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Military cutting costs via Rx negotiations; NACDS hails finding as pharmacy victory

BY DSN STAFF

NEW YORK It was one of those clear “ah-ha!” moments that don’t come around nearly often enough.

 

In recent days, the Pentagon affirmed what the retail pharmacy industry has been saying all along: that leveling the playing field between community pharmacies and big, impersonal mail-order prescription outlets does more than just expand freedom of choice for military health plan beneficiaries, and eliminate a competitive disadvantage for drug retailers. It also saves the taxpayers money.

 

The proof of that assertion came with the Defense Department’s revelation that its TRICARE health benefit program for military members and their dependents is spending significantly less on prescription medicines than called for by original spending projections for fiscal year 2010. How much less? Roughly $1.67 billion, according to Defense Department projections.

TRICARE is squeezing those savings out of its expanded power to negotiate prices directly with drug manufacturers. Before its procurement rules were changed earlier this year, the military health program could only negotiate lower prices for drugs purchased for mail-order and military-base pharmacies. The result was higher prices for drugs dispensed to TRICARE beneficiaries who opted to have their prescriptions filled at a local drug store, supermarket or mass merchant pharmacy.

For years, retail pharmacy leaders have cried foul, arguing that the higher out-of-pocket costs put their stores at an unfair competitive advantage by steering the nation’s more than 9 million TRICARE beneficiaries to mail order and PX pharmacies. The industry won a huge victory when the Pentagon agreed that the old procurement system reduced freedom of choice for those patients.

The program’s expanded negotiating power will yield will result in “remarkable savings” for Defense, asserted NACDS president and CEO Steven Anderson.

The projected savings for TRICARE’s drug procurement program could also be enough to lend new ammunition to arguments by liberal lawmakers in the House and Senate who want to toughen the drug-price negotiating provisions in Pres. Obama’s health reform plan. As things now stand, the president is reassuring the pharmaceutical industry lobby that the White House will stand behind its earlier agreement to extract a maximum of $80 billion in negotiated savings from drug makers over the next decade for federal health programs.

Many Democratic lawmakers want far more, and they argue that direct and ongoing price negotiations with drug makers could save taxpayers additional billions. Are they looking at the savings wrung out of TRICARE’s expanded negotiating power? It’s a safe bet they are.

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Rite Aid launches Rite Aid Video Values

BY Michael Johnsen

CAMP HILL, Pa. Rite Aid Thursday evening announced a new online savings program to be hosted at www.riteaid.com, where consumers who opt into viewing short informational videos on select products will receive coupons.

“Whether it’s in stores or the path our customers take to get to stores, we’re dedicated to creating an exceptional shopping experience,” stated John Learish, Rite Aid SVP marketing. “This launch of Rite Aid Video Values reinforces our commitment to customers and brands. It’s both a fresh offering for consumers and an accountable sales tool that allows brands to understand the direct impact their video has on sales.”

Videos on the site are organized by brand, category or manufacturer. In addition to product coupons, participants who watch enough videos can earn a $5 Rite Aid “bonus coupon.” Early vendor participants include Procter & Gamble, Kimberly-Clark, L’Oreal, Johnson and Johnson and Wyeth.

The Video Values program was created by AdPerk, a provider of strategic video marketing solutions for retailers.

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Bashas’ to offer a Senior Discount Day

BY Alaric DeArment

CHANDLER, Ariz. A grocery store chain that recently filed for bankruptcy protection hopes to lure more customers with a discount program.

Bashas’ announced that it would offer a Senior Discount Day, offering a 10% discount to customers 55 years and older who purchase more than $15 worth of goods. The discount would not cover alcohol, tobacco or prescription drugs.

Bashas’ filed for bankruptcy protection under Chapter 11 last month, closing 10 stores in Arizona on July 21.

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