Pharmacy, is joined by Rich Tremonte and Doug Hoey to discuss the biggest opportunities and headwinds facing independent pharmacies in 2021.
Drug Topics®: Hello, thanks for listening to Over the Counter, the podcast from Drug Topics®. Welcome back to our ThoughtSpot 2020 series in partnership with Good Neighbor Pharmacy (GNP) and AmerisourceBergen (ABC).
In this episode, we're welcoming guest host Brian Nightengale, president of GNP, who will be joined by Rich Tremonte, executive vice president and president of community and specialty pharmacy at AmerisourceBergen, as well as Doug Hoey, chief executive officer of the National Community Pharmacists Association (NCPA).
Brian, Rich, and Doug will be discussing the biggest opportunities and headwinds facing independent pharmacies in 2021. Thanks for listening.
Nightengale: Hello everyone and thank you for tuning in to our ThoughtSpot 2020 podcast in partnership with Drug Topics®. I'm Brian Nightengale, president of GNP, and I'm joined today by Rich Tremonte, executive vice president and president of community and specialty pharmacy at AmerisourceBergen, and Doug Hoey, chief executive officer of NCPA. Thank you both for being here today. Really appreciate you joining.
Hoey: You're welcome, Brian. Pleasure to be here.
Tremonte: Thanks, Brian.
Nightengale: There’s a lot going on for sure. Today, we're going to be discussing the year ahead, 2021, and some of the biggest opportunities and headwinds facing independent pharmacies.
It's hard to believe that 2020 is almost over, but I think we're all probably relieved to be able to say that. We'll talk about how the industry is working to help independents address some of these challenges, and certainly take advantage of opportunities that lie ahead and continue providing accessible care to patients across the country.
So we’re really looking forward to the conversation. Doug, I think I'll start with you. When you think about entering into 2021, what are some of the primary issues or headwinds that that you and the team at NCPA are planning for?
Hoey: Yeah, Brian, well, first of all, thanks to GNP and ABC for the opportunity to talk with you today. But yeah, 2020 has made a huge mess for the world and for pharmacy, so there's going to be a lot of cleanup going on in 2021.
Some of those issues that NCPA has been focused on is changing the pharmacy payment model. And when we say that, we are talking about the prescription reimbursement, but we're talking well beyond that as well. We're talking about the payment system that's confusing, it's complex. And it's very covert for patients as well as for pharmacy.
So we'll be focused on pharmacy DIRs, those continue to ravage independent pharmacies, and close not only independents, but also chain pharmacies, so pharmacy DIRs will be a primary focus.
Reform to Medicaid managed care, because we're seeing that a lot of states are not getting a good deal with their PBMs, and so those dollars could be better spent by the state to barely pay the pharmacy and do other things with those dollars: repair some roads, build some bridges, fight a pandemic. Those are 2 of the headwind issues.
The list could go on Brian, but the third one I'll mention is the administration of the [COVID-19] vaccine. We believe or I believe that some of that will begin in this year, but the widespread administration of the vaccine will largely take place, I believe, in 2021.
And the role of pharmacists in the administration of that vaccine is crucial. We've said many times to the CDC, and to the Health and Health and Human Services (HHS), that if independent pharmacists are not playing a central figure, a central role, in the administration of the vaccine, then the rollout will not be successful. Adversely it will be successful if independents are playing that central role. I'll pause there, Brian. There's plenty to do in 2021.
Nightengale: Yeah, that's for sure. And we'll talk a little bit more about vaccination and COVID-19 in a minute as well, spend a little bit more time on that. But Rich, from your perspective, anything to add?
Tremonte: Thank you, Brian. And through our membership with NCPA and other associations, ABC, we continue to collaborate with the pharmacy community on key legislative issues, so I just wanted to acknowledge that partnership and thank Doug for that collaboration.
Very similar and aligned with many of the things Doug mentioned, as we look into 2021 DIR fees are the top of my list and that was something we see firsthand, Brian, as you know, through our business coaches and through our relationships with our customers. It's a struggle, it's a struggle, because it's unpredictable. And it's very covert.
