The Retail Prescription: The Nemesis Within

Daniel Brown, PharmD
Published Online: Thursday, August 21, 2014
Pharmacy’s Greatest Obstacle to Expanded Patient Care Roles
Background Perspective
If one were to randomly query pharmacists about what they consider to be the most significant impediment to the expansion of patient care services and new pharmacist roles, responses would most likely center around a lack of provider status, insufficient numbers of credentialed practitioners, or limited prescriptive authority. Such issues, valid as they might be, pale in comparison to the true culprit.

The real problem is more fundamental, emanating from the most basic elements of pharmacy practice. In fact, it happens to be the cornerstone of the profession. It fueled the tremendous pharmacist job growth and salary escalation of the last 30 years. It is the primary reason that pharmacists are well positioned as the most universally accessible of all health care practitioners. How ironic that a factor which is such an integral part of the profession—the retail prescription—also functions as an internal deleterious force.

The Nature of the Nemesis
The prescription is pharmacy’s direct connection to the population at large. If the patient care services associated with prescriptions were fully optimized, pharmacists could collectively achieve improvements in the health and well-being of countless individuals that would be clinically and economically awe-inspiring. One only need review the findings of the Asheville Project to appreciate what can be accomplished by community pharmacists who provide comprehensive clinical services in concert with prescription processing.1

There should be a baseline of direct patient care associated with EVERY prescription, with appropriate follow-up intervention as warranted. Imagine what pharmacy practice would be like if that were the norm, with medication therapy management (MTM) offered as a routine service for all prescriptions, not just those relating to select drugs or disease states.

Unfortunately, the reality of the typical community pharmacy work environment tells a different story. All the talk about shifting focus from product to patient has been largely just that—talk. Rather than building on the patient care potentials of the retail prescription, current pharmacy trends seem more intent on expediting the process as much as possible by employing strategies that range from automation to centralization.

There is nothing wrong with automating or centralizing the technical aspects of prescription processing, provided that adequate time is allocated to fully address all clinical issues on behalf of the patient. But that is often not the case. Instead, the entire process is streamlined in the interest of speed and efficiency. The result is that many pharmacists trained to be “gourmet clinical chefs” find themselves operating in high-volume, fast-paced dispensing operations, tantamount to flipping medication burgers at McDonald’s Rx. It begs the question, “Why is this happening?”

The Root Cause of the Problem
The root cause of the problem rests with the standard prescription pricing formula, which derives a profit margin predominantly from the product mark-up rather than the fee for professional service. Therein lies the rub. The prescription fee, often a sum as paltry as 2 or 3 dollars, hardly represents fair reimbursement for even the most basic of professional services. Third-party payers have marginalized the retail prescription into little more than a sales transaction by refusing to acknowledge the pharmacist’s professional contributions to the process. How can insurance providers be expected to pay pharmacists for direct patient care in an ambulatory setting when the profession continues to passively accept such nominal reimbursement levels for the bread and butter of community pharmacy practice?

Combatting the Nemesis
A rational approach to redesigning the prescription pricing formula has previously been proposed.2 Prescription reimbursement should include a modest mark-up of 2% to 3% above drug acquisition cost to cover the expense of handling and inventory. The bulk of prescription profit should come from a reasonable fee for professional service, such as $15 for a new prescription and $10 for a refill.

The formula could accommodate adjustments for more in-depth services, increasing the fee to $30 for basic MTM and $50 for advanced MTM. The numbers need to be refined through pharmacoeconomic cost-benefit analysis, but the concept justifiably establishes equitable billing for professional services rendered. It provides fair compensation for every prescription filled and simplifies billing for additional services by incorporating a higher fee into a single electronically-transmitted charge to the pharmacy benefit manager. Under this system, increased prescription costs would be offset by reduced medical expenses, and the increased revenue stream would accommodate the expanded pharmacist staffing required to provide more comprehensive levels of patient care.

An Opportunity for Transformational Change
The standard argument against such a proposal is that third-party payers would never allow it. It can’t be done. On the other hand, what’s the alternative?

Acquiescing to ever-shrinking reimbursement rates has left many community pharmacists increasingly frustrated by the nature of their work. The time has come to speak out as one voice in defense of the profession and join forces in response to a unique opportunity that brings with it the potential to dramatically transform pharmacy practice.

Medicaid is expanding rapidly as a result of the Affordable Care Act. The Centers for Medicare and Medicaid Services (CMS) will face growing pressure from states to reign in ballooning Medicaid costs. If the various factions within pharmacy could collectively promote a fee-based reimbursement structure that supports standard MTM services for all prescriptions, the findings of the Asheville Project suggest that although prescription costs might rise, overall medical costs should fall as a direct result of enhanced medication management. Once the financial benefits are demonstrated to CMS, converting to a fee-based prescription reimbursement system for Medicaid would be a logical step forward. If Medicaid makes such a move, other third parties won’t be far behind.

This strategy might seem a bit far-fetched, but it warrants consideration nonetheless. Despite progressive new visions of pharmacists being paid to provide direct ambulatory patient care, the future of pharmacy remains inextricably linked to the fate of the retail prescription. There is no escaping that reality.

Restructuring prescription reimbursement for Medicaid patients would be a win-win-win proposition—a win for CMS and states struggling to control Medicaid costs, a win for the retail pharmacy industry and pharmacists working in community pharmacy practice, and most of all, a win for patients who would benefit from enhanced care. It would also be nice to see the “nemesis” finally freed from the fiscal constraints that have hampered it for so long.

Daniel Brown, PharmD, is currently the director of faculty development at Palm Beach Atlantic University and professor of pharmacy practice in the Lloyd L. Gregory School of Pharmacy, located in West Palm Beach, Florida. In addition to faculty development functions, he teaches courses in spiritual and professional values, critical thinking, and clinical pharmacokinetics. Dr. Brown has over 30 years of academic and professional experience, much of which has been spent working in hospital pharmacy management. He served as the dean of the Gregory School of Pharmacy from 2005 to 2010 and has been a clinical practice faculty member at 3 other schools of pharmacy, holding such positions as director of drug Information, director of experiential education, director of ambulatory care, and program director for an ASHP-accredited Pharmacy Practice Residency. His primary areas of research include the professionalization of pharmacy students, growth of the pharmacy academy, and clinical pharmacokinetics. Dr. Brown is an active member of AACP, ACCP, ASHP, TBLC, and Rho Chi. He has served on the Board of Directors of the North Carolina Pharmacist Recovery Network and Christian Pharmacists Fellowship International.

  2. Brown D. The Paradox of Pharmacy: A Profession’s House Divided. J Am Pharm Assoc. 2012;52:e139-e143. doi:10.1331/JAPhA.2012.11275.

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