Chain Drug Review, March 16th, 2020

News Anderson DIR fees pose dire threat to patients and Rx Editors note The following article written by Steve Anderson president and chief executive officer of the National Association of Chain Drug Stores appeared on Morning Consults website on February 26 A simple truth is emerging about the complex topic known as pharmacy direct and indirect remuneration DIR fees They are as damaging to patients and to pharmacies as advertised Adam Fein the chief executive officer of Drug Channels Institute on February 13 announced his analysis that these fees have grown faster than most people realize and reached a record 91 billion in 2019 Fein wrote powerfully Our longtime readers know that Ive been skeptical about pharmacy owners claims regarding the impact of DIR fees But it does now appear that these payments have become a significant economic burden When the facts change I change my mind What do you do Those not familiar with DIR fees may appreciate an explanation Conveniently the term DIR fees coincides nicely with the word dire which pretty much sums them up More specifically DIR fees result from a Medicare regulatory loophole Payers claw back reimbursement paid to pharmacies for Medicare prescriptions claiming that they can do so based on pharmacies performance on quality measures However these metrics can lack transparency vary widely impose unattainable requirements and relate to topics out of a pharmacys control Two important results flow from this dire situation These DIR fees needlessly inflate patients out of pocket drug costs at the pharmacy counter and they also are forcing pharmacies of all sizes to fill many prescriptions below cost an unfair and unsustainable situation The Centers for Medicare and Medicaid Services has estimated that patients would save 71 billion to 92 billion over 10 years in cost sharing if DIR fees were reformed Reform also would help to confront the unsustainable situation faced by pharmacies IQVIA which specializes in health care data found that about 2000 pharmacies have closed in the past two years Research demonstrates that higher out of pocket costs and pharmacy closures both contribute to medication nonadherence or the failure to take medications as prescribed This leads to poorer health increased reliance on more drastic forms of care and higher health care costs A study published in Medical Care found that if one quarter of hypertension patients who were nonadherent became adherent Medicare could save nearly 14 billion annually preventing more than 100000 emergency room visits and 7 million inpatient hospital days The American Medical Associations JAMA Network Open published a study that found pharmacy closures led to an immediate statistically and clinically significant decline in adherence The recent journey of DIR fee relief has made the most wild roller coaster look tame Last year at this time it looked like there could be a chance for relief through a federal regula tory path That did not happen and necessity has required pursuit of relief at all levels of government Among the opportunities now before us all eyes are on the bipartisan Senate Finance Committee drug pricing legislation by chairman Chuck Grassley R Iowa and ranking member Ron Wyden D Ore Currently that legislation includes important provisions that would address the ability of payers to claw back pharmacy reimbursement as well as establish standardized and relevant pharmacy quality measures In his State of the Union Address President Donald Trump urged that bipartisan drug pricing legislation be passed and sent to his desk for signature Time will tell if DIR fee relief can finally become a reality but as the realities of DIR fees become more and more apparent time is not on the side of patients nor on the side of pharmacies Fein posed a question that should be considered by those who would stand in the way of DIR fee relief or who would tolerate inaction When the facts change I change my mind What do you do Coronavirus straining the retail supply chain Continued from page 1 By the end of 2019 U S online sales of consumer packaged goods food products totaled more than 38 billion which equate when rounded down to an average of 732 million per week Amid consumer concerns Nielsen predicts that figure will grow in the coming weeks Ecommerce may also be a factor beyond consumer purchasing as more consumers fear the spread of the virus in public In China for example small and medium size retailers are using e commerce to keep their stores stocked which wasnt an option during the SARS outbreak 17 years ago Because shopping behavior is so much different than during the SARS outbreak and because the government started to control the issue sooner we think the retail impact cycle will be shorter said Ryan Zhou vice president of consumer packaged goods for Nielsen China Store sourcing is also much different today and online suppliers have reacted very very quickly by offering store owners for example mobile applications for sourcing orders So online has really helped suppliers react and adjust their supply