As Doug said, provider status is something else that Doug mentioned. This is something we fight for every day. But we need to have these pharmacies recognized under Medicare Part B, especially during a pandemic, and all that they're doing. And frankly, they're being looked upon to be the front line and be the number 1 place to go for our entire community, our entire population, so that's something I'm hoping that through this pandemic, we can continue to push.
And then overall, I mean, I think it gets lost on folks, every day, our pharmacies are getting reimbursed underwater for products, and sometimes that could be 2 dollars, and sometimes that could be hundreds or even thousands of dollars. And they're being put in a position where they may have to send a patient away, because the reimbursement is just putting the pharmacy out of business. So that continuity of care for that patient is really being jeopardized through reimbursement. So really looking forward to making strides in all these different areas of reimbursement moving forward.
Nightengale: Yeah, take the DIR situation, for example, and kind of drive that home a little bit. We heard from 1 of our member pharmacies last year, when they got a retroactive DIR fee, and that particular fee for that particular quarter was more than that pharmacy’s entire payroll for a month. That's the kind of impact these things have in terms of not knowing when they're going to hit and not knowing how much they're going to be. And all of a sudden, it's the equivalent of payroll for a month or more. It's real problem that has to be addressed sooner rather than later for sure.
Let's talk about really a very historic argument that's being considered right now in the Supreme Court, that Rutledge v. Pharmaceutical Care Management Association (PCMA) that was heard on October 6. And Doug, I know that NCPA hosted a prehearing and post hearing update, which hopefully is still available on your YouTube site, because it was really insightful.
I have to say that when I listened to it, at first, I was listening to the hearing, and I was a little bit discouraged until the experts got on and said how well it went. I'd love to hear your perspective on that and how you think it went and, what it means for pharmacy.
Hoey: Yeah, the Rutledge v. PCMA case. I mean, when we look back at the history of pharmacy, and this may sound hyperbolic, but when we look back at the history of pharmacy, the Rutledge v. PCMA will be in the annals of the pharmacy history books, hopefully coming out the right way, which the right way from NCPA's perspective, and I think for most of pharmacy’s perspective, just very few exceptions—the magic word that we're all looking for is the word “reversal.”
What the Supreme Court case would do would be to reverse the lower court's rulings that said that states did not have the authority to regulate PBMs. And the Supreme Court case, if it reverses the lower courts, it would allow states the ability to have more oversight of PBMs, which largely they go unregulated right now.
I really picked up on, as far as the hearing itself, it's just hard to gauge. I mean, it was back and forth. There were times when I was really excited about the line of questioning from the justices, and then a few times I thought, “Oh, that's trouble.” I thought that the Nick Bronni, the Solicitor General from the state of Arkansas, did a great job. Also arguing with the state of Arkansas was the United States government. One of the assistant Solicitor Generals of United States, Fred Lewis, also argued in favor of the Arkansas state of Arkansas supposition and I thought he was superb.
Editor’s note: This podcast episode was recorded prior to Associate Justice Amy Coney Barrett’s swearing in to the Supreme Court on October 27, 2020.
But we won't find out how the justices weigh in on this until probably almost certainly next year. They have to rule by June 30, because that's when the session ends. Adding even more complication to it is that there are only 8 justices, at least for the moment, although a ninth one is very likely, very soon, but that ninth justice won't have heard the case, so they'll have to decide, if there's a tie, if they have to rehear the case. That could complicate things.
One way or the other, we'll find out. We'll get an answer. We’ll get some clarity whichever way the justices rule. And 1 of the things we know with that clarity is that the PBMs are arguing that, “Hey, states can't regulate me because I'm a health plan.” Well, if you're a health plan, then you have a fiduciary responsibility to your clients. And PBMs have argued forever that, “Oh, no, no, no, we don't have a fiduciary responsibility.” So 1 way or the other, either as a fiduciary responsibility or more regulation from the state, there's going to be additional clarity from the Supreme Court case. So we're optimistic and like everyone, excited and waiting with bated breath to hear how the justices rule.
