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Retail Rx goes on the offensive.

NEW YORK -- There is a new sense of empowerment within community pharmacy following its triumph this summer in the halls of Congress.

Chain drug retailers helped convince senators and members of the House to pass pro-pharmacy legislation, even after a veto by President Bush.

National Association of Chain Drug Stores president and chief executive officer Steve Anderson made a point after the veto override of thanking retailers "for making their voices heard in Congress on these pivotal issues."

Foremost among the legislation's pro-pharmacy measures is one that delays implementation of steep Medicaid pharmacy reimbursement cuts for a little over a year. The delay provides time to find a long-term alternative to the average manufacturer price (AMP) formula, which would reimburse pharmacies below their costs for generic Medicaid prescriptions.

AMP has been a focus of community pharmacy for months, and NACDS' lawsuit over the formula led to a preliminary injunction stopping the Centers for Medicare and Medicaid Services from implementing the new model in January.

Retailers say their successes in the courts and Congress are a culmination of the industry unity advocated by Tony Civello, chairman, president and CEO of Kerr Drug.

Thanks to Civello, a former NACDS chairman, "we are more effective in speaking for retail members of all types and sizes," says current association chairman Warren Bryant, who is also chairman, president and CEO of Longs Drug Stores. "And thanks to what can only be called a 'new NACDS,' we are bolder and more strategic in our policies and our actions," Bryant added during the organization's 2008 Annual Meeting.

He stressed that a unique, customer-oriented business model has been built by retail pharmacy, including traditional drug stores, supermarkets and discount stores.

"The truth is that much of the rest of the health care system works on bankers' hours," Bryant commented. "Ask anyone with strep throat or a sprained ankle who has the misfortune to need simple medical care in the middle of the night or on a weekend--it's difficult to get in anywhere unless it's an emergency room."

That's not true for pharmacies, "which are staffed with customer service in mind," he said. They don't offer an alternative to the emergency care of a doctor, but pharmacies "most certainly provide a health care service and model offered nowhere else," he remarked.

That means stores open 24 hours, easy parking, patient consultation areas, online refills and drive-through pharmacies.

"And we do all of this without anyone having to make an appointment," Bryant emphasized. "Ours is really a modern model for health care delivery --now and in the future."

As retailers, drug chains already have grasped customer service, he added. "And we're constantly improving the model, because it is, at its core, a competitive model."

Bryant noted that to advance this model in the health care system, the industry must collaborate on a new level. As the issue of comprehensive health care reform comes to the fore, "manufacturers and retailers have to explore ways to find mutual gain," he said. They must establish a joint care model "that will, in the end, be much more effective for us and for the patients we serve than a zero-sum game."

Civello's call for the industry to speak with "one voice" was also echoed by Dave Bernauer. The retired chairman and CEO of Walgreen Co. is urging a continued emphasis on health information technology and supply chain cooperation to capitalize on pharmacy opportunities.

Through cooperation, the industry can dramatically increase pipeline efficiency for all stakeholders, and ultimately help America's global leadership and competitiveness," said Bernauer at the NACDS Annual Meeting.

On the difference pharmacy can make in health care, Bernauer stated that this industry can save millions of lives and billions of dollars if it leads the way toward the elimination of paper-based systems in health care.

"In the last two years SureScripts has gone from less than 1 million messages a month to more than 6 million," said Bernauer, who hailed the "critical mass" that is building for e-prescribing.

"At this very moment in time, pharmacy has the opportunity to lead the way into a new health care paradigm," he said. "One in which pharmacists will play a much larger role in helping patients manage their health because pharmacists will have all the information they need to help them."

Bernauer's remarks coincided with the launch by thousands of pharmacies throughout the United States of a new public outreach campaign to boost awareness of e-prescribing.

Moreover the pro-pharmacy statute enacted by Congress encourages e-prescribing in Medicare.

"For patients living in all 50 states and Washington, D.C., e-prescriptions offer the convenience of having their prescription electronically transmitted to the pharmacy before they ever leave their doctor's office," said J.P. Little and Rick Ratliff, co-CEOs of Sure-Scripts-RxHub, in a joint statement.

"Getting rid of the paper and pen also improves patient safety by eliminating the need for pharmacists to interpret illegible handwriting."
U.S. Retail Pharmacy Sales

                          2007            2006
                      DOLLAR SALES    DOLLAR SALES
TRADE CHANNEL         (in billions)   (in billions)   CHANGE

Chain drug stores       $104.80         $102.92        +4.1%
Mail order                53.11           50.46        +5.1%
Independents              47.24           43.47        +2.2%
Supermarkets              28.54           28.73        -1.2%
Discounters               25.66           24.23        +5.4%
Total                   $259.35         $249.81        +3.5%


Drug chains          40.4%
Independents         18.2%
Discounters           9.9%
Supermarkets           11%
Mail order           20.5%

Source: NACDS.

Note: Table made from pie chart.
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Comment:Retail Rx goes on the offensive.(ANNUAL REPORT OF RETAIL PHARMACY: THE INDUSTRY)
Publication:Chain Drug Review
Geographic Code:1USA
Date:Aug 18, 2008
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