Independent pharmacy leaders released fresh evidence that slow and inadequate reimbursement under the Medicare Part D program have created serious economic problems for the nation?s community pharmacists.
The new statistics?preliminary data from this year's National Community Pharmacists Association (NCPA)-Pfizer Digest?show a "multitude of store closings, stagnation in the average total prescription sales, and plummeting net operating income" for independent pharmacies since the advent of Part D in January 2006.
The Digest results, which reflect "a downturn in several key economic measures for the first time in a decade," suggest that many community pharmacies have been forced to take out large loans to maintain cash flow. "In this negative environment, pharmacy owners have been forced to consider curtailing services or even going out of business," said officials at the NCPA.
During 2006, the first year of the new Medicare drug program, the number of community pharmacies throughout the United States declined from 24,500 to 23,348, a store-count drop of 5% after years of steady growth in the number of community pharmacies. According to the NCPA, "this is a development that hurts patients and reduces competition in the pharmacy marketplace."
The Digest figures also show that, after a decade of steady growth, pharmacy sales flatlined during 2006, while average gross profits declined from 23.6% to 22.8%. "A true warning sign of economic peril is revealed by net operating income being down 30%, from 3.7% to a record low 2.6%," said the NCPA officials. "Between hefty loans to maintain cash flow due to slow reimbursement, and increased pharmacy administrative cost to process Medicare Part D claims, operating expenses increased."
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