Nightengale: Yeah, that's the case for sure. Rich, what are your thoughts?
Tremonte: Yeah, thank you.
Nightengale: Any predictions?
Tremonte: I won't predict the president here, either. But I will tell you, this is something that I think we all agreed that with Doug, this is a landmark case. And at the end of the day, the only thing I can add is as ABC, we really want this to head in the place of transparency. That's what this is all about.
We know that there's bipartisan agreement, that this is something that needs to be addressed. We continue to look at the lack of oversight, having just real repercussions for small business, and this Supreme Court case, we're all hoping and praying will really be able to launch us to where we've been trying to go forever. We've, through various initiatives within our business, Brian, as you know, have tried to push for independent pharmacy to make sure that they're treated fairly, and we do the best we can.
But this is this is something that could transformational and put us in another level. We're all looking forward to this. And it will be interesting, and hopefully it will come before June. But I know we'll stay on top of it.
Hoey: Just to add to what Rich said, you talked about things for 2021. And whichever candidate wins the White House is likely to be a sprint in 2021 and 2022. Because if President Trump wins, he'll be termed out after 4 years, so he has 4 years left. If Vice President Biden wins, a lot of people speculate, because he’ll be 78 years old when he takes the office, if he should win, that he may only be in for 1 term in speculation. But there's a lot of signs that there will be a lot of push those first couple of years for things like drug pricing reform, which affects pharmacy DIR, and which also the Supreme Court case ruling will have a bearing on. 2021 and 2022 are in particularly key years for pharmacy because of all of these different variables lining up.
Nightengale: Yeah, I totally agree. Totally agree. And before we jump fully into 2021, Rich, as you reflect upon this last year 2020, certainly pharmacies have been on the front lines of fighting the pandemic, what are you most proud of? What have you seen with our customer base that really just makes you proud to be able to support them?
Tremonte: Yeah, I think we talked about it a little bit earlier, Brian. We couldn't be proud of our customers or our manufacturers and you think about what we do is connecting our manufacturers to our customers.
A great example is the federal government looking to us to work directly with the care in the community to make sure we get product to where it needs to be. And We Are GNP, I talk about it all the time. But just like there's great resources on NCPAs website, there's great resources on We Are GNP’s website. We talk about Fearless Pharmacy and we have so many great examples, inspiring stories on Fearless Pharmacy that you can go and check out and it ranges everywhere from compounding hand sanitizer, to helping get lunch to people who are out there on the front lines every day.
We really are proud of how agile – so our pharmacists never had a chance to stay home, right? They had to go to that pharmacy every day. And they found ways to service their patients, whether that was sending them through the drive thru or delivering more than they ever had to in the past.
We’ve been able to get closer to our customers, which sounds almost crazy during this time, but we were able to get closer to our customers and maybe not be there physically, but we've communicated with them more than ever. We've had over 10 town halls over the past 6 months. And we've seen how they've worked with their patients, and it's just been amazing.
From the ABC side, all the investment we've made over the years to make sure that our network is resilient, and there's over 800 million dollars invested over the past 10 years. And I always talk about our Olive Branch, Mississippi facility having to be shut down for a week because there was an associate that came down with COVID.
In the past, those pharmacies that were serviced out of that Olive Branch, Mississippi facility would not have gotten product. Because of all the work we've done over the years, we were able to transition those lines to other DCs literally overnight, and that's just 1 of the examples to see how we were able to help and how our manufacturers were able to help get care into the communities and no one does it better than independent pharmacy. And we see that every year with JD Power, and obviously, GNP, just doing a great job servicing those patients and always doing really well in the JD Power scores.
Nightengale: Yeah, thanks, Rich. And Doug, you mentioned earlier about 2021, being the cleanup of the mess that’s been 2020. When you reflect on 2020, what good has come out of it for independent pharmacy?
