Tuesday, June 28, 2011

The Unexpected Losers from New York’s Anti-Mail Bill

New York’s legislature was pretty busy last week. They named corn as the state’s official vegetable and legalized gay marriage. Oh yeah, they also overwhelmingly passed an anti-mail order pharmacy bill.

The Anti-Mandatory Mail Order Pharmacy Bill (New York Assembly Bill 5502‐B) would eliminate mandatory mail-order programs and prevent plans from using differential co-payments for mail pharmacies. As of this morning, the bill has not yet been signed into law by Gov. Cuomo, although I expect it will be soon.

Is this a big win for retail pharmacies and the health care system? Nope, not really. Almost everyone will lose from this legislation:
  • The average consumer will face higher out-of-pocket costs because mail-order discounts will vanish by legislative fiat.
  • Pharmacy Benefit Managers (PBMs) will have another headwind for mail order growth.
  • Benefit plan sponsors will be forced to subsidize an already-saturated retail pharmacy industry, will lose the right to choose how to spend their own benefit funds, and will lose the economic advantages and control of mail pharmacy.
  • Manufacturers of specialty drugs will find their channel strategies undermined by a new any-willing-provider mandate.
  • Retail pharmacies may gain some incremental foot traffic, but will ultimately face more margin pressure as they fight to meet mail pharmacy reimbursement rates. I predict that pharmacy owners’ joy will fade once they realize that they are sacrificing their own profitability to spite PBMs. Be careful what you lobby for!
Read on for my $0.02 and then feel free to post your own comments below.

CONSUMERS

Consumers always lose from anti-competitive, protectionist legislation. The New York bill is no exception. The average consumer will face higher out-of-pocket costs because everyone, regardless of need or preference, will be forced to forgo any economic advantages of mail-order benefit design.

Consumers with third-party insurance only see the out-of-pocket co-payment or coinsurance of their prescriptions, not the price that has been negotiated between the pharmacy and the PBM or the actual cost paid by a pharmacy. The basic reality is that consumers with employer-sponsored insurance save an average of 33% for each maintenance prescription when using a mail pharmacy. (Example: retail vs. mail)

But if you live in New York, you will pay more out of your own pocket, because your mail order discount will vanish.

Imagine that your local bookstore owner lobbied your state Senate to pass a law preventing you from buying a book less expensively via Amazon.com. You would immediately recognize that the bookstore was trying to protect its business at your expense. This is precisely what has happened for prescription drugs in New York.

The only winners are the small subset of consumers who don’t want to pay more for the privilege of picking up a prescription anywhere, regardless of costs. But it’s not like consumers have been clamoring for this choice. As I discuss in Surprising Data on the Mail vs. Retail Choice, more than two-thirds of consumers chose a mail pharmacy over a retail pharmacy when co-payments were equal.

PLAN SPONSORS

Proponents of anti-mail legislation claim that it’s all about “freedom of choice.” Ah, but whose choice should matter?

Today, consumers pay only about one-fifth of retail prescription drugs costs out of their own pocket. See Who Paid for Prescription Drugs in 2009?

The owner of the mail pharmacy (usually a PBM) charges less to an employer or health plan—the third-party payers who foot most of the bill for prescription drugs.
  • In 2010, the discount from Average Wholesale Price (AWP) was 580 basis points lower for brand-name scripts dispensed by a mail pharmacy versus scripts dispensed by a store-based retail pharmacy. (source: PMBI survey of employer-based plans)
  • The Federal Trade Commission (FTC) reached a similar conclusion in 2005, concluding "...prescription drug plan sponsors generally paid lower prices for drugs purchased through PBM-owned mail-order pharmacies than for drugs purchased through mail-order or retail pharmacies not owned by PBMs." (source)
  • I am not aware of peer reviewed studies showing that prescriptions purchased through mail order pharmacies are more expensive for payers than those purchased at retail pharmacies, as some people claim.
If you ask someone else—such as your employer or the American taxpayer—to pay for your drugs, why shouldn't they want you to save them some money? And why can’t they encourage you to use the lower-cost channel for the payer by sharing a portion of these savings in the form of a lower co-payment?

