LEADERS AT NACDS MAP SURVIVAL COURSE FOR RETAIL PHARMACY

ORLANDO, Fla. -- While community retail pharmacies face uncertain conditions in the future, pharmacists are fashioning tools to help them survive. Among them:Formation of Pharmacy Direct Network, the new pharmacy benefit management company launched by the National Association of Chain Drug Stores in March.Recent efforts by retailers to gain equal access to pharmaceutical price discounts -- including

ORLANDO, Fla. -- While community retail pharmacies face uncertain conditions in the future, pharmacists are fashioning tools to help them survive. Among them:

Formation of Pharmacy Direct Network, the new pharmacy benefit management company launched by the National Association of Chain Drug Stores in March.

Recent efforts by retailers to gain equal access to pharmaceutical price discounts -- including the filing of a lawsuit this February by four supermarket pharmacy operators against 16 major pharmaceutical manufacturers.

Inclusion of a pharmacy benefit in most health care reform proposals.

Those thoughts were delivered by the leadership of NACDS at its annual Pharmacy Conference, held here Aug. 21 to 24 at Marriott's Orlando World Center. Delivering the speeches were NACDS Chairman Jack Futterman, who is also chairman and chief executive officer of Pathmark Stores, Woodbridge, N.J., and Ronald Ziegler, president and CEO of NACDS, Alexandria, Va.

More than 1,400 people attended the conference, representing a record 92 chains with 20,000 pharmacies, or 70% of America's chain drug stores, said Ziegler.

PDN, open to all retail pharmacies, including those in supermarkets, was formed to help member pharmacies gain access to third-party prescription plans, which now account for 50% of prescription drug sales. Retailers had until July 31 to join PDN as charter members at the cost of $300 per store. Some 32,000 individual pharmacies have joined, including those operated by Kroger Co., Cincinnati; Albertson's, Boise, Idaho, and Safeway, Oakland, Calif.

Futterman called PDN "a dream I thought couldn't happen," because, despite the obvious benefits retail pharmacies could gain by uniting in a pharmacy benefit management company, he felt potential members would be too divided on issues to work closely together. "[Pharmacists] may be genteel, but we are tremendous and fierce competitors in the marketplace," he explained.

PDN, though, should help "manage costs and improve care" at community retail pharmacies, not "squeeze them out of existence," said Futterman. NACDS has previously accused other pharmacy benefit management companies of wresting control of pharmacy from retail operators.

Ziegler said PDN has been established to enhance competition, but would not be controlled by NACDS.

"[PDN] will remain independent, no matter what those who wish it limited success may claim," said Ziegler. "PDN will be a viable benefit management player" that will be different from other pharmacy benefit management companies like Paid Prescriptions, a division of Medco Containment Services, Montvale, N.J., and PCS Health Systems, Phoenix, because it will not lock out pharmacies and will not be tied to one single economic source, such as a large pharmaceutical manufacturer, Ziegler said.

With this, he was referring to the recent acquisitions of large pharmacy benefit management companies by Merck, which now owns Medco, Minneapolis; Eli Lilly, which owns PCS, and SmithKline Beecham, which purchased Diversified Pharmaceutical Services, also in Minneapolis.

Both Ziegler and Futterman insisted community retail pharmacy

must gain equal access to pharmaceutical manufacturer discounts to compete in today's changing and competitive environment.

Ziegler said the Community Retail Pharmacy Health Care Reform Coalition, formed by NACDS and the National Association of Retail Druggists, will continue to fight for equal access to discounts because that access is vital to the future of community pharmacy.

Ziegler said community retail pharmacy "must maintain a direct channel of access to outpatient prescriptions," through equal access for all purchasers of prescription drugs "so all purchasers will compete in this changing market on equal footing."

Manufacturers should be allowed to set pricing terms based on volume, market movement performance, formularies for networks or any other reasonable standards, he said, but thenall classes of trade "should have access to those discounts on equal terms.

"A market dominated by a few 'megafirms' controlling broad product formularies, distribution and pricing at every step is not good for the country, for the citizens, for the profession of pharmacy or community retail pharmacy as a whole," continued Ziegler. "This is why we are fighting for equal access to maintain and enhance competition and to maintain an open competitive channel to the prescription marketplace for community retail pharmacy."

Futterman also attacked "discriminatory pricing" on the part of pharmaceuticals manufacturers who offer substantially lower prices on products sold to health maintenance organizations and hospital and mail order pharmacies than they do to retail pharmacies.

He recalled his first days working in a pharmacy at his uncle's store in Columbus, Ohio, in 1948, a time when he said manufacturers "used to be treated with great respect," but added that today the relationship has "faltered."

"The community retail pharmacist standing at the pharmacy counter is often the only health care professional seen regularly [by patients]," said Futterman.

"That's what pharmacy is all about. Face-to-face, eye-to-eye, personal interaction and consultation."

Futterman also said he hoped changes in the health care system would level the playing field on pharmaceutical prices. "With the elimination of discriminatory pricing," he said, "community retail pharmacists can provide superior care at cost-effective prices."

Ziegler added he also hoped a pharmacy benefit would be included in any health care reform bill that might be passed by Congress in the future.

"In this time of change," Ziegler told the crowd, "there are different visions of the future of community retail pharmacy:

"One vision includes a strong, viable, competitive community drug store infrastructure," he said. "And another sees a limited system of heavily controlled drugstore networks fitting into a market of vertically integrated pharmaceutical and pharmacy benefit management 'megafirms'.

"Three out of five visits to a doctor result in a prescription and drug therapy. It would do no good for health care reform to cover the cost of a doctor, the cost of the hospital, laboratory and other health care providers and not provide coverage for the remedies to ease the pain," he explained.

"Prescription drug therapy is on the cutting edge of health care in America and should be a major component of reform, not an afterthought and not an add-on."