News from American Pharmacies, a Co-Op Owned by Independent Pharmacies.

A Co-Op Owned by
Independent Pharmacies

Working with pharmacy wholesalers, American Pharmacies saves our members real money.

March 18, 2008

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Much more than a buying co-op!

American Pharmacies is a for-profit, member-owned pharmacy buying group operating

in Texas, Oklahoma & Louisiana, with a strong advocacy arm in Texas & Washington, D.C.

Member, National Community Pharmacists Association

Beck's Corner

NCPA now one of the "big boys"

I spent much of last week in D.C. at the National Community Pharmacists Association committee meetings as a member of the legislative and governement affairs committee. I have to tell you how inspiring it was!

In just a few short years NCPA has become a force to be reckoned with on capitol hill, and in fact, they are in the top 50 of political action committees. Their recent successes prove it:

Injunction against CMS's proposed AMP rule;
A one-year freeze on increasing mail-order co-pays in TRICARE;
Federal supply pricing guidelines mandating equality in retail and mail-order rebates written into law so there can be no changes by rule, only by legislation;
Nearly 200 bipartisan co-sponsors on HR 971, the bill to give pharmacists the right to negotiate with PBMs;
Letters of endorsement from the National Federation of Independent Business supporting our prompt pay legislation;
Letters of endorsement from the U.S. Chamber of Commerce and the National Rural Health Association supporting our opposition to the proposed AMP rule.

I'm very optimistic about the future for pharmacy on the national level, thanks to NCPA's efforts. They are beefing up the communications and government relations staff to help further these successes.

One of the reasons NCPA is doing so well is they have made significant strides in the amount of political action committee funds they are able to contribute to congress. Three years ago they were in the top 900 of federal PACs, and now they're approaching the top 50.

While in DC I particpated in a telethon to help increase those PAC funds. Within six hours, 20 of us raised more than $150,000 for the political action committee!

It's looking good, but we have SO much yet to do. For example, CMS responded to the judge's injunction in the AMP case, but after a preliminary review, NCPA does not believe the government met the judge's requirement. In fact, it looks a lot like a restatement of its original rule.

Stay tuned!

P.S. Recently I spoke to the University of Texas College of Pharmacy student NCPA chapter. I went there to promote independent community pharmacy and came away reinvigorated by their energy and enthusiasm. Quite a fine group of young people. I was particularly impressed by Danielle Bailey who has been appointed to the NCPA Student Regional Council for Region 6 for a two-year term.

Heads up! Tamper-resistant pad requirement effective April 1

No, it's not an April Fool's Day joke. Regular readers of this newsletter know about this, but here's a link for a quick review, and another link for Q&A.

DEA overstepping bounds
on controlled substances

Many of you soon will wonder what happened to all the cough syrups. Come March 31, Tussionex and six others are going to be the only cough syrups with hydro left in them.

And, no surprise, the price of Tussionex is already starting to increase. It will pretty much be a sole source item at the end of the month, so anticipate a very large price increase.

Recent DEA policy regarding wholesalers and controlled substances is having a chilling effect on independent community pharmacies and their patients with legitimate pain medication prescriptions.

Some pharmacies with long-standing wholesaler relationships are having the amount of controlled substances they can order limited, and others are being cut off totally. Some wholesalers are citing a recent DEA requirement to proactively investigate customers and assist DEA in helping prevent diversion.

The National Community Pharmacists Association is particularly disturbed by DEA's attitude. NCPA has asked DEA to hold a meeting with wholesalers, consumer groups, and community pharmacy so that all parties clearly understand the expectations of DEA and can make every reasonable effort to comply. However, that request was flatly denied by DEA officials.

"We are now appealing directly to Joseph T. Rannazzisi, deputy assistant administrator, whose office of diversion control has sent letters to wholesalers resulting in overly aggressive actions being taken against lawful small business pharmacy owners," said Bruce Roberts, RPh, NCPA EVP and CEO. In his weekly update, Robert shared the following:

"To some degree I understand where both DEA and the wholesalers are coming from. Diversion and abuse of prescription drugs is a serious and growing national problem. The White House has made combating this abuse, especially among teenagers, one of its top domestic priorities.

"Wholesalers are gun-shy. In the past year, DEA has suspended several branch distribution centers from supplying controlled substances to any customers. But talk all you want about guidelines and threshold levels, for the life of me I can't see how DEA and wholesalers can't figure out the difference between a pharmacy next to a hospice and one linked to a rogue Internet pharmacy.

"I hope this does not signal a return to the overzealousness of DEA directed at community pharmacies as it did in the late 1990s in Texas. When DEA wouldn't listen to our legitimate concerns, we went to Congress which did listen.

"DEA was called to congressional hearings, and language directing them to back off was included in the agency's annual appropriations bill. I hope it doesn't come to that again. Clearing the air with a meeting would be a good first step."

CMS owes explanation for DMEPOS bidding process

The Centers for Medicare & Medicaid Services DMEPOS competitive bidding program goes into effect July 1. It allows Medicare to award durable medical equipment contracts to suppliers with the lowest bids, and is expected to dramatically reduce the number of home medical equipment suppliers.

We don't have to just accept this rule. Four good guys in the U.S. House of Representatives are sending a letter to the CMS administrator requesting information about the effect this rule will have on the nation's small business community. Learn about it here and contact your congressman to educate him or her about this issue, and they may even have time to add their name to the letter.

The majority of small suppliers, who lose out in the competitive bidding process, will be forced to close their doors.

The DMEPOS industry is overwhelmingly a network of small to medium-sized businesses serving relatively small service areas. CMS estimates there are 30,000 medical equipment suppliers in the 100 most populous geographic areas most affected by the program. Of those suppliers, CMS estimates approximately 85 percent of registered DMEPOS suppliers are considered small businesses, according to the SBA definition.

Under the DME competitive bidding program, CMS would eliminate virtually half of current providers in 10 major metropolitan areas and replace them with the lowest bidder. When this occurs, these small businesses, whose revenue is largely derived from Medicare, likely will be forced into bank-ruptcy, and forced to sever longstanding relationships with beneficiaries in their communities.

CMS estimates the savings to taxpayers will exceed $1 billion annually within five years of implementing the program. While the objective is to reduce costs, it is not clear that the new competitive bidding program will achieve this goal without unraveling the DME small business community.

Have your congressman contact Erik Komendant with Congressman Jason Altmire at (202) 225-2565. As usual, we'd appreciate hearing back from you about your congressman's reaction to this. Contact me at rbeck@aprx.org.