Walgreens takes its lumps and moves on
Apparently, there’s life after Express Scripts.
Walgreens took its lumps in January after failing to mend its very public rift with pharmacy benefit management giant Express Scripts, reporting a 2.3% drop in sales for the month. But considering that the PBM’s millions of customers represented $5.3 billion in prescription sales for the 7,818-store drug chain in fiscal 2011, it could have been worse.
January was the first month in which Walgreens operated without benefit of a contract to fill prescriptions for Express Scripts’ millions of members, so it marks a litmus test for the nation’s biggest drug store operator as it moves into a post-ESI era. The impact of that loss of business was plain: In spite of a 2.7% increase in sales at the front of its stores for the month, customer traffic in comparable stores — those open more than a year — fell off 0.6%. The impact on Walgreens’ pharmacy business was much more direct, with pharmacy sales down 6% and comparable-store pharmacy sales sliding 7.9%. What’s more, Walgreens pharmacists filled 8.6% fewer prescriptions during January than they did in January 2011, when Express Scripts accounted for 12.4% of the company’s total prescription volume, according to the chain.
Company leaders were braced for the downturn, and had been since making the momentous decision to walk away from Express Scripts’ costly business in mid-2011. That decision was based on the failure by the two sides to come to terms over the level at which ESI reimbursed the chain for filling its members’ scripts, and since then neither side has budged.
“We expected that January would be a very challenging month on a comparable-prescription basis because of the impacts from not being part of the Express Scripts network as of Jan. 1 and the much milder cough, cold and flu season we have been experiencing,” said Kermit Crawford, Walgreens president of pharmacy, health and wellness services and solutions.
Nevertheless, Crawford said he and other company brass already are well along on the post-ESI strategy that, if successful, could serve as a template for how the retail pharmacy industry’s biggest and most powerful players could reduce their dependence on PBM contracts and still thrive. “With January now behind us, we are moving forward with relationships with large and small employers, health systems, physician groups and other PBMs who value Walgreens’ ability to help lower overall healthcare costs,” Crawford said. “As we expect these relationships to grow, and as we move past the impact from this year’s weak flu season, we anticipate an improvement in the coming months in the number of comparable prescriptions filled relative to January’s result.”
On Thursday, Walgreens added another plank to its new strategic platform when it agreed to buy key assets from BioScrip, a national provider of specialty pharmacy and home health services. The addition of BioScrip’s “clinically focused community specialty pharmacies and access to additional limited distribution drug therapies” will “create a strong network of support for our core drug store business to provide specialty pharmacy solutions to our patients,” Walgreens president and CEO Greg Wasson said. “This acquisition also significantly expands our nationwide reach to an additional half-million patients with chronic and complex health conditions who have strong clinical relationships with their current BioScrip pharmacy,” he added.
Walgreens Leads the Way! period.
NACDS lays down gauntlet against PBM lobby at Regional Chain Conference
NAPLES, Fla. — In the five years since he has led the National Association of Chain Drug Stores, president and CEO Steve Anderson has operated under a sound policy; so simple, it is the advice he gives his own children: “We don’t start any fights — but we sure are going to finish them.” On Monday, Anderson and NACDS chairman Bob Loeffler, who also serves as H-E-B chief administrative officer, told NACDS Regional Chain Conference attendees here, that now they are going to take that fight to the PBM lobby.
NACDS used the meeting to introduce the PBM threat as a new, third pillar to the critical policy issues it currently faces along with Medicaid AMP rule legislation and MTM reimbursement.
“Increased rancor on the part of the PBMs is accompanied by a damaging array of PBM practices, all of which you personally know too well,” Loeffler noted. “Let me throw out just a few and see if they sound familiar to you: lack of transparency; the frequency or should I say infrequency of updating MAC [maximum allowable cost] pricing; more margin compression each year; restricted networks; unreasonable and capricious audit rules; use of our patients’ data; blatant conflicts of interest including converting your patients to mandatory mail order; in short, topics that threaten the sustainability of many in this room, and that threaten the access and cost of care to the patients we serve.”
