Commercial advantage provision to remain in Jeffords-Dodd bill

Drug Store News, July 6, 1998 by Steve Barlas

But Joe Karpinski, the Jeffords spokesman, maintained the senator would not eliminate a provision that prohibits pharmacies from using a customer's personally identifiable information for "commercial advantage."

At the press briefing June 8, John Coster, an executive with the Legislative Strategies Group, which consults for NACDS, said the chances of any bill passing in this session of Congress, which will end in early October, are "very small." The leading legislative contenders are bipartisan bills (S. 1921/H.R. 3900) sponsored by Jeffords and Sen. Christopher Dodd, D-Conn., and Reps. Christopher Shays, R-Conn., and Thomas Barrett, D-Wis.

Coster, a former staffer at NACDS, outlined four provisions in those bills that would be particularly burdensome for pharmacies, either by requiring additional recordkeeping or restricting commercial and professional operating room.

The Health Insurance Portability and Accountability Act of 1996 requires Congress to pass a bill laying out what aspects of a patient's medical record constitute personally identifiable information, and which are therefore entitled to a certain level of protection. A key point of debate is over how and when a patient should give specific consent for his personally identifiable information to be used by third parties, and how it should be used once in third party hands.

Congress has until August 1999 to pass a bill. If it fails to do so, the secretary of Health and Human Services must issue a final rule on the subject by January 2000.

The backdrop to the NACDS media and lobbying outing on June 8 was the erroneous national stories last February about CVS's and Giant's use of a company called Elensys Inc. The stories mistakenly said the pharmacies were giving Elensys customer names for use by pharmaceutical companies interested in marketing products having nothing to do with the consumer's original prescription. The truth was that Elensys was doing nothing more than fullfillment, sending customers notification if they failed to refill prescriptions according to a physician's orders.

Though the Washington Post, which carried the original story, carried a small retraction the following day, a perception took hold among some legislators that pharmacies were playing loose and fast with customer names. Phil Schneider, managing director of public affairs for NACDS, emphasized that the industry is committed to maintaining patient confidentiality. "No outside vendors are used for marketing," he emphasized. "We use them simply as mechanical tools."

The facts aside, the misperception planted by the original Post story was probably the genesis of the provision in the Jeffords-Dodd bill that prohibits pharmacies from using personally identifiable information if it would result in commercial advantage to the pharmacy.

This was one of the "Big Four" provisions that Coster warned against. He said the term "commercial advantage" was not defined in the bill. But, it could ostensibly prevent a pharmacist from checking a patient's personally identifiable information to see whether he, the pharmacist, could substitute a generic drug for a brand name. The fact that the pharmacy would earn more from the generic could constitute a commercial advantage.

Karpinski said Jeffords has no intention of hindering generic substitutions. Jeffords would be open to a technical change in the bill that would make that clear, Karpinski added.

But, Jeffords has no intention of pulling the commercial advantage language. According to one pharmacy industry source, what NACDS really is worried about is impairment of switching programs. These are programs between individual drug manufacturers and PBMs where PBMs have an incentive to, for example, substitute the manufacturer's product for a similar drug from another manufacturer that was prescribed by the physician.

The commercial advantage language could also be read to prohibit pharmacies from automatically enrolling customers in patient compliance programs or, at a minimum, require pharmacies to obtain written customer agreement. Coster argued that requiring an explicit customer "opt-in" would in effect exclude many of the customers who would most likely benefit the most from a compliance program.

Also at the NACDS briefing was Joyce Cramer, project research director at the Yale University School of Medicine. She went over well-trod data on prescription noncompliance and its impact on healthcare costs. She made the case for the importance of pharmacy patient compliance programs, setting the stage or Coster, who argued that the Jeffords/Shays bills would undermine their effectiveness.