PHARMACY BENEFIT MANAGERS

The New York bill adds another headwind for the mail-order pharmacy businesses of Express Scripts (NASDAQ:ESRX) and Medco Health Solutions (NYSE:MHS). It precludes any out-of-pocket cost difference for consumers between a mail-order vs. a store-based pharmacy with the following language:
"Any policy which provides coverage for prescription drugs shall not impose a co-payment fee or other condition on any insured who elects to purchase drugs from a network participating non-mail order retail pharmacy which is not also imposed on insureds electing to purchase drugs from a designated mail order pharmacy..."
Total mail volume is already growing more slowly than the overall market. See Chains in 2010: Winning. I don’t expect mail prescription volume to pick up speed anytime soon. For more on the factors behind the mail slowdown, see Walgreens Joins the Attack on PBM Mail Profits.

Maintenance Choice is successfully cannibalizing the Caremark mail business, so CVS Caremark (NYSE:CVS) doesn’t need any help from New York legislators.

PHARMACEUTICAL MANUFACTURERS

Manufacturers of specialty drugs will be hurt by the New York legislation because it creates an “any willing provider” requirement that would inadvertently broaden a specialty pharmacy network. Manufacturers that lack a well-designed channel strategy and use sloppy class-of-trade guidelines will discover that their specialty products can be dispensed from a much broader set of pharmacies than they expected. See Who Pays For Specialty Drugs? (And Why It Matters) for the full story.

On the other hand, manufacturers of traditional (non-specialty) brand-name drugs will see only a minimal impact, although there is one small silver lining. Co-pay offset programs (a.k.a., discount cards) are banned from mail-order pharmacies, but still widely accepted at retail pharmacies. If you use these cards as part of your marketing strategy, then the New York bill is not a bad thing. I suspect many plan sponsors will feel otherwise given the controversy over these programs. I’ll have more to say on this topic in a July post.

WILL RETAIL PHARMACIES ACTUALLY BENEFIT?

Before pharmacy owners pop the champagne, consider the fact that you will now have to compete on price with mail-order pharmacies. Let the race to the bottom begin!

The language in the bill gives plan sponsors and PBMs much more wiggle room than you might imagine. Check out the Level Playing Field Requirement of The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (PL-108-173; MMA), which created the Medicare Part D prescription drug benefit.
(D) Level playing field.--Such a sponsor shall permit enrollees to receive benefits (which may include a 90-day supply of drugs or biologicals) through a pharmacy (other than a mail order pharmacy), with any differential in charge paid by such enrollees.
Part D puts the cost burden onto the beneficiary because the consumer must pay any difference in cost between retail and mail order.

The New York bill flips the burden onto the plan sponsor. The consumer can’t be charged a lower co-payment for mail-order as long as the retail pharmacy “offers to accept a price that is comparable to that of the mail order pharmacy.”

"Comparable" is not defined in the bill. Now, ponder the fact that most mail-order drugs are maintenance prescriptions of generic or soon-to-be-generic drugs. Sounds a lot like battling with Walmart for a $4 cash price than a "level playing field." Retail pharmacies now have the freedom to lower their prices to consumers and payers.

Congratulations.

A FINAL THOUGHT

How did The Anti-Mandatory Mail Order Pharmacy Bill pass unanimously in the New York State Assembly? I will remind you of a quote that I cited last summer in A Victory for Pharmacy Profits in South Carolina.
"[T]here may be many advocacy groups that have strong incentives for lobbying the government to implement specific inefficient policies that would benefit them at the expense of the general public ... The costs of such inefficient policy are dispersed over all citizens, and therefore unnoticeable to each individual. On the other hand, the benefits are shared by a small special-interest group with a strong incentive to perpetuate the policy by further lobbying." (source)
Your move, Governor Cuomo.

