Chain pharmacy sales boom as script count soars

Drug Store News, August 30, 1999 by James Frederick

What's more, say many chain pharmacy leaders, managed are payers are growing more willing to explore new and broader reimbursement policies that take into account a wider array of service capabilities many chains offer to help payers lower health plan and drug utilization costs. Those options could include sophisticated programs to better manage drug formularies and preferred-drug switch programs for payers, as well as comprehensive generics switch programs.

Significantly, most drug chains also are negotiating with one or more of their biggest plan sponsors to provide additional pharmacy care and patient intervention services--and to track the results of those programs to try to measure overall savings in healthcare costs per plan member. Despite the ongoing success of high-profile patient-care pilot projects by pharmacists in Asheville, N.C., Washington state and other areas, however, most plans remain reluctant to embrace the concept--or to establish a payment structure that would reimburse pharmacy retailers for the time, training and enormous costs such programs entail.

That leaves chain pharmacy marketing executives working overtime to convince payers to recognize the value of patient interventions by their pharmacists.

Mike Bettiga, senior vice president of healthcare services for ShopKo Stores, summed up chain pharmacy's frustration. "We all believe [disease management] is the right thing to do, but until we get a means to receive reimbursement, it's hard for us to put forth the dollars to get everybody trained and to develop the patient care centers."

Dennis O'Dell, vice president of health services for Walgreen Co., characterized the quest for a new foundation for pharmacy practice "a period of transition" that won't be easily crossed. "We're doing some pilots, but until there's a clear revenue stream and a value demonstrated to payers and patients--it is a chicken-and-egg dilemma," he said.

Others agree. "Pharmacists are finally breaking through age-old barriers that have limited recognition of and compensation for our caregiving role--yet there is so much more to do," said Ronald Jordan, outgoing president of the American Pharmaceutical Association.

To elevate the role of pharmacists and give them the tools to better manage their patients, drug chains have allied as never before with pharmacy educators, pharmaceutical manufacturers and other groups that can provide the clinical training and patient communication skills needed to advance the notion of pharmacy care. The industry also has spent hundreds of millions of dollars on dispensing automation, phone- and Internet-based refill reorder systems, technician training programs and other workflow improvements to free pharmacists from many of the dispensing and third party adjudication tasks that keep them from interacting with patients.

Given the uncertain outlook for full payment by managed care for value-added pharmacy-care services, the chain drug industry's massive effort to prepare for a broader and more integrated role in the healthcare system might be seen as almost heroic. But retail pharmacy leaders feel they have no choice; the industry has to evolve beyond the mechanics of simple dispensing and participate fully in tomorrow's healthcare system.