An Oklahoma Win over Mandatory Mail Order Worth Revisiting


By Kevin Schweers

Recently NCPA asked the Pharmacists Society of the State of New York how New York pharmacists prevailed over mandatory mail order during a 2011 legislative fight. Late last year, Oklahoma was also home to a win for patients and local pharmacists over mandated mail. So NCPA asked one of the Sooner State pharmacists involved in the effort how they did it, as many community pharmacists and patients are engaged in similar efforts across the country and could benefit from the lessons learned.

In the latter part of 2011, the Oklahoma State and Education Employees Group Insurance Board (OSEEGIB) was moving forward with plans to require its beneficiaries to use of out-of-state mail order pharmacies for all maintenance medications. Once word spread, Oklahoma patients and pharmacists pushed back.  Ultimately, a new plan proposed by pharmacists was adopted to achieve both greater savings and a level playing field between local independent pharmacies, chains and mail service pharmacies.

Among those leading the charge was Lonny Wilson, DPh, CEO of Pharmacy Providers of Oklahoma (a buying group, switching service, and Third Party Network Administrator) and NCPA’s current President.

“Today’s agreement is a great example of how government can work with the private sector to find ways to save taxpayer dollars, lower the cost of health care, and support our local businesses,” Oklahoma Governor Mary Fallin said in a statement at the time. “I applaud both OSEEGIB and our Oklahoma pharmacists for reaching this agreement and cooperating together on this complex and important issue.”

Mr. Wilson called the plan “a tremendous win for the Plan, the Participants, the State of Oklahoma, and Community Retail Pharmacies,” noting that it lowers total copayments and allows participants to choose the pharmacy of their choice without incurring copayment penalties.

What follows is a Q&A with Lonny Wilson.

NCPA: When it comes to the forced or mandated use of mail order pharmacies, many of the concerns expressed by patients and the community pharmacists who care for them are not new and have, in fact, been voiced for a number of years. What made 2011 different in Oklahoma?

Mr. Wilson: Oklahoma State employees and teachers are the largest employers in many rural communities.  [Under the original OSEEGIB plan,] pharmacies were given the opportunity to participate in a preferred maintenance network, but at rates below acquisition costs.  The average ingredient cost loss was estimated to be $12.93 per prescription.  Only Wal-Mart, CVS and Target accepted the rates.  If a patient obtained maintenance drugs from a non-maintenance preferred provider, the patient would incur a co-pay penalty of 50% of the ingredient cost.

As a result, we identified 89 pharmacies that would be a high risk for closure as a result of loss to de facto mandatory mail.  We estimated it would displace over 250 pharmacists.  The loss of these preceptor sites would also make it difficult for the two schools of pharmacy to comply with experiential requirements.

Our legislature continues to be mostly pro-small business and at a time of economic fragility, we were able to leverage this support from the legislature.   We provided educational materials to over 500 pharmacies to communicate with their legislators and customers.  We provided updated studies on all the pitfalls of mail order with emphasis on heat and moisture sensitivities, documented waste as provided by NCPA’s Dispose My Meds program and the enhanced patient care services provided by the face-to-face contact.

We focused on the continued education of legislators, State Employees and Teachers unions/organizations concerning patient access to care in rural communities and the inconvenience to participants.  We held 10 regional meetings attended by pharmacists, legislators, and plan participants.  We participated in multiple radio and TV interviews and many letters to the editor in most newspapers statewide.

NCPA: One obstacle to ensuring patient choice of pharmacy is the myth of mail order savings. This myth persists in some minds despite what appears to be rampant mail order waste and studies demonstrating how health plan sponsors that incent or require the use of mail order end up paying more for drugs. Did you encounter such misperceptions and, if so, what did you do to alter or overcome them?

Mr. Wilson:  As a result of having archived claims data from our switch company, we were able to analyze Medco’s savings projections.  We prepared two community pharmacy proposals for the state’s insurance board to consider and prepared savings estimates compared to Medco’s Mail Order.

Our proposals were analyzed by the contracted actuarial vendor who confirmed our estimates:

Medco Mail Order:  $15.1 million savings
Community Pharmacy Proposal #1: $32.9 million savings
Community Pharmacy Proposal #2: $25.2 million savings

The actuarial consultant recommended that the board adopt Proposal #1.  This provided additional savings for both 30-day brand and generics, adopted a 90-day at retail rate at additional discounts and eliminated the copayment penalties thus leveling the playing field between independents, chains and mail order.

This has effectively eliminated mail order market penetration and provided the state plan much greater savings—at reimbursement rates that are attainable and profitable for all community pharmacies.

NCPA: The health care benefits of a patient’s face-to-face consultation with a community pharmacist and the preference of most patients for going to a local pharmacy are both well-established. But how did you chronicle and reinforce the economic and tax benefits of buying local when it comes to pharmacies?

Mr. Wilson:  An economic impact study was performed based on actual claims data, anticipated loss of jobs, and loss of tax revenues.  It was estimated to be over $77 million dollars. We utilized the same economists that are used by both the House and the Senate to lend credibility to our report.

NCPA: Like your organizations, NCPA continually stresses to its members the importance of grassroots activism, whether it is at the federal or state levels or with local employers and leaders. Did you find that your memberships became more engaged than usual in 2011 and, if so, what did you do to encourage their further involvement?

Mr. Wilson:  It was truly an amazing time of engagement by community retail pharmacy including both independents and regional chains.  Every legislator was bombarded with calls, emails and the use of social media.  Patients who truly value the services provided by their pharmacy were very engaged as well.  The pharmacy community has continued this momentum and really understands the importance of engagement in the political process.

NCPA: What surprised you the most about your 2011 campaign against mandatory mail order?

Mr. Wilson:  The magnitude of the volatility of the situation and how well the pharmacy and patient community came together to make a difference and the ultimate elimination of mandatory mail order.

NCPA: What were some of your opponents’ most challenging arguments and how did you address them?

Mr. Wilson: They really had no compelling arguments.  It was as weak as, “If it’s not a cost savings, then why do so many big companies have mail order?”

The key here was not just identifying the problems, but also offering a solution.  Data analytics and predictive analysis allowed us to present actuarially confirmed savings.  The proof was in the numbers.

NCPA: Do you have any other words of wisdom that you would like to share with concerned patients or your colleagues in community pharmacy?

Mr. Wilson:  It was a comprehensive approach from several directions—offering solutions, maintaining a professional approach to an emotional situation, and execution.

I cannot underestimate the value of the relationships held by many of our members with their legislators.  They listened and they acted upon good, solid facts.  They created a win for the state, the plan, the enrollees and for community retail pharmacy.

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