Wait a Minute, Mr. Postman

By Kevin Schweers

The bleak financial outlook for the U.S. Postal Service (USPS) has prompted its leadership to pursue major reforms that could impact practically every segment of pharmacy one way or another.

A projected $238 billion deficit over the next decade led U.S. Postmaster General John E. Potter to announce a 10-year plan March 2nd to deal with rising costs and plummeting mail volume. The proposals, some of which are subject to Congressional approval, include scrapping Saturday delivery and expanding the availability of mail services through pharmacies and other community businesses.

The Washington Post, among many other outlets, covered the announcement: “’We intend to be around for decades and centuries to come,’ Potter told a meeting of regulators, congressional staffers and major mail customers Tuesday. ‘These are the first steps that are necessary to make sure that that occurs.’”

Soon after the announcement The Washington Post and The New York Times editorialized in favor of Congress giving the Postmaster General the flexibility to implement his cost-saving proposals.

NCPA is in dialogue with USPS officials to learn more about their plans. We want to further explore opportunities for community pharmacies to partner with the USPS for the benefit of the public and one another. In rural areas, in particular, this would seem to be an ideal partnership.

A number of local pharmacies already provide mail services. How many is not exactly clear, so we’re in the process of surveying our membership to get a better idea.

The second major pharmacy component to this story is, of course, the impact it may have on mail order pharmacies run by the major pharmacy benefit managers (PBMs).

Eliminating Saturday delivery would leave patients without access to mail order drugs 28% of the week. Even if the shift to 5-day delivery goes through, the USPS still face an enormous deficit.

One has to think that USPS would at least consider asking its largest business customers (mail order, et al) to help make up that loss through higher rates. Or PBMs could move toward private carriers like UPS or FedEx, which charge premiums for Saturday or Sunday delivery.

Either scenario leads to higher costs. PBMs would likely pass that cost on to patients and health plan sponsors. This would further reduce mail order’s “cost appeal.”

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