For an insightful and succinct look at the issues facing community pharmacy today, check out the interview our friends at Drug Topics recently did with Jon Copeland and Bruce Semingson, two longtime NCPA allies and staunch supporters of independent community pharmacy. Mr. Copeland and Mr. Semingson are, respectively, CEO and COO of American Associated Pharmacies, an influential buying group cooperative.
Here are some highlights; the full article is here. They cover issues such as the need to replace Medicaid’s devastating Average Manufacturer Price (AMP) reimbursement formula with an equitable one; why pharmacy reimbursement should be adjusted to avoid cuts from the Average Wholesale Price (AWP) rollback; and the need for a pharmacy exemption from Medicare’s durable medical equipment accreditation requirements.
More information on what health care reform could mean for community pharmacy can be found in NCPA’s recent letter to Senate Majority Leader Harry Reid (D-NV).
“No one can beat the independent pharmacist at their greatest skill: Taking care of patients,” Semingson said.
“Over the next five years, we will see increased pressure on the margins on a per-script basis,” Semingson said. “With margins coming under increasing pressure, the independent pharmacistindeed, all pharmaciesare going to need new tools [to remain competitive].”
He also cited the impact of technology. “You will have to embrace technology, no matter where you practice.” A third issue over the next five years is government regulation. “The AMP issue alone is huge,” Semingson said. “Another factor is the accreditation and bonding for the sale of durable medical equipment [Medicare Part B]. And of course, there’s the continuing impact of Medicare Part D.”
According to Copeland and Semingson, “Pharmacies cannot afford to take a four percent AWP loss on brand prescriptions due to the rollback of AWPs on Sept. 26.” They offered these solutions to the dilemma: (1) modify the reimbursement terms of the third-party contract (and change the discount from AWP); (2) move to a wholesale acquisition cost (WAC) a percentage reimbursement formula; (3) maintain the WAC AWP spread at pre-Sept. 26 rates. “There are more than 4,500 active branded products in the 18,000 to 20,000 NDC file of brands, multisource brands, generics, and OTCs,” Semingson said.