Wednesday, October 06, 2010

NCPA's Odd Reaction to the Walmart-Humana Part D Plan

I want to offer some unsolicited—and perhaps unwelcome—advice to the National Community Pharmacist’s Association (NCPA), which represents owners of independent pharmacies.

In Walmart-Humana: An Inevitable Surprise for Pharmacies and PBMs, I explain the economics and strategy behind the Humana Walmart Preferred Rx Plan. However, I neglect to discuss NCPA’s press release reaction: Walmart Medicare Drug Plan a Prescription for Poor Pharmacy Care.

Just my $0.02, but I think NCPA is serving its members poorly with its complaints and threats instead of an upbeat, positive message to consumers, manufacturers, and the media about independent pharmacies. What do you think?


SOUR GRAPES

Here are just a few of the statements that struck me as being particularly off-key in NCPA's press release along with my observations:

  • “…patients are being financially coerced to get their medications at Walmart stores…” (Coerced? Actually, a consumer can willingly pay a premium to receive presumably superior service at 58,000 other pharmacies. And a consumer without access to a local Walmart pharmacy would simply choose a different PDP, right?)
  • “As NCPA reviews the Walmart plan, we intend on reading the fine print. For example, we want to ensure the plan adheres to Medicare's marketing and plan guidelines.” (Is NCPA implying some type of legal action? Or am I misinterpreting this vaguely threatening statement?)
  • “Patients taking a brand name drug or who can't or don't want to take a therapeutic substitute for the drug their doctor prescribed may see little, if any, savings.” (This awkward statement appears to be false based on my review of the plan document.)
SWEET LEMONS

Here’s a more useful remark from NCPA's press release: “…patients continue to give Walmart pharmacies very poor marks.”

True! Walmart once again scored very low in the latest J.D. Power and Associates 2010 National Pharmacy Study.

So, why bother attacking Walmart and Humana for a plan that will save money for some seniors? It comes across as a transparently self-serving effort to support the profits of pharmacy owners.

Instead, why doesn’t NCPA appeal clearly to the segment of Part D consumers who are willing to pay for more personalized customer service at an independent pharmacy? Where is the positive message to the seniors who are able to pay a little more for their prescriptions?

How about sponsoring a campaign to convince seniors with enough disposable income to spend more and get more? Maybe something like "Spend money, Live Better"?

Just sayin'. I'm curious to hear your comments below if you think I've misread the press release.

P.S. Photo above from the always entertaining Mental Floss t-shirt collection.

21 comments:

  1. No Adam, you didn't misread it. Your comments appear to be "right on".

    But it's election season, and everybody seems to be caught up in the spirit of hyperbole and demonizing their opponents.

    It's particularly unattractive, and perhaps even ineffective, when they don't need to.

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  2. Yes, Humana certainly did their homework. Let's pick the worst possible provider for patient care and customer service. Let's send them to Walmart! I am sure the patient was their prime consideration when these two money grubbers negotiated this deal. Tejas

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  3. Adam, I understand your point of view, but it's a bit more complicated (like most things). I can tell you from personal experience at roughly 70% (don't quote me on that!) of the seniors complain about not having enough money to pay for their drugs... including the ones paying with the Gold Amex!! It does not make sense to market to the other 30% or so who still may or may not choose to pay the extra $8, because in their head they're simply going to tell themselves: Why should I pay 5 times as much for the same product??
    Also, I would not want the precedent to be set for CVS or Walgreens to partner up with Blue Cross or Cigna, etc... and come up with similar plans.
    To be fair, NCPA did sponsor a plan when Medicare Pard D first started. It was called Community Care RX but they later sold it to Medco who renamed it CCRX.. still one of the better reimbursing plans out there for us, but getting worse since Medco took over.

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  4. I think you are right on as well. NCPA should be sending a positive message to those seniors who DO want better service and have the money to pay for it. We constantly receive comments on Walmart's service when people come into our INDEPENDENT pharmacy. We often hear 'we wont go anywhere else now'...

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  5. Adam,

    You've missed an important nuance in this matter. As a grizzled old veteran, I know that these things don’t happen in a vacuum. NCPA has every reason to be deeply worried due to the ripple effect of this move by Wal-Mart & Humana.