Hoey: There's a saying that was popularized by Rahm Emanuel, who was the chief of staff for Obama. And he said, “Never let a good crisis go to waste.”
And I feel a little hesitant to use that phrase during a pandemic, because no one wants to take advantage of the negative things that have happened this year, but it has opened doors and as Rich had said, pharmacies have really shown what they can do, how creative they are.
And by the way, the actual person who said that phrase was a guy named Dr. Myron Weiner, who was talking in Medical Economics. He's the 1 who actually coined that phrase, “don't let a crisis go to waste.”
And we've seen the creativity from pharmacies, we've seen the point-of-care testing. We've seen pharmacists being authorized to order and administer tests, and now vaccines, including childhood vaccines. It's an enormous opportunity to accelerate what's already happening in community pharmacy.
And when we talk about changing the pharmacy payment model, as I mentioned, it is about part of it is about getting paid fairly for the product, but another enormous part of it is getting paid for the services that pharmacies provide. And because in March and April and May, a lot of primary care offices, physician offices, were closed because of the pandemic. And once again, pharmacies stepped forward to fill the gap in many situations.
There are, through point-of-care testing, through the vaccine administration, through really just relying on pharmacies and pharmacists to be able to help manage chronic conditions. And I think as a country, we're figuring out that we may have to do health care differently. And so being able to manage those conditions.
And related, and I just want to make sure I mentioned, and Rich touched on this. But a real shout out to GNP and ABC and the whole supply chain, to help pharmacies while we're on the front line. We're on the front line, but I didn't hear any complaints from members, I'm sure they existed, but I didn't hear them as far as not getting orders, or not being supported. Not only during the pandemic, but during the hurricanes and the fires that have taken place this year as well, so pretty amazing job for ABC, GNP, and the whole distribution channel to make sure we have the products we need to be able to serve patients, so shout out there.
Nightengale: Yeah, thanks, Doug. And I think another positive that has come out of this is our ability to educate people on the ability for pharmacists to do more, whether we're talking to the CDC, I know NCPA has been been in direct communication, as have we, around access to vaccines when they're available, and ensuring that independent pharmacies are at the forefront in being able to vaccinate. It is amazing how we've been able to educate policymakers and members of the administration and elsewhere around all that pharmacy can do and hopefully that will stick around and last long.
So I'll stick with you on that theme, Doug, in terms of the future and building upon that momentum. Anything to share in terms of the discussion around being compensated for services and the community pharmacy enhanced services network? There seems to be a lot of momentum there and growth, and what's your outlook there and any updates to share on where this will go and how close can we get to changing that that payment model?
Hoey: Yeah, it's a great question. It's a great point, Brian, that the awareness surrounding people in general about pharmacists, and the role of pharmacists has really been magnified. It wasn't that long ago that you didn't hear pharmacists even on just a commercial. Now you hear commercials for vaccines and it says, “Talk to your pharmacist or doctor.” And that's a fairly recent evolution. CPESN, which is the Community Pharmacy Enhanced Service Network, as you mentioned, it has over 2600 pharmacies and growing and the pandemic has helped payers, employers, realize that they need pharmacists. It's just reemphasized the importance of pharmacists that can help control chronic conditions or help manage chronic conditions.
It's also helped with employers who are looking for testing. And there's several opportunities for testing networks with CPESN. The ability for a payer, an employer, a plan sponsor to sign up a network of pharmacies to provide services is increasingly important. Having that single signature. That's 1 of the challenges, Brian for independents, is that - and we're seeing it with the vaccine, where government can suddenly do have one signature and get 10,000 pharmacies. And that's the easy button for them. So that's a real challenge for independents is how do we make it easy to work with independence? Whether that's CPESN, or Elevate or other networks, how to make it easy to work with independents? That's going to be 1 of the most important things for independents in the future, for our future survival and success, because if we can't make it easy, the chains have a definite competitive advantage.
