By Douglas Hoey, R.Ph., MBA
Everyone’s feeling the pinch of rising health care costs and trying new strategies to grapple with them. To that end, Caterpillar, Inc. (CAT), makers of those familiar yellow bulldozers and other construction equipment, recently began implementing an exclusive deal with Walgreen’s and Wal-Mart to provide prescription drugs to employees, retirees and dependents.
In doing so, plan beneficiaries were cut off from a network of 706 pharmacies dispensing nearly 44 million prescriptions annually in the Land of Lincoln alone (employing 7,000+, by the way). That’s the footprint of independent community pharmacies in Illinois. Many of these independent pharmacies are also full-line health care centers providing durable medical equipment like crutches, canes, lift chairs, and oxygen or compounded medications for specific patient needs.
The CAT arrangement is destined to compromise patient care. One local county has two pharmacies—both independent. The closest “W” is at least 17 miles away. Sub-zero temperatures were expected this week and below freezing temperatures are forecast for the next week. Forcing a patient or their caregiver to make a trek like that through winter conditions is far from good corporate citizenship and, ultimately, hurts employees and retirees.
Thousands of patients protested the changes, signing petitions, calling CAT and calling their U.S. Representative about this misguided approach. In November, as it became clear that the proposed network could not adequately meet patient needs, it was reported that the company began reinstating selected independents for 2010.
Congressman Aaron Schock (R) represents Peoria, Ill., where CAT is headquartered, and he serves on the U.S. House Small Business Committee. He held a meeting late Tuesday with stakeholders to examine the fallout from the Caterpillar deal.
NCPA commends Representative Schock for holding the meeting. I appreciated the opportunity to attend and stand up for independent pharmacies alongside the Illinois Pharmacists Association and Illinois pharmacy owner leaders to meet with Rep Schock and the CAT representatives.
It was important for everyone involved to appreciate several facts.
- Independent pharmacies have considerable reach in Illinois and other areas where the company’s beneficiaries live.
- Separating patients, many of whom have chronic conditions requiring multiple drugs, from the community pharmacists they’ve trusted for years is not just inconvenient; it can negatively affect health outcomes by undermining medication adherence.
- Independent pharmacies are ready and willing to be part of the CAT network and can help hold down health costs.
- Shutting independents out will also likely eliminate good jobs at the worst possible time. In Rep. Schock’s Peoria-based district alone, there are 63 independent community pharmacies, employing 662 Illinoisans, filling nearly 4 million prescriptions per year.
More broadly, the picking and choosing of favorites to the exclusion of other competitors is a slippery slope for CAT and other employers who choose that rocky path. Competition is good. Choosing two companies at the exclusion of the rest of the marketplace could lead to fewer competitors and higher prices for CAT.
This case also calls to mind two often-overlooked aspects of independent community pharmacy.
First, these pharmacies are disproportionately located in areas large, national chains don’t serve. Sometimes they are the only health care provider for miles around.
Second, that independently owned pharmacies are price competitive with large chains. Independent pharmacies provide unmatched service and high-quality care. In addition, a 2008 Consumer Reports study advised consumers to shop around for their prescription drugs. It even found some large chains, including Walgreen’s, to be among the most expensive vendors of the drugs studied.