Pharmacy’s future in sync with technology
Where is pharmacy automation headed, and how will it be put to use by pharmacists and the companies that employ them?
In the era of health reform, evidence-based medicine and health information technology, those questions have become fundamental for pharmacy leaders. How retail pharmacies invest in technology and harness the flood of patient and drug utilization data it generates will determine, in large part, the future of the profession and its relevance to a fast-changing health system seeking new cost-saving solutions and more effective approaches to patient care and disease prevention.
More than ever, technology is melding itself to every aspect of pharmacy operations. For proof, one need look no further than the counter and workstations within most pharmacies in 2014, where devices ranging from basic automated counting machines to robotic dispensers, on-screen imaging and scan-based verification and tracking software are shifting more and more of the dispensing workflow to technicians and central-fill pharmacies.
At its heart, “medicine is rapidly moving from a ‘product’ industry to a ‘knowledge’ industry,” said Mike Coughlin, president, CEO and CFO of ScriptPro. “Pharmacy operators who expect to participate at a high level in the knowledge era of medicine that we are now moving into will need systems to acquire knowledge, embed it in their organizations and make it available at the right place, at the right time, at the right price and with a plan for how it is going to be paid for.”
To that end, “automation suppliers should provide advanced pharmacy management and workflow systems that can support this mission,” Coughlin told Drug Store News. “The systems should be overlaid with telepharmacy support that promotes the outward reach of pharmacy services, enables knowledge and expertise to be shared across the enterprise systematically and instantaneously, and electronically documents findings, decisions, interventions and outcomes, and makes this information available internally and to external stakeholders.”
At least in theory, automation and central-fill outsourcing are giving pharmacists more time for patient counseling and participation in the collaborative care models spawned by the Affordable Care Act. Also driving the transformation is the increasing role of shared patient data in health decisions, and the growing reliance on pharmacists to be the go-to resource for accessible health-and-wellness services like medication therapy management and medication adherence programs.
Increasingly, pharmacy automation is about generating and managing information — and using that data to integrate all aspects of the patient-engagement process with a network of connected health providers, via an accountable care organization, collaborative care initiative or other type of integrated care platform. “Essential technology will be in the area of software, customer apps and technologies that allow the patient and healthcare provider to be connected and interactive,” said Christopher Thomsen, VP business development for Kirby Lester.
To that end, he said, “training for new pharmacy professionals is going to extend into areas that would surprise long-time pharmacists because the patient-pharmacist interaction stakes are being raised quickly. Every interaction will be notated, reviewed and rated, so pharmacists and pharmacy management are going to need to embrace … technology as a vehicle to interact with their patients. Filling prescriptions will be relegated to technicians and robotic equipment that can do it faster, safer and more effectively.”
Health reform is accelerating the need for transformative technology that can enable the profession’s shift to information-driven patient care specialist. Doyle Jensen, EVP global business development for Innovation, said, “one of the largest opportunities within the Affordable Care Act is for pharmacists to become providers and offer pharmacy services.”
For that reason, he said, pharmacists and managers should focus on “what areas of pharmacy they’re … engaged in now that they can automate in order to redeploy pharmacists and engage the customer with … a complete approach to pharmacy services like adherence.”
For that to occur, Jensen told DSN, “you need a platform, some type of application to engage the consumer, and the hardware built around that. Because … the only time the pharmacy provider is going to get paid for this service is if they can actually impact [patient] behavior. And in order to impact behavior,” he added, pharmacies, physicians and health plans “need to be provided with data that’s as close to real time as possible.”
Generating and managing patient data for better decision-making, more effective collaboration with other health providers, better patient outcomes and more cost-effective care will be critical to the future of the profession, technology leaders agree. “Making data more available and actionable for retail pharmacy teams will be the biggest technological development in the coming years for retail pharmacy,” said Frank Sheppard, CEO of Ateb. “Pharmacy already uses data every day for multiple dispensing-related tasks, but the ability to use that data in new and innovative ways that bring value to a broader set of constituents will be the key in how pharmacy evolves over the next few years.”
