Independents eye the survival of their segment … while they ponder new business strategies

Drug Store News, Nov 19, 1990 by Harold Cohen

Independents eye the survival of their segment

NASHVILLE - Some 5,000 independent pharmacists attending NARD's 92nd Annual Convention and Trade Exposition held here at the Opryland Hotel, were told by the association's leaders they must not rest on their laurels or stand on the sidelines if independent retail pharmacy is to survive.

Noting that competition is "breathing down [pharmacist's] necks" and "coming at [pharmacists] from all sides," NARD's president, Joseph A. Mosso, P.D., suggested independent pharmacists try a three-pronged approach to their profession: (1) talk to customers and counsel; (2) become more active in local and state pharmacy associations, and (3) get involved and stay involved in community affairs.

NARD's executive vp, Charles M. West, P.D. also urged independents to get involved by making an individual commitment to work together.

Delivering his state-of-the-association address to a filled room, West said, "I firmly believe that our success in preserving independent retail pharmacy practice for generations to come depends on the individual commitment of each and every one of us.

"You cannot stand on the sidelines while others decide the future course of pharmacy practice in this country," he said.

Interrupted several times by applause, West mapped out some of NARD's goals and outlined some its achievements over the past year.

Topping the list of accomplishments was "equal access" legislation that will insure that the Medicaid program obtains drug manufacturers' best prices.

"At long last, pharmacists will stop bearing the burden of cost containment alone," said West. "[Equal access] will correct an injustice that has been allowed to exist since the inception of the Medicaid program more than 20 years ago."

While as of this meeting, equal access legislation had not been finalized, West pledged that if "such action is not forthcoming, you may rest assured that [NARD] will take whatever legislative steps necessary to achieve the goal of equal access."

Freedom of choice

Another subject high on West's list of NARD achievements, was "freedom of choice" legislation that permits third-party prescription customers the right to shop wherever they choose for their medication.

"We have chalked up several successes in putting a stop, once and for all, to the growth of exclusive and otherwise discriminatory contracts in the third-party marketplace," said West.

Pointing out that only 17 states have freedom of choice legislation in place, West admitted that "we still have a long way to go" but vowed to "redouble [NARD's] efforts to legislate these inequities out of existence."

Furthermore, West said that one of the best ways of getting freedom of choice legislation passed was to get the consumer involved. To that end, NARD debuted at the conference a freedom of choice brochure targeted directly to consumers. It is NARD's hope that consumers will push their elected officials to get new legislation passed that will allow them freedom in choosing where they shop for prescription drugs, regardless of who is paying the bills.

Third-party issues

Some of the hottest issues debated throughout the five-day conference centered around third-party prescriptions. The issues included the role of managed health care (see related story), third-party reimbursements, and multi-tier pricing.

West reminded the group that while a structured reimbursement schedule of average wholesale price (AWP) plus a fixed dispensing fee served its purpose during the early days of third-party prescriptions, today's severely discounted AWPs and lower professional fees are no longer adequate for the services performed by pharmacists.

To tumultuous applause, West said, "We must never again attempt to enhance our professionalism at the expense of our economic stability."

Staying on the issue of third party, West pointed out that mail order is continuing to grow "at an alarming rate." Calling mail order "substandard pharmaceutical care" and "unacceptable," West told the audience that NARD recently entered into an agreement with PCS to develop programs that "clearly distinguish the face-to-face counseling and [drug utilization review] capabilities of the nation's independent pharmacists from the mail-order assembly line."

West said he hopes NARD's relationship with PCS will demonstrate "in concrete terms to benefit managers, government and other managed care decision makers, that [independent pharmacists] are the best investment there is in the third-party marketplace."

Citing a suggestion by a PMA official that the Veterans Administration's prescription mail order program be considered a prototype for Medicaid's drug program as "sheer absurdity," West reminded the audience, if it were not for "discriminatory pricing, millions of veterans would not now be relegated to second-class status in our pharmaceutical care system."

West offered an alternative direction on how to handle the VA's prescription needs. He suggested that the VA drug program be converted to an equal access Medicaid model so that veterans could be put back "into the mainstream of pharmaceutical care."