41 comments:

  1. AnonymousJune 28, 2011

    When you say "Co-pay offset programs (a.k.a., discount cards) are banned from mail-order pharmacies" do you mean banned under the proposed law or in general? Mail-order facilities currently can (and many do) accept co-pay (reduction in co-pay) cards. Re: discount cards (reduction in Rx price), I don't have first-hand knowledge but it seems that any facility capable of adjudicating a claim could accept a discount card.

    ReplyDelete
  2. The New York law says nothing about co-pay cards. I'm referring to the fact that plan sponsors do not like these programs, especially when the cards undermine the formulary structure. When this occurs, the mail-order pharmacy prohibits redemption of a co-pay card, while retail pharmacies are more likely to accept them. Plans are increasing edits to block co-pay cards at retail.

    Adam

    ReplyDelete
  3. AnonymousJune 28, 2011

    You state: "Consumers always lose from anti-competitive, protectionist legislation." Yet, we never are aloud to see what the PBM's charge, how much they collect from administrative fees, and how much they make on the back end from the millions they collect from Drug Rebates. Without any of these facts or numbers, how can you even bring up competitiveness? To compete, we need to know what we are competing against. Show us all the numbers and then we can have an arguement about what costs more.

    ReplyDelete
  4. First mail order companies do not save the beneficiaries 33%. They use repackaging and alternative NDC to charge more for the same product. They substitute brand for generic drugs resulting in higher costs. They also burden the healthcare system by providing poor care resulting in higher costs. They hurt the overall economy by driving small businesses out. The mail order companies are also being subsidized by a failed postal service that is costing the tax payers money. PBM s have become greedy middle men and there day has hopefully come and gone. If Montana can run there own PBM and save 10% why should New York be afraid of the veiled threats of a PBM. Why should the doctors and pharmacist get paid less so a few middle men get to live the life of princes and public officials have boards to retire on. Take a good hard look at what happened with cal Pers in California before you print non sense like this and print it like it is gospel and threaten the Govenor of New York.

    ReplyDelete
  5. AnonymousJune 28, 2011

    Adam. there's an additional benefit to manufacturers. When a mail order pharmacy fills a script, it's usually for 90 days; at retail the norm is 30 days (although this is changing a bit). Thus, at mail order the manufacturer is guaranteed 90 days revenue once the script goes out even if a patients stops taking the drug after 30 days. In that instance in the retail setting, the manufacturer loses 60 days of revenue.

    ReplyDelete
  6. AnonymousJune 28, 2011

    To Anonymous above, if the drug is discontinued the manufacturer may lose, but the consumer wins because they didn't have to pay for those extra 2 months they won't be taking, the emplyoyer & insurance company wins for the same reason, and they environment wins because the drug won't be thrown into the water system or sent to the local dump.
    To Adam, there is also a potential winner here. The makers of the robotic machines should be pushing their products on the retail stores so they can increase their capacity to handle the larger volume of prescriptions they will be filling. This is also a plus because it will create more local jobs to handle the increase in customers who will potentially also buy more front-end products, thereby increasing sales for the stores and further improving the local economy. Let's not concentrate on just the big boys, it's nice to consider the local effect.

    ReplyDelete
  7. I'm a regular reader who often agrees with your persepctives, but I disagree with how broadly the impact to plans and consumers will apply. This legislation will apply to insured plans, certainly those written in New York, but won't it be pre-empted by ERISA & Medicare regulations? Your post reads as if it universally applies to employer plans and supercedes Part D regs. I do agree with the consumer and employer impact to insured plans and your other points make sense to me.

    ReplyDelete
  8. Roy,

    I only mentioned the Part D regs because they are an interesting contrast. I agree that a NY law will not supersede the Federal regs.

    Note that the bill exempts certain employer plans by stating: "...THE PROVISIONS OF THIS SECTION SHALL NOT SUPERSEDE THE TERMS OF A COLLECTIVE BARGAINING AGREEMENT OR APPLY TO A POLICY THAT IS THE RESULT OF A COLLECTIVE BARGAINING AGREEMENT BETWEEN AN EMPLOYER AND A RECOGNIZED OR CERTIFIED EMPLOYEE ORGANIZATION."