Anderson and Loeffler drew Regional Chain Conference attendees’ attention a recent series of ads funded by the Pharmaceutical Care Management Association that ask readers to choose between denying a fictitious child named “Maggie’s medications,” or cutting “pharmacy overpayments,” another fiction. “Raise your hands if you’ve ever had any pharmacy overpayments,” Loeffler said. In addition, to running its own ads that tell the industry’s simple story, “Pharmacies. The face of neighborhood health care,” Anderson and Loeffler also urged attendees to participate in its Rx Impact Day meetings next month.
“If you can envision the possibility of your company being pushed off the edge of a cliff, as a result of policies that aren’t right and that jeopardize patient care, then you need to be with us in Washington, D.C., on March 21 and 22,” said NACDS chairman of the board Bob Loeffler of H-E-B. Loeffler referred to NACDS RxImpact Day on Capitol Hill, which will be held in Washington, D.C., on those dates.
Anderson promised to tell the story of community pharmacy as a “disruptive innovator,” borrowing the concept first advanced by Harvard Business professor and author Clayton Christensen, which also inspired the work of the late Steve Jobs at Apple, he said. Pharmacy is providing innovations that are creating new methods of healthcare delivery and that are lowering healthcare costs, he explained.
“If we position community pharmacy effectively as the face of neighborhood health care, this industry will emerge as a disruptive innovator and will create a positive long-term impact on healthcare delivery and for the good of patients. But we cannot just sit back and let that happen; we have to get out and fight for it,” Anderson said.
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Study: Pregnant women with diabetes at higher risk of delivering baby with birth defect
NEWCASTLE UPON TYNE, England — Pregnant women with diabetes are almost four times more likely to have a baby with a birth defect than women without the condition, and the likelihood is linked to the mother’s glucose level, according to a new study released by Newcastle University Monday.
The study, led by researchers at Newcastle University and the Regional Maternity Survey Office and funded by Diabetes UK, suggests that as many as 1-in-13 deliveries to women with Type 1 or Type 2 diabetes involves a major congenital anomaly, also known as a birth defect.
The analysis showed that the risk of a birth defect in the pregnancies of women with Type 1 or Type 2 diabetes was 7%, compared to an average of around 2% in pregnancies in which the mother did not have diabetes. The chance of a birth defect was reduced significantly in women with diabetes who had blood-glucose levels within the recommended ranges — which, according to Diabetes UK, has highlighted the importance of healthcare teams encouraging women who are thinking of becoming pregnant to get their blood-glucose level as low as is safely possible.
But the researchers and Diabetes UK have emphasised that, while concerning, this still means that the vast majority of pregnancies in women with diabetes do not involve a birth defect. The study also showed that blood-glucose levels around the time of conception were the most important factor predicting risk of congenital anomaly.
The findings have prompted Diabetes UK to urge women with diabetes who are considering becoming pregnant to make sure they understand the importance of careful planning. The group has also called for England’s National Health Service to provide better care for women with diabetes who may be planning to have a baby and for women who are thinking of becoming pregnant to attend a pre-conception clinic if one exists in their area or to ask their general practitioner to put them in contact with a diabetes specialist if not.
"The risk of problems can be reduced by taking extra care to have optimum glucose control before becoming pregnant," stated Ruth Bell, the study’s lead researcher. "Any reduction in high glucose levels is likely to improve the chances of a healthy baby. " Previous research has established that having diabetes increases the chance of birth defects, but this is one of the first studies to quantify the effect of glucose levels on risk."
Published in the journal Diabetologia, the study involved an investigation of the recorded outcomes of 401,149 pregnancies, including 1,677 pregnancies in women with diabetes, between 1996 and 2008 in the north of England.
Diabetes UK has an online video about pre-conception care and diabetes available here.
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