Alexandria, Va. March 15, 2013 - The National Community Pharmacists Association (NCPA) today endorsed H.R. 1188, the Preserving Our Hometown Independent Pharmacies Act of 2013, legislation introduced by U.S. Reps. Tom Marino (R-Pa.) and Judy Chu (D-Calif.). The bill would allow independent community pharmacies to collectively negotiate the terms and conditions of insurance contracts they must sign, typically with pharmacy benefit managers (PBMs) that administer prescription drug plans. In response to the bill's introduction, NCPA CEO B. Douglas Hoey, RPh, MBA, issued the following statement:
"This important legislation introduced by Representatives Tom Marino and Judy Chu would help level a distorted playing field upon which billion-dollar PBM corporations often stick independent community pharmacies with one-sided, take-it-or-leave-it contracts. Unfortunately, it is often an offer that can't be refused, as being excluded from a PBM's pharmacy network could spell financial doom for an independent community pharmacy.
"H.R. 1188 makes the contracting process more even-handed by allowing independent community pharmacies to join together to negotiate reasonable contracting terms similar to when large publicly traded chain pharmacies like Walgreens with its 7,000 stores are able to negotiate. It must be noted, however, that even Walgreens went through an extended and contentious contracting fight with a PBM that almost saw their relationship end permanently. If Walgreens, despite its clear leverage, found the contract terms so unpalatable that it would risk being excluded from a large PBM's pharmacy network, just imagine what the owner of one or two independent community pharmacies experiences?
"That's why this bill's passage is so critical. Once this common-sense solution becomes law, independent community pharmacists can focus more attention on what they do best—counseling patients on the safe and proper use of medication to get the most value out of their drug benefit.
"Indeed, additional evidence of the need for this proposal comes from a new report by the Government Accountability Office (GAO) concerning Pharmacy Services Administrative Organizations (PSAOs), which interface between PBMs and pharmacies and provide support services to pharmacies. GAO reports that interviewed PSAOs said 'reimbursement rates to pharmacies have decreased over time' and that 'PSAO's ability to negotiate reimbursement rates has also decreased over time'. In addition, the GAO report found that PSAOs had 'little success' in modifying PBM contract terms through negotiations.
"H.R. 1188 has the effect of allowing patients to enjoy the fruits of greater competition and choice of pharmacy. In fact, patients routinely rate independent community pharmacies higher than their pharmacy counterparts, as was seen in the most recent release of the J.D. Power and Associates 2012 U.S. Pharmacy Study on customer satisfaction.
"Finally, the bill also supports local jobs, tax revenue and small businesses by keeping health care dollars in the local community rather than having them siphoned out-of-state by large corporations."
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