    I'm not sure what horse-trading went on behind the scenes for this exception.

    My main point still holds. Many payers will lose the freedom to manage their own benefit costs.

    Adam

    ReplyDelete
  9. Hey Adam,

    I must be missing something here. How can legislation that prohibits compulsory mail order be considered anti-competitive and protectionist? It sounds very pro-consumer, pro-choice and pro-competitive to me. The legislation does not prohibit PBMs from discounting copays to consumers who choose (the PBM's) mail order pharmacy, it merely requires them to extend the same benefit to those who choose a community pharmacy. That would seem to be anti-protectionist. I'm beginning to get that same sense of unreality that I get when I watch Fox News. What am I missing?

    ReplyDelete
  10. Hi Mike,

    Despite the title, the bill goes beyond merely prohibiting compulsory mail order.

    I interpret the following text to mean that there can be no co-pay differential between the mail vs. retail channel, i.e., government-mandated Maintenance Choice.

    "ANY POLICY WHICH PROVIDES COVERAGE FOR PRESCRIPTION DRUGS SHALL NOT IMPOSE A CO-PAYMENT FEE OR OTHER CONDITION ON ANY INSURED WHO ELECTS TO PURCHASE DRUGS FROM A NETWORK PARTICIPATING NON-MAIL ORDER RETAIL PHARMACY WHICH IS NOT ALSO IMPOSED ON INSUREDS ELECTING TO PURCHASE DRUGS FROM A DESIGNATED MAIL ORDER PHARMACY."

    As to whether it is anti-competitive, the legislation is not being demanded by consumers or third-party payers, but instead by the owners of for-profit retail businesses who have long resented mail-order competition. That should make your spidey sense tingle.

    Adam

    ReplyDelete
  11. AnonymousJune 28, 2011

    Legislation not beng demanded by consumers? REALLY? How about you come in and volunteer for an 8 hour shift and see how many "7 day the mail order failed to arrive on time-AGAIN Rx's" we take care of. As noted above,this bill is ANYTHING but anti competitive. I have no doubt that you or your significant other is on some PBM's payroll....your bias is readily apparent. And the race to the bottom is already here--you yourself noted the $4 and $10 Rx program rolled out by corporate chains stores who treat the Pharmacy department as a loss leader. See closed formularies like Humana and Restat's align program that pay literally $2-$3 over the COST of the medication. (The average cost to dispense in this country is ~$10.50 by the way)And why do you continually cite NET profit margins from PBMs (which are tabulated AFTER payroll/overhead has been extracted)VERSUS the average independent whose GROSS PROFIT data you use to vilify the small businessman in comparison? FYI: The average RPh makes $120K a year in salary--shouldn't the owner of that business make AT LEAST what his hughest paid employee does?Fellow gawkers, this emperor has no clothes......

    ReplyDelete
  12. AnonymousJune 28, 2011

    Adam - You are totally wrong about several points. There is not a customer in the world that would choose mail order over their local pharmacy except for the fact that it is either mandatory to go to mail order or the copay is cheaper from mail order. Mail order companies do not reveal how much rebates they get from manufacturers which allow them to offer discounts to the sponsor. In other words these mail order companies are using priveleged information they received by being administrators to steal the business of hard working local independent pharmacies. Nobody likes the service of a large impersonal mail order company. Why dont you tell the truth. You have some sort of vested interest in mail order companies.

    ReplyDelete
  13. Sigh.

    Sorry to disappoint, but I'm not on anyone's payroll in this matter. As I have pointed out many times, my clients are almost exclusively pharmaceutical manufacturers, not PBMs.

    There really is no systemic evidence of an overwhelming preference for retail over mail. ("nobody likes the service...") People have different preferences, shaped in large part by their own personal experiences. This is the point of the data shown in Surprising Data on the Mail vs. Retail Choice.