The maturing of the prescription drug market — prescription sales have plateaued in recent years, by all accounts — has made that search for a more clinical and engaged pharmacy practice model more urgent than ever, according to Ateb’s top manager. “Pharmacy must find new ways to … provide value to patients,” Sheppard told DSN. “The good news is pharmacy is in the best position to help solve the growing problem of access and affordability in health care. Using the data pharmacy already has and … integrating new sources of information allows pharmacy to proactively assist patients to achieve their healthcare objectives.”
Meanwhile, technology vendors continue to boost the power, ease of use and connectivity of hardware and software. “Since the invention of the electronic portable digital tablet in England in the late 1960s, breakthroughs have only continued to revolutionize the pharmacy industry,” said Lisa Flowers, a spokeswoman for technology provider RxMedic. “The 21st century ushered in verification systems and sophisticated imaging features, as well as the capacity to store large amounts of data about drugs being dispensed.”
“The coming era in pharmacy technology is undoubtedly going to be defined by the consolidating of tasks that once had to be done by hand,” she said. The widespread application of automated and robotic dispensing technology means “pharmacists and pharmacy technicians now have more time to address patient care, insurance matters and new healthcare initiatives, such as medication adherence and medication therapy management.
“By eliminating the need for manual counting and filling prescriptions, existing and developing technology can help to assuage or outright eliminate the concerns voiced by large numbers of professionals,” Flowers said. “The upshot of it all is that pharmacists will be able to look forward to doing what they like most: working with patients and helping one-on-one to improve their quality of life.”
This ability of workplace automation to free highly trained pharmacists from the more mundane and mechanical aspects of prescription dispensing is critical to the profession’s future, technology vendors agree. “It’s not about putting pharmacists out of work. It’s actually putting them back to work providing a true difference in health care … [by] practicing pharmacy,” Innovation’s Jensen said.
With that in mind, he told DSN, Innovation is “looking to add technology that has never been brought to market before, to enable the provider to redeploy the pharmacist and impact patient behavior.”
Here’s a look at some of the latest offerings from technology providers:
Kirby Lester continues to enhance a suite of products aimed at automating all facets of dispensing workflow, from countertop automated pill-counting and verification devices like the KL1Plus to its growing KL series of robotic dispensing machines. Its newest is the KL100, a compact, freestanding and fully automated robot with a capacity to manage 50% or more of a pharmacy’s daily prescription orders. “We will continue to develop technology tools — software and hardware — that are space-saving and cost-effective, that positively impact labor, and that improve efficiency and patient safety,” Thomsen said.
For Innovation, gearing for the future means expanding its focus beyond robotics and other hardware and software to “providing a complete solution for clients,” Jensen said. The company is working with clients on new central-fill technologies and new ways to connect pharmacists with other health providers. In addition, he said, “we’re going to adding a whole angle to this adherence platform to bring the pharmacy into the home itself … at the point of consumption of the medication.” Details will be forthcoming later this year, he said.
ScriptPro is enhancing “telepharmacy-enabled systems that assimilate information and systematically enforce procedures to make sure drug products are properly identified and matched to patients’ needs and clinical protocols,” Coughlin said. Its telepharmacy offerings “are able to deal with investigational drugs, specialty pharmacy products and REMS procedures, and can integrate patient genomic information into clinical decision support processes to bring this knowledge to bear in screening individual patients for drug effectiveness and appropriate therapeutic ranges,” he added.
Ateb is working with chains like Thrifty White to provide turnkey solutions to their drug adherence efforts via medication synchronization solutions, among other initiatives. “Ateb’s Time My Meds medication synchronization solution and our Patient Management Access Portal organize pharmacy data in a clear and actionable manner that facilitates the pharmacy team to make a dramatic, positive impact on adherence and improve patients’ health,” Sheppard said. The company also is “actively working with our pharmacy partners to develop new paths [with payers, employers, hospitals and third-party administrators] for the pharmacy to be remunerated for these incredible results.”