Nightengale: That's great. And Rich, I know where we're coming up on end of our time here. But when we talk about enablement and clinical services, I know you and I have talked about this a lot, and you've supported our strategy here very strongly. What are your thoughts around how we're supporting independent pharmacies and expanding their ability to provide services?
Tremonte: I think it's a lot of bringing all the strategy into execution and our business coaches every day in the pharmacies, as you know, Brian. Whether it's helping them through the attainment of a CLIA waiver, everything they need to do to make sure that they're taking the right steps to get into areas where they maybe are not comfortable or just haven't had experience in in the past.
And we do that in many different ways. But if we stick to the theme of vaccines, I think it's very important and just timely, as well as many other things that can be done in the pharmacy or a pharmacy in general. We know there's thousands of pharmacies today that are already performing CLIA waived test. And the flu test is obviously the easiest example. I go to a pharmacy to get my flu vaccine every, every year. We know, over the past 3 years, that it's up over 20% through data. So, long and short, people are very custom comfortable and want to go to a pharmacy to get their vaccines.
This is something I think flu has proven; it can be done, and can be done really well and can be done affordably. I'm really, really hopeful that one of the key things coming out of this pandemic, and regardless of who wins the presidency, or what direction we go in, is that pharmacy and independent pharmacy specifically, is the best place right now to go to get care for many, many things. And that's something that we stand behind.
Nightengale: Yeah, thanks, Richard. And I'll just add 1 piece as well. There's a newly launched program that NCPA and the Innovation Center, and CPESN have launched this year, and that's the community pharmacy fellowship. And, Doug, we're certainly honored to be able to sponsor that for the Innovation Center and CPESN. And really looking forward to see what comes out of that. In terms of a 12-month training program to really help practicing pharmacists make that transition to a much more of a clinical services model. And we really do look forward to working with CPESN USA and the NCPA Innovation Center to see how that goes. And I'm really excited about that. If there's anything you want to share on that, but we're excited to see what happens with that.
Hoey: I do I'm super excited by that. I mean I I'll be honest with you, I’d like to say that was my brilliant idea and I thought of that, but that was not true. And actually, my team didn't have to twist my arm, but they had to tell me more about this fellowship program and how it's going to work. And will people really sign up?
As a matter of fact, almost 30 people signed up the first year. That was twice what we expected, and we think that's going to continue to grow. And this fellowship program, like you said, Brian, it's for practicing pharmacists. It's not a residency, which residencies are great, this is not to replace them at all.
But it's for practicing pharmacists who are in the pharmacy. Most of these pharmacists are going to stay in the pharmacy, and the skills that they've learned, the exposure that they have to some of the brightest minds in the industry, they're going to take back to their practice.
I practiced for about 5 years before I came to NCPA. And I think if I could go back in time and a fellowship program like this was available, my mouth would be watering. It would be ideal for someone who wants to be able to accelerate their practice. And so we really appreciate GNP’s support of this. And I've gone from somewhat skeptical to 1 of the biggest cheerleaders for the fellowship program.
Nightengale: Yeah. And you tie that with reimbursement reform. I mean, you only get 1 swing at the bat in this case. Certainly, with changes that may happen with the Supreme Court ruling, the momentum that we're making with payers, our pharmacies need to be ready when there is that ability to provide care and get paid fairly for it.
We need thousands of independent pharmacies ready to go ready to jump in and ready to prove that we are key players in the health care ecosystem and that we are not a cost of the ecosystem. We are a benefit and a driver of savings to health care within the United States because of that high touch, white glove treatment that our independent pharmacies are able to provide. They have the time to care for those patients, they have the commitment, and certainly they have the support of companies large and small and industry partners like NCPA and certainly Good Neighbor Pharmacy.
We covered a lot of ground today. There's certainly a lot more to do and I love the way you mentioned it Doug, 2021 will be the cleanup of the mess that was 2020. And we are excited to continue working on that cleanup with NCPA. And Rich, thank you for your support of independent community pharmacy as well. And hopefully we can continue this conversation, perhaps after the June time frame with the Supreme Court.