    NCPA continues to cite a 2003 NACDS survey on retail preference that no one can produce for me. (Yes, I've asked.)

    FWIW, attacking me personally instead of providing countervailing data is known as an ad hominem attack ("an attempt to link the truth of a claim to a negative characteristic or belief of the person advocating it.")

    Adam

    ReplyDelete
  14. AnonymousJune 28, 2011

    Adam- You are not answering th issue at all- Mail order companies use deceptive practices and dont reveal their rebates from manufacturers. What proof do you offer that they can save sponsors money? I have heard examples of PBM's paying a retail pharmacy 5.00 for a generic medicine and then when the same medicine is ordered through their mail order service the sponsor is charged 50.00 dollars. The mail order company will use the AWP minus a percentage gimmick to say that they are cheaper when in fact they charge the sponsor more money. Show me proof that any sponsor that switched to a mail order service for a perios of one year saved money overall for all their members during that year. It never happens- The mail order companies only care about their own profits. What right did the PBM's have when they had inside info from being administrators to use that info to open their own pharmacy and steal the local store's best customers the maintenance customers. That is a pretty low technique not worthy of these so called "ethical mail order companies"

    ReplyDelete
  15. You are missing my point. The legislation (and my commentary) are NOT about any alleged "deceptive practices," "inside info," or your anonymous anecdotes about drug costs.

    The NY bill is about removing the freedom of a third-party payer to design their own pharmacy benefit based on their own private analysis of plan costs. C'mon, does Goldman Sachs (a big NY employer) really need help with financial management from independent pharmacy owners?

    If you don't mind being riled up further, then check out my 2010 commentary Why do pharmacy owners care about PBM transparency?.

    Adam

    ReplyDelete
  16. AnonymousJune 29, 2011

    To Anonymous above, if the drug is discontinued the manufacturer may lose, but the consumer wins because they didn't have to pay for those extra 2 months they won't be taking, the emplyoyer & insurance company wins for the same reason, and they environment wins because the drug won't be thrown into the water system or sent to the local dump.
    To Adam, there is also a potential winner here. The makers of the robotic machines should be pushing their products on the retail stores so they can increase their capacity to handle the larger volume of prescriptions they will be filling. This is also a plus because it will create more local jobs to handle the increase in customers who will potentially also buy more front-end products, thereby increasing sales for the stores and further improving the local economy. Let's not concentrate on just the big boys, it's nice to consider the local effect.

    ReplyDelete
  17. First mail order companies do not save the beneficiaries 33%. They use repackaging and alternative NDC to charge more for the same product. They substitute brand for generic drugs resulting in higher costs. They also burden the healthcare system by providing poor care resulting in higher costs. They hurt the overall economy by driving small businesses out. The mail order companies are also being subsidized by a failed postal service that is costing the tax payers money. PBM s have become greedy middle men and there day has hopefully come and gone. If Montana can run there own PBM and save 10% why should New York be afraid of the veiled threats of a PBM. Why should the doctors and pharmacist get paid less so a few middle men get to live the life of princes and public officials have boards to retire on. Take a good hard look at what happened with cal Pers in California before you print non sense like this and print it like it is gospel and threaten the Govenor of New York.

    ReplyDelete
  18. AnonymousJune 29, 2011

    You state: "Consumers always lose from anti-competitive, protectionist legislation." Yet, we never are aloud to see what the PBM's charge, how much they collect from administrative fees, and how much they make on the back end from the millions they collect from Drug Rebates. Without any of these facts or numbers, how can you even bring up competitiveness? To compete, we need to know what we are competing against. Show us all the numbers and then we can have an arguement about what costs more.

    ReplyDelete
  19. The New York law says nothing about co-pay cards. I'm referring to the
    fact that plan sponsors do not like these programs, especially when the
    cards undermine the formulary structure. When this occurs, the
    mail-order pharmacy prohibits redemption of a co-pay card, while retail
    pharmacies are more likely to accept them. Plans are increasing edits to
    block co-pay cards at retail.

