WASHINGTON Drug Store News, for the simple reason that the change actually hurts the people health reform was supposed to help—patients looking to save money on healthcare costs. —The new prescription requirement for over-the-counter medicines under flexible spending accounts, part of the new Affordable Care Act, may amount to bad medicine, many industry pundits have told
And the ramifications of that simple requirement also will be felt across the retail pharmacies that those in search of healthcare savings patronize.
No matter how you slice it, consumers are looking at increased costs associated with using FSA plans under the new Affordable Care Act. It’s not that there will be any incremental lift in the number of practitioner visits, because no one really believes a consumer now will schedule a doctor’s appointment for the sole purpose of getting a prescription for an OTC. Similarly, no one expects a consumer not to follow through on an intended OTC purchase because it’s no longer reimbursed under FSA accounts without a prescription. But consumers no longer will be able to save against all of those acute care needs for which many consumers never really consult a family practitioner—minor diarrhea or stomach upset, for example, or cold symptom relievers.
Consumers also will be buying more OTC medicines going forward, whether they have an FSA account or not. “The biggest driver of OTC over the next few years [is] going to be individual insurance policy holders with high deductible insurance plans,” said Paul Keckley, executive director of the Deloitte Center for Health Solutions.
For those consumers who do consult their doctors about appropriate therapies, there may be an incremental lift in the number of appropriate prescription-only therapies prescribed to these patients versus the number of appropriate nonprescription remedies they may have otherwise taken on their own. For healthcare payers, that means a potential rise in covered costs, as prescription remedies by and large are more expensive than their OTC counterparts. And for retailers, this has the potential of shifting some of their business from the margin-friendly front-end to the paper-thin margins generated across their prescription sales.
For those consumers who do successfully follow through with a prescription for a nonprescription medicine, there’s the cost associated with adjudicating that prescription, a cost that many retailers expect to shoulder on their own. “About 30% of PBM formularies will actually cover an OTC drug… so the consumer will have just a co-pay,” said Jeff Beadle, executive director of SIGIS, an association that helps retailers manage FSA-eligible products through their POS platforms. “It seems that most merchants don’t charge a dispensing fee on those [OTC transactions].”
What’s more, at least in this first year of the rule changes, consumers will have less of a handle on what their actual annual health-care expenditures are. This will be the last year consumers can do any kind of end-of-the-year medicine-cabinet loading on non-prescription remedies in an effort to realize the full value of their FSA accounts. FSA accounts remain use-it-or-lose-it within one calendar year, so if a consumer overestimated his or her annual spend, at the end of 2011 he or she will be left with less-convenient measures of draining that FSA account, like scheduling an eye care appointment or doctor’s visit right in the middle of the hustle and bustle of holiday season.
Categories no longer eligible without a prescription
|Allergy and sinus medicine|
|Anti-itch and insect bite remedies|
|Baby rash ointments/creams|
|Cold sore remedies|
|Cough-cold and flu medicines|
|Feminine antifungal/anti-itch medicines|
|Motion sickness medication|
|Sleep aids and sedatives|
Quality of care found at retail clinics shouldn’t be questioned
WHAT IT MEANS AND WHY IT’S IMPORTANT Retail pharmacy operators continue to expand their presence in the burgeoning market for retail-based walk-in clinics, and the services those convenient-care centers provide. And there’s growing evidence that the nation’s overwrought, cash-crunched healthcare system desperately needs those services in a time of dwindling resources, overworked primary care physicians and unsustainable cost hikes.
(THE NEWS: Take Care Health Systems’ treatment of pharyngitis, upper respiratory infections exceeds national quality benchmarks. For the full story, click here)
Indeed, the more than 1,100 in-store clinics opened by the nation’s drug, supermarket and mass-merchant pharmacy retailers over the past decade are providing a critical service, much the way a steam pressure valve keeps a boiler from exploding. And the quality of care now is beyond dispute.
To the few remaining critics who still question the value of in-store retail clinics and the level of care provided by the nurse practitioners and other health professionals who staff them, Walgreens gave another answer on Monday. The answer came from its Take Care Health Systems subsidiary, which operates more than 700 in-store clinics and worksite health centers.
According to the company, the more than 350 Take Care Clinics within its drug stores exceeded national quality benchmarks for their treatment of pharyngitis and upper respiratory infections, as measured by the Jefferson School of Population Health.
The reasons are easy enough to fathom, and they go to the heart of the mission that community pharmacies and in-store clinics say they’re in business to provide: quality, patient-focused care. Take Care professionals, according to the Jefferson study, demonstrated a patient-centric focus both at the time of initial contact between patient and professional, and afterward, when all patients receive a follow-up call within 48 hours of the visit.
The announcement came fast on the heels of other news on the healthcare front for the nation’s largest drug chain. On Oct. 7, Walgreens revealed it is working with the National Foundation for Infectious Diseases to educate the public and health professionals about flu prevention resources. The company also has joined with Families Fighting Flu, a nonprofit organization of families and healthcare practitioners, to heighten flu awareness and encourage vaccinations for children and families.
In all, Walgreens said it plans to administer no fewer than 15 million flu shots during the flu season of late 2010 and early 2011.
New report indicates times are a-changin’ for drug market
WHAT IT MEANS AND WHY IT’S IMPORTANT The drug industry is undergoing a major paradigm shift. Companies that traditionally have relied on blockbuster drugs are finding that model running dry as their biggest money-makers face competition from generics that eventually will lead to a heavily commoditized market for the disease states that have been the foundation for the model, such as high cholesterol, asthma, mental illness and gastroesophageal reflux disease.
(THE NEWS: IMS Health projects growth for Rx market. For the full story, click here)
In response, many are changing their focus to high-value specialty drugs, especially biotech drugs. For drug companies, it’s just their way of adapting to survive. But it’s also driving a shift in the world of pharmacy, feeding the growth of specialty pharmacy and, in turn, changing the role of the pharmacist in health care, all the while creating opportunities for retail pharmacies to embrace specialty pharmacy as a driver of growth as the “genericization” of pharmaceuticals threatens to dampen their sales figures.
It’s a trend that’s likely to continue. Pfizer’s acquisition of Wyeth, Merck’s acquisition of Schering-Plough, Roche’s acquisition of the remainder of Genentech and, most recently, Bristol-Myers Squibb’s acquisition of ZymoGenetics, as well as Sanofi-Aventis’ efforts to buy Genzyme, are just the largest examples of the pharma shift under way.