Careers in Retail Pharmacy

Medicare, Medicaid and Mail order: Pharmacy industry takes its stand

BY JAMES FREDERICK

For community pharmacy, 2006 will go down as the year of the M-words: Medicare. Medicaid. Mandatory mail.

Those three topics dominated the retail pharmacy landscape in

2006, roiling an industry already whipsawed by managed-care payers, a fast-aging population, patient-driven care and Mass merchants the electronic communi- ⁹.⁸% cations revolution.

Last summer and fall,

Hurricane Katrina and its ^$41.8B chaotic aftermath brought out the best in community pharmacy and showed that chain and independent pharmacists and their managers could pull together rapidly and effectively to get vitally needed medicines to scattered evacuees throughout the United States. Those pharmacists saved lives by responding quickly and wielding advanced electronic communications technology to link together an ad-hoc network of pharmacists, physicians and health plan payers.

For their response to Katrina, pharmacists were dubbed heroes by the Bush administration. But the year that followed has been a whirlwind for pharmacy: a time of both recognition and betrayal from the White House and policymak-ers, of growing resentment at government indifference and of gauntlets thrown. It was only a matter of weeks after Katrina be-

Drug chains still dominate

Total $ sales = $230.3 billion _{Supermarket 12.0%} Mail order/Internet _19.1%

$27.6B $9.8B

Mass independent drug stores 18.2%

Careers in
Retail Pharmacy

Publisher John Kenlon Editor/Associate Publisher

Tony Lisanti

Executive Editor Rob Eder

CEQ Associate ManagingEditor/ Senior Desk Editor Melissa C. Feldman Senior Editor/Pharmacy James Frederick Art Director Robert Brokman

Desk Editor Jim Wright

Corporate Director of Manufacturing

Richard Zweiback

Senior Production Manager

Theresa Nicosia

Sales Manager Tony Perkins

fore the same government officials who had praised
pharmacy for its heroic efforts to serve disaster vic-
tims were working to cut Medicaid prescription pay-
ments to pharmacies. For many in the profession, the
final straw came early this year, when President Bush
practically accused phar-
macists of cheating the
government for Medic-
aid reimbursements with
a comment about over-
charging the system.
Coupled with the
Medicaid budget cuts,
$43.9B that remark infuriated
pharmacy leaders.
American Pharmacists
_$94.5B Association executive
vice president John
Gans called the cuts an
affront to the profes-
^Traditional sion, and said Bush’s
^{drug chains} _41.0% comment added insult
to that injury. National
Community Pharma-
cists Association execu-

tive vice president and chief executive officer Bruce Roberts called the cuts “a one-two punch” that could force many family-owned pharmacies out of business. Rebecca Snead of the National Council of State Pharmacy Association Executives asserted that “pharmacists have been undervalued and their services have been undercompensated.” And even the normally unflappable Craig Fuller, former president of the National Association of Chain Drug Stores, called Bush’s remark “outrageous and uninformed.” In the face of shrinking reimbursements, unacceptable demands from public and private prescription plan payers and cavalier disregard from Washington, the retail pharmacy industry has drawn a line in the sand. From the biggest players in pharmacy retailing—Walgreens, Wal-Mart and CVS among them—to the smallest, pharmacy’s leaders are saying, “Enough is enough: We’re no longer going to accept the status quo.”

The Medicare Part D prescription drug benefit program, on the other hand, has been both a blessing and a curse for drug retailers since its nationwide launch in January, 2006. Most agree

CONTINUED ON PAGE 4

Source: IMS Health/National Association of Chain Drug Stores

Fall 2006

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