    Adam

    ReplyDelete
  20. Roy,

    I only mentioned the Part D regs because they are an
    interesting contrast. I agree that a NY law will not supersede the
    Federal regs.

    Note that the bill exempts certain employer plans
    by stating: "...THE PROVISIONS OF THIS SECTION SHALL NOT SUPERSEDE THE
    TERMS OF A COLLECTIVE BARGAINING AGREEMENT OR APPLY TO A POLICY THAT IS
    THE RESULT OF A COLLECTIVE BARGAINING AGREEMENT BETWEEN AN EMPLOYER
    AND A RECOGNIZED OR CERTIFIED EMPLOYEE ORGANIZATION."

    I'm not sure what horse-trading went on behind the scenes for this exception.

    My main point still holds. Many payers will lose the freedom to manage their own benefit costs.

    Adam

    ReplyDelete
  21. I agree with Adam here.  I'm researching this topic, and it's clear that mail order pharmacies (almost always owned by PBMs) don't accept copay cards.  There are ways around this (retrospective payment to the consumer), but this is happening as practice not law.  One manufacturer that I talked with said they were actually pushing for more 90-day retail than mail because of this...maybe that plays in here.

    ReplyDelete
  22. The person paying the majority of the costs here (employers, managed care, union, government) has access to much of this - admin fees, rebates.  You can back into some of it in annual reports.  I understand this from a pharmacy perspective, but do you care from a consumer perspective?  Don't you just want your drugs at the lowest out-of-pocket cost?

    ReplyDelete
  23. Also, numerous studies have shown a higher MPR (medication possession ratio) with 90-day (mail and retail) so they get more revenue but better adherence (even net of waste).

    ReplyDelete
  24. Consumers do choose mail over and over again.  I have worked for a large PBM and with many PBMs.  It's not for everyone, but many people like the convenience, the cost savings, the privacy, the lack of waiting in line, etc. 

    ReplyDelete
  25. AnonymousJune 29, 2011

    test comments

    ReplyDelete
  26. AnonymousJune 29, 2011

    test massage

    ReplyDelete
  27. JIm Fields RPhJune 29, 2011

    These co-pay cards do not undermine the formulary system, the drugs are obviously on the formulary, however, these cards do undermine the PBM rebate system. The rebate is going directly to the patient not the PBM. If the PBM feels that the drug should not be on the formulary because of cost or clinical reasons then just take it off. This would all but eliminate the co-pay discount cards.
    Secondly:
    Statements  that mandatory mail order programs are always the best financial decisions for payer in all cases is simply not the case and is proven with over 100 employer prescription analysis done by my company. I am more than willing to provide our data to you to show you how and why this is done.
    As a small PBM competing against the big boys for business we have actually changed our business model to look for accounts that are using Mail Order from the Big 4 PBMs. We have done this because we learned that is where the low hanging fruit is and the easiest accounts to pick off and move to our PBM. They are the easiest because of high Rx distribution prices charged by these Big 4 mail order facilities.
    I know you will never believe these mail order facts, no one does until after the analysis, but if one truly believes in fiduciary responsibility, one can send us any account using mail order and we will do a bottom line analysis. We will do this total analysis, contract language included, at no charge to anyone. An analysis of a real world account is the only way to prove of what is the least expensive route of Rx distribution for a payer, not words.

    ReplyDelete
  28. Jim,

    Good point regarding co-pay cards. However, I'm thinking about a situation where a co-pay card is used to reduce the patient's out-of-pocket for a tier-3 (non-preferred brand) drug down to tier-1 (generic). The patient will not see a difference, but the plan will. Closing the formulary to the brand product is a theoretical option but not always desirable.

    Regarding your mail program analysis...As you know, I only write about news and reports that are in the public domain. The burden is on you (not me) to publish a white paper or a peer-reviewed article so everyone can evaluate your claims.