    I fully expect that other retailers & PBMS will now be compelled to respond, setting off another downward revenue cycle for drug retailers -- and perhaps for PBMs as well.

    Stay tuned!
    Mike

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  6. While I make my entire living from supporting Independent Pharmacy and I proudly support the efforts of the NCPA - I see your point Adam and concur. A positive, creative, and aggressive approach to the news of Wal-Mart and Humana is more productive than being "Per-snick-ity" and negative. I understand NCPA President’s Joseph H. Harmison, PD - statement referring to the Wal-Mart strategy to forgo customer (health) care for the purposes of getting more people into the Wal-Mart stores to buy more stuff.

    I think this is an opportunity for the NCPA to push further ahead with the topic of big-box pharmacy commoditizing the profession and further encourage their members and non-member (any Independent Pharmacy) to get aggressive with marketing, smart-automation, workflow efficiency, and practicing good business accounting / smarter buying.

    We know Wal-Mart is lacking in patient care customer-centric focus and would rather you buy more toilet paper, groceries, and your child’s Halloween costume – than customers show up solely for your prescriptions. It’s the business model of Wal-Mart. BUY MORE STUFF!! Independent Pharmacy provides a much better health-CARE service through thorough medication-care, medication review, counseling, and personalized patient involvement.
    Develop your own strategy Independent Pharmacy Owners and attack Humana-Wal-Mart! Go get new business. Approach local employers and start selling your services! Start community programs that highlight your patient-care differentiators.

    Partner with a PRO-Independent Pharmacy PBM and deliver the SAME MODEL that Wal-Mart / Humana is delivering but on a smaller scale. I’m ready to roll up my sleeves –how about Independent Pharmacy? Am I making it seem too simple? I’m tenacious and ready to work and I believe Independent Pharmacy businesses that engage their communities and fight with different tools at your disposal have a significant opportunity to change the tides of the state of pharmacy – one community at a time.

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  7. NCPA does not speak for all of us independents. I've built my business on knowing my customers and serving them well. This is just political noise.

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  8. I am not actively practicing as a pharmacist right now, but as a consumer, I usually go to the store that offers the best price for the equivalent product. I have enough money to pay more but I still try to be smart with my money. I am sure that I represent a lot of seniors.

    The precedent is another big concern if I owned an independent pharmacy. This idea will spread to Walgreen and CVS if it works with Walmart and this will not be positive for the patients who want better service from the local pharmacist.

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  9. Mr Fein

    What you do not understand is the plight of the independent pharmacy vs the behemoth that is Wal-Mart. Their power over the retail business is unmatched by any other retailer, ever. They truly want to be the only retailer in the world, and will muscle into anyone else's business with their unmatched power and influence.

    Are independent pharmacy owners concerned? You bet they are. How many prescriptions have they lost to the $4.00 program? How many Humana Medicare customers (who have the lowest reimbursement in the business) think they have to go to Wal-Mart because thats where they signed up for the program? How many rebates and allowances does Wal-mart get that are not available for independent pharmacists?

    All independent pharmacists want is a level playing field. But, sadly, as time passes, the field is getting less and less level, and the speed at which that is happening is accelerating.

    Pharmacist in Missouri

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  10. Michael Howard R.Ph.October 06, 2010

    CCRX Is not owned by Medco, Its part of Universal America Medicare Home...I do not agree with NCPA's stance on this matter. You get what you pay for in life. You want cheap insurance, you'll get cheap drug formularies. the only saving grace to this is that if it's a low income medicaid patient, pharmacists will be busy reccomending better Part D plans since they can switch plans every 30 days.

    Adam, I would love your take on the McDonalds low cost insurance story thats in the news this week.

    http://online.wsj.com/article/SB10001424052748703431604575522413101063070.html

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  11. frankly, I think your right Adam, although I prefer to pay $3 more and go to CVS. I'm in and out in 15-20 minutes. Walmart 45-60 minutes at least or "comeback later".

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  12. OK, now is the sky finally falling for independents?

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  13. At a time when most americans are cutting back, what a great opportunity for NCPA (and independent pharmacy in general) to run a multi-tiered marketing campaign about the "cost" of shopping at the big box stores. Walk in Wal-Mart (or Target for that matter) and you'll likely spend 2-3x more than on stuff you don't need than if you walked into an independent pharmacy. Walk in an independent, and there's more dust on the shelves than product. I'm not picking on independents, but it is a fact that most independents have very scarce front ends. What independents lack in front end, they can more than make up in true healthcare services. Frugality plus superior healthcare... now that is an attractive offer for any age group!