systems in ways that didnt exist during SARS In China consumer spending on restaurants hotels and entertainment venues has plummeted With that in mind companies across a variety of industries need to communicate closures and precautions to their frontline workforces When an epidemic like coronavirus arises managers must be able to react quickly to potential location closures and concerned employees says Will Eadie vice president of Alliances at WorkJam a digital workplace app used by the retail and hospitality industries To avoid further confusion and panic stores must be prepared with the right strategy and tools to keep staff informed about updates to location hours staffing scheduling and any new health and safety training The simplest and fastest way to ensure staff is well informed of these changes in Eadies view is to create a direct line of communication from the head office to frontline workers Stores must be prepared with the right strategy Disruption to the supply chain for U S firms could worsen should countermeasures be needed across Europe having been introduced in some towns in northern Italy this week and if parts of Asia remain on lockdown Many companies in the U S cant ignore what is happening overseas S P 500 companies collectively generate almost 30 of revenue in Asia and Europe where so far coronavirus cases have been most prevalent Additionally many of the companies with more reliance on foreign sales have performed worse than average When it comes to a free flowing supply chain the popular and established strategies work but only when they are not disrupted says global management consulting firm Kearney However the world today as Kearney notes is one of constant disruption in which conventional supply chain thinking needs to be revisited with an eye toward increasing customer satisfaction and long term financial return Harco founder Harrison dies TUSCALOOSA Ala Jimmy Harrison Jr who developed the Tuscaloosa family business Harco Inc into the nations second largest privately held drug store chain and served his community and state through numerous educational and service enterprises died February 24 at the age of 87 Harrison emblazoned his familys name over a chain of stores that through his vision and management grew across three states into hundreds of operations employing 3300 at its peak Though the Harrison family sold Harco to Rite Aid in 1997 a deal that included K B out of New Orleans that didnt signal time for retirement but queued up Phase 2 in a long life of philanthropy and community work for Jimmy Harrison and Peggy his wife of 65 years and their family including five children and 15 grandchildren As Harrison moved toward company leadership in the 60s the family owned four stores On December 8 1967 the expanding chain incorporated as Harco Drug The companys second generation leader was among pioneers of the super drug format adding rows of products including clothing groceries household goods books and magazines cleaning and automotive products and other nonpharmaceutical merchandise By the time Harco was sold to Jimmy Harrison Jr Rite Aid in 1997 it had opened 154 drug stores across Alabama Florida and Mississippi with an expansion into about 50 Carport Auto Parts stores The Harco TotalCare home health care division founded in 1978 had sold its dozen stores in 1996 to American HomePatient Tommy Ford recently retired from the University of Alabama athletics department has been asked by the family to write a history of Harco something hes been researching more than four years Fords wife Robin worked as a pharmacist for Harco in the 80s and 90s Mr Harrison was so gracious and so nice to his employees and to their families Ford said His vision his tireless work ethic was just unbelievable He was such a perfectionist He wanted Harco to be the best at everything best pharmacy best front of store best makeup He wanted Harco to be the go to store Harco was regularly named Americas Best Regional Drug Chain in annual assessments by Chain Drug Review In the 80s Harrison was named Chain Drug Store Executive of the Decade and in 1985 he served as chairman of the board for the National Association of Chain Drug Stores Through his efforts in 2002 Auburn University renamed its pharmacy school for his father who had graduated from there in 1928 After the Rite Aid sale Jimmy and Peggy Harrison devoted even more time to community service and philanthropy It already is a difficult adjustment for me You just cant do something 47 years intensely and all of a sudden turn the faucet off Harrison said in a 1997 interview with The Tuscaloosa News Over the years the James I Harrison Family Foundation has contributed to a long list of charitable organizations devoted to families the arts education and improving the lives of citizens in western Alabama and beyond The philanthropic work from the foundation is probably the best thing the family ever did he said in an interview with Tuscaloosa magazine published in 2017 We have I believe and pray had a substantial effect in a variety of areas in the state 4 Chain Drug Review March 16 2020