    A

    ReplyDelete
  29. JoeschmoeJune 29, 2011

    Some consumers do prefer mail service. Sometimes it's because of what they perceive  as convenience, other times they are financially motivated by lower copayments to utilize mail service.But their should be CHOICE. Currently, some FORCED into it MAIL SERVICE for maintenance medications (like ESI does to some if it's groups) . that is the true issue. LEVEL the Playing field.

    ReplyDelete
  30. JoeschmoeJune 29, 2011

    Some consumers do prefer mail service. Sometimes it's because of what they perceive  as convenience, other times they are financially motivated by lower copayments to utilize mail service.But their should be CHOICE. Currently, some FORCED into it MAIL SERVICE for maintenance medications (like ESI does to some if it's groups) . that is the true issue. LEVEL the Playing field.

    ReplyDelete
  31. JoeschmoeJune 29, 2011

    Some consumers do prefer mail service. Sometimes it's because of what they perceive  as convenience, other times they are financially motivated by lower copayments to utilize mail service.But their should be CHOICE. Currently, some FORCED into it MAIL SERVICE for maintenance medications (like ESI does to some if it's groups) . that is the true issue. LEVEL the Playing field.

    ReplyDelete
  32. AnonymousJune 30, 2011

    you joking? it's a free world here. 

    why does it matter who's paying the bill IF the net out of pocket for the payer is neutral?

    ReplyDelete
  33. Dan,

    Thanks for contributing to the discussion. I'm not going to respond to your unsubstantiated assertions because it's not my place to defend PBMs.

    But note my real point: Mail order has a place in prescription dispensing and that payers have a right to use mail based on their own best judgment, free of government influence.

    I will ask you consider the questions that I pose in
    Why do pharmacy owners care about PBM transparency?

    How is it that PBMs can get away with their alleged "gaming"? Do you really believe that the executives at insurance
    companies and for-profit businesses are gullible simpletons? Do these
    executives not care about money and willingly get ripped off by their
    pharmacy benefit vendors?

    This is a direct implication of your perspective. If the market for PBM services were really so dysfunctional, then we would never see contracts move from one vendor to another. But it happens all the time. A recent example:Interpreting Caremark’s Big Win over Medco.

    It seems like your real beef is with third-party payers, not PBMs. I encourage you to take the fight to them.

    Adam

    ReplyDelete
  34. How is being denied any choice for our provider a good thing?
    Please tell me how some bulk drug provider in China going to let me know when and how to take my meds when I have a concern. 
    Please stop with your profit over all mentality.
    No I'm not a druggist.

    ReplyDelete
  35. Consumer.
    As a consumer,  for my prescription plan, I pay the same copay if I go the mail order route or retail route.  But what I DO NOT like about my plan is the mandatory requirement of mail order for "maintenance" medications, that after 2 or 3 fills at my local pharmacy I must use mail order.  My plan even labels ibuprofen as maintenance medications, so after 2-3 prescriptions it gets labeled as a maintenance medication and I must use mail order after that. So my 4th visit to a dentist to do any dental work would require me to wait 10 days for my pain medication to arrive in the mail - have you ever seen a dentist write for a 90 days supply of ibuprofen?  I hope this law allow me the CHOICE of going RETAIL or MAIL order, so I can decide if I would like to go to the local independent pharmacy, the local chain pharmacy, the local walmart/target big box pharmacy, or mail away (and by the way it's usually the PBM's own mail order outfit - I don't have a choice of using my express scripts PBM insurance card at the medco's or caremark's mail order house).  This does bring choice and compitition, it's doing away the forced "manditory" mail order requirement.  I can still use mail order if I like. And you did said more than 2/3 of consumers will choose a mail order pharmacy over a retail pharmacy if copay were equal.  That is if there is a choice, what if there is no choice like my plan.
     