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  14. Adam:
    I think you're mistaken. The press release begins with some comments that might be viewed as negative but ends with many positive comments of the type you suggest. With regard to your comment: "a consumer without access to a local Walmart pharmacy would simply choose a different PDP, right?" Wrong. Just look at your earlier comment about the Walmart-Humana PDP: "At a minimum, we could see significant auto-assignment of dual eligible Low income Subsidy (LIS) enrollees to the Walmart-Humana plan.' Not much opportunity for choice there, eh?

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  15. jbib@aol.comOctober 07, 2010

    Dear Mr. Fein: I totally disagree with your premise. I think NCPA's reaction was right on. The only valid reason for differential copays for filling the RX at WalMart is to benefit Walmart. This is blatantly anticompetitive and should not be permitted. PBM's should not favor one retailer over another, including forcing the patient to use mail order, CVS, or WalMart.

    Jim Beatty, RPh
    Bound Brook, NJ USA
    Proud former pharmacy owner

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  16. Is there any link between customer satisfaction (with a pharmacy) and actual health outcomes? If so, I think NCPA has an important case to make with CMS and with the major PBMs.

    If not, I don't know that the payers (i.e. the taxpayers) have much incentive to pay independents extra for the same health outcomes. Sure, it's nice to have friendly service and have a pharmacist who knows your name -- but if that individualized service doesn't keep you out of the hospital at any greater rate than the Mcpharmacist with a smiley face on his coat who doesn't even know how to pronounce your name, I doubt Medicare is willing to pony up the extra $$.

    This sounds like a good research project for a pharmacy grad student. "Customer satisfaction at the pharmacy: how it impacts health care outcomes and costs across the continuum." Has anyone ever looked into this?

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  17. Adam,

    Has anyone looked at the different plans and deductibles? NO. The Humana -Walmart efforts has a $310.00 yearly deductible and cost $14.80 per month. Now the other Humana plans have no deductible and cost roughly $44.00 per month. Someone do the math on the monthly costs. I am still not sure that this is a national offering . Please read where Pennsylvania and West Virginia are the only states this is being rolled out. Or have I missed something?

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  18. Adam,

    I believe you have the right thought process and as such I wanted to see with my eyes what actually is happening in a Walmart in a sernior citizen dominant portion of Florida (Delray Beach). I stayed in the store near the pharmacy department and noticed that they had positioned adjacent to the pharmacy a manned kiosk regarding the Walmart-Humana Medicare Part D partnership. The kiosk also had brochures to hand out to anyone that wanted one. What I observed during this almost one hour timeframe not one senior citizen approached the kiosk and there were MANY seniors waiting to pick up their Rx's or drop them off. The staff at the pick up window were asking patients whether they knew about this plan and while I could not hear the conversations, the body language displayed was ambivalence or no reaction. All of these folks had the opportunity to pass the kiosk before they left the store. I wonder what this could mean?

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  19. $14.80 + $310 annual deductible/12 months = $40.63 effective monthly premium. None of the press releases mention the $310 annual deductible.

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  20. What if independent pharmacy formed an alliance with a pbm and made it cheaper to shop the independent or somehow forced consumers to shop them. Do you think walmart would sue?? You know they would fight it in court. Walmart is constantly pushing the boundaries of legality be it illegal immigrant workers, overworking employees, or other issues. It all gets shined up because we'll sell you something cheap. Walmart is bad for small businesses everywhere and according to most economists small business is the backbone of the American economy. How is Walmart dominating everything good for anybody?

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  21. AnonymousJune 21, 2011

    I am about to turn 65 and researching Part D. The other comments assume that 'scripts have to be filled at Wal-Mart. According to my research at Medicare.gov, I can sign up for the Walmart/Humana plan and use it at either the local CVS or a nearby independent. My medications (which are few and generic) will cost about the same both places. Since I generally spend less than $100 a year on meds, the high deductible isn't a problem for me. I'm going to call the local independent to confirm this before signing up. I almost never go to Walmart and won't get this plan if I have to go there. Thanks for this interesting site.

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