Fighting Mandatory Mail Order
Monday, November 7th, 2011
For maintenance medications, the convenience of a mail order service delivering medications right to one’s mailbox may be preferable for some patients. But they should choose to use that service, not be forced into it by some contract their insurer wants.
One of the biggest topics for community pharmacies in recent memory is this trend towards mandatory mail order service. The idea is that patients who are covered under health insurance plans that have a mail order option must use that service for maintenance medication needs. This in effect steers prescriptions away from traditional retail outlets towards mail order services. But is this a good thing? How do retail pharmacies counter this trend? Do consumers care either way?
The pharmacy benefit managers (PBM) industry came up with this concept of mandatory mail order service. The idea is to get people to use lower cost mail order pharmacy services instead of having prescriptions filled at their local drugstores. There were even manufacturer discounts created to help sway the cost equation in favor of mail order over retail outlet pharmacies. It was a push to help control costs for the plan providers. And that is how the idea was sold to the plan providers by the PBMs: cost savings.
But patient preference seemed to take a back seat to money. No one bothered to ask any patients if they wanted to use those mail order services or if they would rather use their local drugstore instead. The issue was decided by the large insurance industry leaving patient choice out of the equation. That is one issue I have with mandatory mail order service: the elimination of a patient’s choice. Sure maybe some patients would still choose mail order service over their local drugstore. But shouldn’t they have that choice?
The whole premise, however, for the “Mail Order Movement”—I’ll call it, for lack of a better term—was the idea that there were verifiable cost savings involved in transitioning plan participants from traditional retail pharmacy outlets toward mail order pharmacies. That premise drove the plan providers to listen to the PBM sales pitches which resulted in this new reality. The carrot being dangled in front of them was the promise of big savings.
My argument to any prescription drug plan provider in the country is this: where are those promised cost savings? Have you really garnered a net savings per patient by forcing them into mail order service for maintenance drugs? And what about all the extra costs involved with mail order prescription services? There are prescriptions that are filled and delivered to patients that aren’t needed. Patients sometimes must also go to their local pharmacy to pick up an emergency supply of medications that were promised but not yet delivered. All those costs can add up.
There are advantages to mail order pharmacy services. I’m not trying to overlook those features. For maintenance medications, the convenience of a mail order service delivering medications right to one’s mailbox may be preferable for some patients. But they should choose to use that service, not be forced into it by some contract their insurer wants.
So how do we fight this mail order pharmacy trend if you are a traditional retail pharmacy? Is the answer legislation like the attempts in New York with the Anti-Mail Order Bill
? At the end of the day, I don’t see legislation as the answer. I just think there will be lots of unintended consequences of an anti-competitive bill being passed to fight mail order pharmacies. That approach doesn’t demonstrate that retail pharmacies are a viable option for plan providers. It just makes our services mandated.
The real secret to killing the mail order threat is simply demonstrating that community pharmacies aren’t more expensive. Showing health insurance providers that they aren’t going to spend any more money per patient will get their attention. These decisions were always about money anyway. So use their metrics to show that retail pharmacy is a viable option for them.
What I mean by this is come up with a detailed study that compares the true costs involved in filling prescriptions in a retail setting verses a mail order pharmacy. Look at factors like medications that are filled and paid for but never used or not needed. Look at mistakes and the embedded costs involved in fixing those mistakes. And look at the real costs involved in filling prescriptions through a mail order pharmacy compared to a local drugstore. Then simply compare the numbers.
I am guessing a true cost comparison would bust the myth that mail order pharmacies are cheaper for plan providers. Any cost savings you might gain from filling mail order prescriptions is offset by other costs involved in using those kinds of services over tradition retail pharmacies. And if that fact can be proven we will kill the mail order pharmacy trend without any anti-competitive legislation or FTC involvement like you are now seeing in New York.
If the plan providers who are paying for coverage can be shown that mail order savings is a myth, you won’t need any law to back them off the mandatory mail order. And if community pharmacies could develop clinical services or other functions that improve outcomes and save money for the system plan providers will actually send patients our way instead of directing them elsewhere. We can do this. And insurance providers will recognize value if you show it to them.
So yes, mandatory mail order prescription service is a threat to community pharmacies of all sizes. But the way to tackle that threat isn’t lobbying for legislation or getting in a battle with the powerful PBM industry over policies. Community pharmacies need to do what we already should be doing: demonstrating our value to the healthcare system. If we can do that and show we can save the healthcare system money we won’t need any legislation to direct patients our way. They will come anyway.
Yes, it is time to mount a fight against mail order pharmacies. But let’s be smart about our efforts and not rely on legislation. If we can show our value and prove we are a less expensive option for providing prescriptions to patients, then the mail order pharmacy threat will disappear on its own. But it’s up to us to make that happen. Are we up to the challenge?