    Savings.
    You already said 2/3 will choose mail order over retail, why does the plan sponsor need to encourage more to use it then?  If you use a network mail order or retail or chain channel the copays should be the same.  And usually the copay savings incentives are for maintenance 90 days supply.  Examples are 2 months copay instead of 3 for the 3 months supply.  Some retail pharmacy have signed contracts with the pbm to allow for a 3 month fill (same amount of meds to dispence as the mail order house and at the same copay) and the retail pharmacy does take a hit on reimburstment. Plans can encourage 3 months fills of maintainence meds with different copays like the example above but should be the same at the retail or mail order, just shouldn't stear the patients to one outlet by making mail order a requirement if the retail house is willing to accept the lower reimburstment already associated with 3 months maintenance supply of medication.  Some retail (especially independents) have not signed contracts with pbm to dispence a 3 month supply because of the lower reimburstment.  Most chains have and are willing to take lower profits (because thay already have larger buying power to get lower cost drugs from the wholsaler or get rebates from manufacturers).  PBM are already saving by encourageing patients to utilizing their "network" pharmacies that have signed contracts with them to offer the lower cost and to encourage maintenace fills.  They shouldn't force the issue of utilizing one channel over the other by in essence giving money to patients to use their OWN mail order house.  For example some caremark plans require/force you to mail away to caremark or goto CVS to get your 90 days maintenance meds, if Walgreen was willing to accept the reimbustment then why not allow it to do the retail and mail order component of that plan's requirmenet.  You don't see that happening between these chain/pbm combos.
     
    My analogy is flawed, but building on your analogy with amazon.  It more like this trilogy book has exclusive digital publishing rights on the Amazon Kindle, you can only get the digital format on kindle, you can save by buying all 3 book.  You also can purchase book 1 on hardcover at your local book store if you like, but afterwards books 2 and 3 will not be published that way due to the savings in distrubiting it digitally and greener for the earth. 
     
    Disclosure I am a retail pharmacist working in both chain and independent pharmacy and my workplace prescription plan requires me to utilize mail order afterwards. 

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  36. I really don't think that pharmacies are going to have a problem competing with mail order pharmacies.  You forget that the reason patients don't want mail order is not because of the price...its because you can't talk to a pharmacist one on one and face to face, and your meds get left out in your mail box for hours during the hot day and other weather.  Mail order pharmacy is some of the most impersonal healthcare experience, and thats not what patients want.  Pharmacists are not just pill pushers, they didn't get PharmDs to fill meds, there is an intellectual knowledge that patients have access to that is not as accessible in the mail order business.  As of right now, mail order pharmacies have bypassed ALMOST ALL federal regulation that retail pharmacies are subject to, which has enabled them to change and degrade the practice.  This can't be allowed anymore and pharmacists are willing to fight for their profession and the health of their patients.

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  37. Do you work for the insurance companies? Because they are the only ones that benefit from mandatory mail order. Everyone else loses. People should be able to choose where they get there medications, and have the option of face-to-face contact with their pharmacist. Mandatory mail order was created so insurance companies could make more money, and once they have eliminated all independent pharmacies, to control the market. When have they ever been looking out for the consumer or anyone else?? I mean, come on.

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  38. You are WrongSeptember 26, 2011

    You are completely wrong.  If you think anything that gives a pharmacy benefit manager (who are also the mail order companies) an edge is fair and better for the consumer, you are mistaken in the foundation of your argument.

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  39. Actually, I'm against a bill that is anti-consumer by favoring retail pharmacies. See FTC Slams NY Anti-Mail Bill or the New York Times editorial Mom-and-Pop Pharmacy Bill.

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  40. Adam, I hope one day you find youself in need of your local pharmacist.  I also hope he reads your highly slanted articles that are somehow propagated as factual.  As a community pharmacy owner, I take great pride in serving my patients, and am greatly angered when their employers go to mandatory mail order for their prescriptions. 

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  41. How is this bill anti-consumer if they still have a CHOICE of where to fill their prescriptions? Pharamacies have already stated publicly that they would fill the prescriptions for the exact SAME terms and conditions as the out of state PBM-Owned mail order facility. The bill is sitting on the Governors' desk. If it becomes law, it is a monumental win for consumers and the State of New York. You can bet your bottom dollar that every other state will soon follow suit to eliminate this anti-consumer practice of mandatory mail!

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