PHARMACY

CVS Caremark: Generic dispensing rates rise as plan member contributions drop

BY Antoinette Alexander

WOONSOCKET, R.I. CVS Caremark’s annual insights report revealed an increase in generic dispensing rates as plan member contributions declined.

According to the 2010 Insights Report, which provides an annual review of drug trend performance for the company’s PBM client segments, 2009 drug trends show that CVS Caremark clients were able to manage pharmacy costs in the midst of the economic recession without passing along added costs to their members. In addition, plan sponsors increased their overall use of generics. These factors helped plan sponsors manage their costs while minimizing out-of-pocket costs for their members.

“While each of our client segments had different approaches and leveraged different tools, they all shared a priority in 2009 — finding ways to manage pharmacy costs,” stated Per Lofberg, president of CVS Caremark’s PBM business. “In these challenging economic times we worked with our clients to implement plan designs that would enable them to continue to control pharmacy costs while still providing their members with access to the medications they need, programs to support medication adherence and opportunities for out-of-pocket savings.”

Plan sponsors made few changes to member contributions levels last year and member contributions actually declined from 19% in 2008 to 15.7% in 2009. In addition, plan sponsors embraced opportunities to educate their members about the benefits of generic medications and encourage their use. This resulted in the CVS Caremark Book of Business generic dispensing rate increasing to 68.2% from 65.1% in 2008, despite a lack of significant generic drug introductions in 2009.

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PHARMACY

NCPA responds to CMS’ diabetes competitive bidding program

BY Allison Cerra

ALEXANDRIA, Va. A group representing the nation’s independent pharmacies is urging caution as the Centers for Medicare and Medicaid Services continues its Medicare Part B durable medical equipment, prosthetics, orthotics and supplies competitive bidding program.

The National Community Pharmacists Association issued a statement Thursday urging caution against actions that possibly could “undermine or reverse the benefits of coordinated care,” as community pharmacies work on a daily basis with diabetes patients and physicians to improve health outcomes and lower healthcare costs.

“[The] inclusion of small pharmacies in the bidding program or reimbursing them at the newly announced mail order rates eventually would result in the virtual elimination of independents from the program. Independents don’t operate with the purchasing power of large-chains or mail order competitors and thus can’t always match those prices,” NCPA president Joseph Harmison said.

The group also pointed out that seniors in rural or underserved areas depend on community pharmacies for consultations and diabetes testing supplies; the DMEPOS competitive bidding program should continue without interferring with small chain pharmacies’ operations.

“When seniors cannot consult their local pharmacists about their medications and testing supplies, inevitably problems will arise. It’s common for mail order customers to end up in independent pharmacies seeking instruction on how to use the testing supplies — care for which the local pharmacist is not compensated. Plus, many supplies are changing, so the way seniors use them needs to change. Local pharmacists help ensure patients get accurate blood glucose readings – not a false sense of security or an unnecessary state of panic,” Harmison concluded.

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Jean Coutu Group reports increase in revenue

BY Michael Johnsen

LONGUEUIL, Quebec The Jean Coutu Group on Tuesday reported a 3.8% increase in revenues to $611.6 million for the first quarter.

“The expansion of our network [by nine locations] and the solid operating performance of our organization have allowed us to reach our objectives,” stated Francois Coutu, JCG president and CEO.

During the first quarter of fiscal year 2011, on a same-store basis, PJC network retail sales grew 2.9%, pharmacy sales gained 3.8% and front-end sales increased by 1%, compared with the first quarter of the previous fiscal year. Sales of non-prescription drugs, which represent 9% of total retail sales, increased by 2.2%, whereas these sales had increased by 7.2% during the first quarter of the previous fiscal year, Coutu noted.

The recent announcement from the Minister of Health and Social Services of Quebec around lower reimbursement rates associated with generic drugs may pose a challenge going forward. The Minister on June 25 stated that as of July, 2010, the price of generic drugs will generally be established at 25% of the price for the original equivalent. The Minister also mentioned that the implementation of this reduction in prices will be postponed for a period of 4 to 8 weeks in order to consult interested parties.

In the nearby Ontario province, the Minister there recently enacted “prescription drug reform”  that will not only reduce the price of generic drugs but also reduce the professional allowances paid to pharmacists by generic drug manufacturers. If that legislation were replicated in Quebec, that could have a material impact on sales, Coutu said.

“We strongly believe that the government of Quebec must recognize that a reduction in the price of generic drugs must be adopted concurrently with measures in order to assist market participants with the transition to lower generic drug prices,” Coutu said.

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