NCPA Digest Finds Independent Community Pharmacies Reducing Health Costs Through Generic Drug Use, Patient Counseling

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National Community Pharmacists Association

Oct 10, 2011, 10:02 ET

New Efficiencies, Technology, Services Partially Mitigate Reimbursement Cuts

NASHVILLE, Tenn., Oct. 10, 2011 /PRNewswire-USNewswire/ -- The National Community Pharmacists Association (NCPA) today announced the availability of the 2011 NCPA Digest, sponsored by Cardinal Health, a comprehensive survey of the current state of independent community pharmacies. It finds that independent community pharmacies continue evolving to meet patient health needs, reduce costs, and remain a viable small business model amid a tough economic landscape, declining prescription drug reimbursements by public and private health plans, and rising expenses, such as employee salaries.

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"The 2011 NCPA Digest, sponsored by Cardinal Health, offers further proof of the adaptability and innovation of independent community pharmacists as they try to overcome significant challenges to keep serving patients," said B. Douglas Hoey, RPh, MBA, NCPA executive vice president and CEO. "By offering a variety of patient-friendly niches to complement the prescription drugs they dispense, independent community pharmacies continue to distinguish themselves from their competitors and win kudos from patients."

"Community pharmacists continue to play a vital role in improving health outcomes while reducing costs," Hoey added. "First, the Digest indicates that community pharmacists reached new highs in promoting the appropriate use of lower-cost generic drugs. Second, they are providing critical, face-to-face patient counseling on the proper use of medications, and on combating diabetes and other common conditions. These clinically trained, small business health care providers stand ready to reduce costs further, such as through coordinated care models, so long as the unsustainable rate of reimbursement cuts ceases."

Now in its 79^th year, the NCPA Digest provides these noteworthy 2010 findings:

Fueled by declining reimbursement rates and rising business costs, the number of total independent community pharmacies decreased slightly from 23,117 to 23,064.
The average independent community pharmacy's pretax net profit margin fell from 3.2 percent to 3.0 percent,
Approximately 92 percent of revenue is derived from the sale of prescription drugs.
Continuing to fill the void in underserved areas, the number of independent community pharmacies in areas of 20,000 people or less, remained constant at 52 percent.
There was a small decline in the average amount of prescription drugs dispensed from 64,635 to 64,169, although the number of refills increased slightly.
Independent community pharmacies set a new high in generic drug utilization, increasing their "generic dispensing rate" from 69 percent to 72 percent.
The number of prescription drugs dispensed under the Medicare Part D program remains at 30 percent. In a sign of the tough economy, the number of Medicaid prescription drugs dispensed rose from 14 percent to 16 percent.
Home delivery (76 percent of pharmacies offer it free of charge) and compounding (66 percent) remained among the most common niche services offered by independent community pharmacies.
Disease state management services (immunization, blood pressure monitoring, diabetes training, etc.) or medication therapy management (MTM) service were offered by 78 percent of pharmacies.
In terms of cutting-edge advancements, 90 percent of independents are connected for e-prescribing and 72 percent use point-of-sale technology.

"Cardinal Health is proud to sponsor the NCPA Digest, which provides vital demographic, business, and financial information about independent community pharmacies," said Jay Williams, vice president of marketing management for Cardinal Health's Retail Pharmacy business. "This important industry resource helps NCPA identify how they can better assist members in providing quality, personalized care to patients and helps pharmacy owners improve their businesses by benchmarking their performance against their peers."

In light of the Digest findings, NCPA reiterated its support for policies to support the patient's choice of pharmacy and to promote pharmacy competition:

Rejecting the proposed merger of two of the three largest pharmacy benefit managers (PBMs) Express Scripts and Medco – opposed by consumer groups, questioned by members of Congress, and currently under Federal Trade Commission review;
U.S. Senate and House bills the Pharmacy Competition and Consumer Choice Act of 2011(S. 1058 / H.R. 1971), which seek to promote patient choice and address unreasonable pharmacy audits; and
The Preserving Our Hometown Independent Pharmacies Act (H.R. 1946) to allow independent community pharmacies to collectively bargain for fairer contracts with PBMs, which administer many prescription drug plans and also operate competing mail order pharmacies.

"When 89 percent of prescriptions are covered by third party contracts, which are dominated by PBMs, there should be a focus on achieving a fairer and more competitive pharmacy marketplace," said Robert J. Greenwood, RPh, NCPA president and pharmacy owner in Waterloo, Iowa. "That is why we continue to press our case at every opportunity for these pro-patient, pro-pharmacist policies. We will also continue to work with policymakers and stakeholders on forward-looking issues such as the development of accountable care organizations and state health insurance exchanges."

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies. Together they represent a $93 billion health care marketplace, dispense over 37% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

SOURCE National Community Pharmacists Association