VoicePort specializes in helping pharmacies and pharmaceutical companies automate their customer-service communications via interactive speech recognition, as well as online and mobile applications. The company applies that technology to PharmaPhonetics, a suite of solutions that go well beyond IVR technology by leveraging “automated self-service applications that combine technology, analytics and pharmacy operations expertise to deliver a full suite of personalized multichannel patient communication and adherence applications,” according to Adam Vargulick, VoicePort’s director of product management.
“As the Affordable Care Act is implemented, the impact will be felt across all areas of the healthcare delivery system,” he said. “VoicePort is committed to help its clients understand these operational impacts.”
Adherence and medication compliance, Vargulick added, “will continue to drive our product development.” To that end, VoicePort has developed a HIPAA-compliant automated patient-prompt and data-capture program called SynchroScript. The program helps pharmacies adopt an automated medication synchronization offering for patients, boosting drug adherence by synchronizing all their prescriptions each month and giving pharmacies the tools to analyze proportion-of-days-covered compliance rates and other data.
PharmaSmart, which specializes in kiosk-based cardiovascular diagnostics and out-of-office biometric screening solutions, is setting its sights on a June rollout of the PharmaSmart 2000D. The cutting-edge patient screening station includes a wide range of diagnostic tools and conveniences beyond a blood-pressure monitor. Among them: a patented system for detecting arterial fibrillation that could help pharmacists intervene with patients to prevent strokes. The sit-down kiosk, which is compact enough to install in virtually any pharmacy department, also includes a recently patented arm cuff for obese patients, a pregnancy risk factor test, a barcode scanner, a smart scale for measuring body mass index and built-in communications capabilities for uploading test results via wireless or USB port.
The device, said PharmaSmart COO and general manager Ashton Maaraba, gives pharmacists “a hands-free, real-time connection with all critical patient biometrics” and “the opportunity to monitor conditions and improve outcomes.” Those capabilities, he asserts, will be critical to pharmacy’s future as a full partner in the health system.
“Retailers cannot fully optimize their latest pharmacy objectives — specifically those linked to improving patient outcomes, such as MTM and … disease prevention — unless they drive participation rates to a level that can be accurately measured,” he said. “PharmaSmart’s new product resolves that problem.”
RxMedic’s newest breakthrough is the RM64, which it markets as “the fastest robotic dispensing system on the market.” Introduced in July 2013, the robot is fast: It’s capable of filling as many as five prescriptions per minute, the company claims, can count any pill size or shape, and interfaces with any pharmacy management system. The RM64 also provides photo verification with a digital image of each prescription that it stores for future reference. The system brings to four the number of high-tech pharmacy dispensing systems developed by RxMedic, including the Automated Dispensing System robot that can dispense 256 different medicines and also features on-screen photo verification; the Eyecon Visual Counting System; and RxMedic ACS, an automated pill-counting system that can be scaled for any pharmacy with countertop, endcap or freestanding models. “Pharmacy robotics are changing the way a pharmacy operates,” Flowers reported.
“It’s up to the retailers to make the decision which direction they want to take their pharmacy and total health and wellness strategy,” Maaraba said. When making decisions about what technology they invest in to stay abreast of a shifting and increasingly interconnected health system, he said, pharmacy managers must choose between “the cyclical path, or the path that will drive a sustained revenue channel that keeps them competitive throughout the marketplace.”
“It’s certainly not an easy decision for the retailers,” Maaraba added. “All we can do is continue to innovate and streamline solutions … they can benefit from.”
