E-PRESCRIPTION EXCHANGE WORRIES RETAILERS, NCPA

ALEXANDRIA, Va. -- Executives at the National Community Pharmacists Association here recently voiced concerns regarding RxHub, a collaboration among the three top pharmacy benefits managers (PBMs), which are in the midst of developing a single standard for transmitting electronic prescriptions among physicians, PBMs and pharmacies.According to a study by the American Pharmaceutical Association, Washington,

ALEXANDRIA, Va. -- Executives at the National Community Pharmacists Association here recently voiced concerns regarding RxHub, a collaboration among the three top pharmacy benefits managers (PBMs), which are in the midst of developing a single standard for transmitting electronic prescriptions among physicians, PBMs and pharmacies.

According to a study by the American Pharmaceutical Association, Washington, patient deaths caused by drug misuse claimed approximately 218,000 American lives in 2000, and financial costs of these drug-related deaths topped $177 billion for the year. Through RxHub, and e-prescription transmission in general, it is hoped that potentially dangerous errors due to illegible handwriting will be eliminated. The technology is also expected to save time in callbacks to physicans' offices for drug verification. RxHub is expected to be operational in early 2002.

The NCPA, which represents the approximately 25,000 independent community pharmacies across the United States, met last month with the chief executive officers of the three PBMs -- AdvancePCS, Irving, Texas; Express Scripts, St. Louis; and Merck-Medco, Franklin Lakes, N.J. -- to raise questions about the initiative.

"Our concern is primarily whether PBMs should be intervening in the prescription process this early," said Todd Dankmyer, NCPA's senior vice president of communications. "We're supportive of advancing technology that will enhance safety and accuracy, but our challenge with the model is the fact that it may not be in the best interest of the patient [if PBMs intervened]."

He said the NCPA also had some thoughts about RxHub's potential to swing the marketplace's pendulum to the PBMs' side.

"Given the historical record of PBMs, they leverage the marketplace aggressively," Dankmyer said. "[With RxHub] they will have a huge opportunity to leverage the marketplace even further, and we see no reason why they wouldn't."

According to Dankmyer, doctors will have unprecedented access to patients' drug benefits plans regarding their economic situation and copayment information. He said that access may unwittingly incline physicians to comply with PBMs' mail order and take business away from retail sales.

"You're making the physicians employees of the PBMs," he said. By leveraging the marketplace in that way, Dankmyer told SN, "it's not making the right decisions for the patients."

Stacey Rich, health analyst for analysis, research and measurement company Jupiter Media Metrix, New York, also spoke about the market-share aspect.

"It could potentially shut [retail pharmacies] out, or at least divert transactions from them, since prescriptions could be sent to a PBM-owned mail-order or online arm," she said.

Officials at the individual PBMs declined to comment regarding the meeting and on RxHub altogether, but a spokesperson for RxHub said the concept "is intended to save time and money in rechecking prescriptions and eliminate medical errors."

The source said the company is still deciding on a location of operations, but it will not be based near any of the three supporting PBMs.

Dankmyer said, "They insisted their model will be open, it will let other PBMs into it, and they're only building a utility." He added that RxHub's officials said they would not deny access to health care providers or leverage the marketplace.

Retailers polled by SN regarding the RxHub endeavor echoed the NCPA's concerns and the potential benefits of the program.

Jim Cousineau, vice president of pharmacy operations, Brookshire Grocery Co., Tyler, Texas, said, "I would view with strong caution that type of relationship, and I understand the [NCPA's] concern." He added, "We've got a little too much vertical integration in pharmacy right now, and that can create a dangerous situation."

Other retailers and the NCPA were concerned about the price of the service, which may impart a 25-cent to $1 transaction fee on pharmacies.

"A concern is we may be asked to bear the price," said Gary Schra, divisional director of pharmacy, Spartan Stores, Grand Rapids, Mich. "That price should be borne by the PBMs, who benefit most directly and gain better formulary compliance; pharmacies bear enough of the brunt."

Rich said she understood retail pharmacies' cost concern.

"It sounds like it will indeed put some price pressure on retail pharmacies," she said. Roberta Armstrong, director of pharmacy for Felpausch Pharmacy, part of Hastings, Mich.-based G&R Felpausch Co., said, "Pharmacies will be charged 25 cents to $1 per prescription, and some of our recent PBM contracts only have a $1 dispensing fee, and we also have to add in software costs." She added, "It seems incongruent that pharmacies may be charged per prescription the equivalent of a dispensing fee."

Armstrong said she was also concerned about security issues.

"Hackers can get in almost anywhere, so they should look at the encrypting very carefully," she said.

However, the benefits of clean prescriptions and universal e-prescription software are enticing, said retailers.

"[E-prescribing] will be beneficial to decrease medical errors, and it's the wave of the future," said Armstrong. "This is one great opportunity to reduce that $177 billion headache."