“PHARMACY OPERATORS WHO EXPECT TO PARTICIPATE AT A HIGH LEVEL IN THE KNOWLEDGE ERA OF MEDICINE THAT WE ARE NOW MOVING INTO WILL NEED SYSTEMS TO ACQUIRE KNOWLEDGE, EMBED IT IN THEIR ORGANIZATIONS AND MAKE IT AVAILABLE AT THE RIGHT PLACE, AT THE RIGHT TIME, AT THE RIGHT PRICE AND WITH A PLAN FOR HOW IT IS GOING TO BE PAID FOR.” MIKE COUGHLIN, PRESIDENT, CEO AND CFO, SCRIPTPRO
“[MANAGERS SHOULD FOCUS ON] WHAT AREAS OF PHARMACY THEY’RE … ENGAGED IN NOW THAT THEY CAN AUTOMATE IN ORDER TO REDEPLOY PHARMACISTS AND ENGAGE THE CUSTOMER WITH … A COMPLETE APPROACH TO PHARMACY SERVICES LIKE ADHERENCE.” DOYLE JENSEN, EVP GlOBAl BUSINESS DEVELOPMENT,INNOVATION
“MAKING DATA MORE AVAILABLE AND ACTIONABLE FOR RETAIL PHARMACY TEAMS WILL BE THE BIGGEST TECHNOLOGICAL DEVELOPMENT IN THE COMING YEARS FOR RETAIL PHARMACY.” FRANK SHEPPARD, CEO, ATEB
Managed Medicaid boom could mean more generics
Now that most generics have declined in cost, plans will look for new ways to control health spend and ensure that generics are being used whenever possible. Prescription drug spending is down, and generic drugs made up 77% of all 2012 prescriptions, according to the Centers for Medicare and Medicaid Services. Could this generic utilization percentage go even higher as a result of recent healthcare legislation?
Medicaid is increasingly becoming a managed care program, and states are looking to entities like pharmacy benefit managers to help them manage their drug spend.
The coming boom in managed Medicaid
The market growth in government-based health care is likely to drive managed care organizations to utilize more generics. As more Medicaid enrollees gain access to coverage as a result of the Affordable Care Act, these patients may need to increasingly be managed by outside entities to keep costs low. The Centers for Medicare and Medicaid has estimated that Medicaid expansion could add 8.8 million more people by 2016.
Managed Medicaid is essentially an arrangement between a state Medicaid program and a managed care organization, or MCO. The program began in the 1980s as states were first moving Medicaid patients into MCOs for better care and fewer unnecessary services and costs. Under managed Medicaid, the MCO provides services to Medicaid enrollees for a fixed, per capita payment. These services are similar to those that the MCO provides to their commercial customers enrolled in private plans. There are two prevailing types of managed care models: 1) a risk-based MCO and 2) a fee-for-service primary care case management model, PCCM.
Before the 2010 passage of the Affordable Care Act, states were forbidden from collecting rebates on medications that MCOs purchased for Medicaid beneficiaries. In April 2010, the ACA expanded the Drug Equalization Act to managed Medicaid enrollees. This allowed CMS to get the same drug discounts under the managed Medicaid program as it did under a fee-for-service PCCM.
The shift from a fee-for-service to a capitated model has more than doubled the share of Medicaid prescriptions handled by managed Medicaid plans. IMS has calculated that from September 2011 to June 2012, the amount rose from 19% to 46%. Over the same period, the number of monthly prescriptions these plans dispensed rose from 4.9 million to 12.5 million. In their study, IMS determined that states using managed Medicaid had generic utilization rates of 3% to 14% higher than in states using fee-for-service. This could be indicative of future generic usage as states enroll more Medicaid patients into managed care plans.
States became eligible for drug rebates in 2010. Before then, many would carve out the pharmacy benefit from managed Medicaid contracts to maximize their reimbursement returns. States with capitated managed care contracts can “carve out” certain services from capitation rates and continue to provide them on a fee-for-service basis, meaning that the prescription drug benefit plan is managed separately from the other benefits in a health plan. But now that rebates are allowed, the number of states with carve-outs has declined.
A wrinkle in the new managed Medicaid equation is that now these plans are not required to provide access to all of the drugs from manufacturers that participate in drug-rebate programs. This may mean that fewer brand-name drugs will be given to enrollees, and more generics will be provided instead.
CVS Caremark is the managed Medicaid leader
States have a strong incentive to manage the cost growth associated with managed Medicaid. This is due partly to the previously mentioned expansion of drug rebates. New drug rebates will contribute to savings, but the management of capitation costs also will be essential.
It appears that PBMs, which also are large supporters of the use of generic and biosimilar medications, will drive managed Medicaid control. CVS Caremark recently revealed in its 2013 analyst day report that its PBM alone controlled 28% of the lives enrolled in managed Medicaid in 2013, making the company the leading PBM in the managed Medicaid market. The three biggest PBMs — CVS Caremark, Express Scripts and OptumRx — control half of managed Medicaid, versus 67% of the overall market, according to a report from Pembroke Consulting.
In addition, overall managed Medicaid enrollment is expected to grow by 42% by 2016, according to CVS Caremark. By that year, PBMs will therefore be managing more than 8 million new lives. CVS executives say this growth will come from two main sources: 1) members transitioning from fee-for-service Medicaid to managed Medicaid and 2) new enrollees from Medicaid-eligibility expansion.
Thanks to a recent deal with Cardinal Health, CVS also will benefit from improved generic sourcing. As a result, CVS will add critical scale at a critical time when the company has the most number of lives in its hands.
Medicare pushing for open pharmacy networks, spelling big changes for pharmacy providers
The federal agency in charge of Medicare is pushing for a major overhaul of its Medicare Part D drug benefit program for seniors. Those changes, if adopted, could help level the competitive playing field for pharmacy retailers in Part D plan networks, reduce competitive advantages for preferred pharmacy networks and mail-order pharmacies, and put a tighter squeeze on pharmacy benefit managers.
Thus, the proposals by the Centers for Medicare and Medicaid Services for the 2015 federal fiscal year could spell big changes for retail pharmacies. Among the most far-reaching are:
- A proposed move by CMS to scrap the current system of tiered pharmacy networks, under which many Part D prescription drug plans, or PDPs, set up preferred pharmacy networks that offer patients lower out-of-pocket costs. Under the current system, PDPs lower Medicare patients’ share of the cost of their prescriptions by reducing drug reimbursements and fees to pharmacies that agree to participate in the preferred networks and sacrifice higher per-prescription gross margins in exchange for higher patient volumes. The pharmacy benefit management industry is squarely behind the move to preferred pharmacy networks and touts the savings that are passed on to Medicare, but CMS has raised concerns over the impact those limited networks are having on patient access and overall cost of care;
- A related proposal to open any Part D plan’s “preferred” provider network to any pharmacy willing to offer the same prescription prices and fees as a preferred pharmacy; and
- A move to eliminate the cost-sharing incentives by which some plans steer Medicare patients into mail-order pharmacy, based on CMS’ concerns about the extra time it takes for patients to receive their prescriptions and doubts about the ultimate cost-saving benefits of mail to Medicare and taxpayers. “We have no reason to discourage [beneficiaries’] continued use of these [mail] services,” CMS noted. “However, due to the difficulties reported to CMS with consistently and effectively filling short-time-frame supplies through mail order, we do not believe that Medicare beneficiaries in general should be incentivized through lower-cost sharing to utilize mail-order pharmacies for initial prescriptions or 30-day supplies.”
Medicare administrators put forth the new recommendations after a lengthy review of Part D reimbursement patterns and costs, and gave interested stakeholders until March 7, 2014, to comment on the proposals before issuing final regulations. The recommendations are part of a massive, 678-page document published Jan. 10, titled “Medicare Program; Contract Year 2015 Policy and Technical Changes to the Medicare Advantage and the Medicare Prescription Drug Benefit Programs.”Among other goals, CMS said, the newly proposed rules were intended to “strengthen beneficiary protections; exclude plans that perform poorly; improve program efficiencies; … clarify program requirements;” and “improve payment accuracy.” But the changes mark a sea of change in the agency’s approach to reimbursing the managed care plans that administrate the drug benefit program for seniors.
“CMS wants to shake up the current model for preferred pharmacy networks, which would be required to explicitly save money for both the government and the Part D beneficiaries,” noted pharmacy industry expert Adam Fein, president of Pembroke Consulting and CEO of Drug Channels Institute. “CMS also wants to open up these networks to any pharmacy willing to cut prices.”
What’s more, Fein said, “under the proposed rules, plan sponsors and pharmacy benefit managers would face intense scrutiny over cost savings, pharmacy network design and generic prescription reimbursement using maximum allowable cost. CMS also wants to remove certain cost-sharing advantages for mail pharmacies, which would be another big negative for PBMs.”
There’s no disputing that preferred pharmacy networks have steadily captured a growing share of the prescription dollar for Medicare beneficiaries since Walmart and Humana joined forces to launch a Part D prescription drug plan and preferred network in 2011. Last year, some 42% of all seniors were enrolled in a PDP that offered a preferred network, according to CMS.
“Preferred pharmacy networks dominate the 2014 PDP landscape,” Fein said. “There are 56 plans with preferred networks, up from only 16 plans in 2013. These plans operate 841 regional PDPs, which account for 72% of the total regional PDPs for 2014.”
Despite their rapid growth — and CMS’ own data from 2012 indicating that preferred networks yield average prescription cost savings of roughly 6% — the agency concluded that limited networks don’t always lower costs to Medicare.
Indeed, in some cases, the agency noted, “a few sponsors have actually offered little or no savings in aggregate in their preferred pharmacy pricing, particularly in mail-order claims for generic drugs. Instead of passing through lower costs available through economies of scale or steeper discounts, a few sponsors are actually charging the program higher negotiated prices.”
CMS called such findings “troubling.”
The agency also was concerned about the inconsistency it found in the cost sharing and cost savings of limited networks. “In some cases, pharmacies extending high discounts are ones that have been excluded from limited networks offering preferred cost sharing, while some pharmacies within the limited networks offer effectively no discounts compared to the rest of the network,” CMS noted. “Therefore, we believe that opening up these limited networks to any pharmacy willing to charge no more than the contract’s ceiling price to qualify for offering the lower preferred cost sharing is necessary to restore price competition in these networks.”
Also troubling, noted the agency, “even assuming that preferred pharmacies were to offer lower negotiated prices than those available in the rest of the network, failure to allow access to any pharmacy willing to meet the pricing terms necessary to be included in the preferred network could mean that fewer beneficiaries would have convenient access to both lower cost sharing and lower negotiated prices than they would otherwise obtain. We seek to not only ensure that preferred cost sharing is aligned with lower drug costs, but also to maximize the number of beneficiaries who can take advantage of such savings.”
Behind that declaration, CMS added drily, is the fact that “most PBMs own their mail-order pharmacies, and we believe their business strategy is to move as much volume as possible to these related-party pharmacies to maximize profits from their ability to buy low and sell as high as the market will bear.”
In its sweeping bid to revamp the Part D provider system, CMS handed a major victory to the community pharmacy industry, and particularly to the independent pharmacy segment, in its long-simmering dispute with the pharmacy benefit management industry. “On almost all issues, CMS granted the wishes of independent pharmacy owners,” Fein said.
Both the National Community Pharmacists Association and its chain pharmacy counterpart, the National Association of Chain Drug Stores have long argued for open pharmacy provider networks and patient access in the implementation of both the Part D program and the more recent Accountable Care Act. In a joint letter to deputy CMS administrator and director Jonathan Blum in November, both groups argued that “maintaining beneficiary access” was critical to the success of the program, and they called assumptions about preferred networks cost savings “questionable.”
“Patients should be free to choose whether to participate in a preferred or open pharmacy network,” said Carol Kelly, NACDS SVP government affairs and public policy, and Steve Pfister, SVP government affairs for NCPA, in their letter. “Maintaining this patient choice allows individuals to select a health plan that best fits their personal health needs and provides accessible pharmacy locations. Additionally, community pharmacies meet patients’ needs for convenient access through a highly competitive environment.”
Separately, NCPA CEO Doug Hoey noted that the independent pharmacy group “has opposed these preferred pharmacy plans because they are not in the best interest of many patients, they have been deceptively marketed and they amount to government-sanctioned bias against small business community pharmacies since they do not require plans to offer participation to all pharmacies.”