Twas the Day Before

It was the day before Christmas in the store and normally we are running around like headless chickens. Today, however was different. Very few folks in shopping. I guess they are crowding the grocery stores and big boxes for that last minute discounted stuff that we all seem to give each year. I remember past Christmas's when we were lucky to get a gift. Most of our fun came from playing with cousins we hadn't seen in a long time, or showing off the one present we really wanted or eating food that we only got at Christmas. I know I am not talking much pharmacy today but I think that what is happening to us in pharmacy is just part of a bigger problem we have in our county. We have forgotten how to be compassionate and giving. We want instant reward, not reward from hard work and dedication. I was talking to a friend of mine who works for the 3 letter pharmacy company and she was telling me that they were gearing up for all those Express Scripts customers to arrive in their stores. She was filling up gift bags to give to those switchers to thank them for choosing them. Something for nothing. Customers, patients, friends, whatever you call them, have forgotten the night you came back to the pharmacy to get medicine for their sick child 10 years ago, or that time you went out of your way to get a certain drug for them. They are loyal now to the card. If the card says go to xyz and you get something for free then off we go for the discount or free stuff. They remember us only when they are told no at xyz. I had a doc's wife call today who wanted us to order some brand Sudafed PE (yep) and she hasn't had a script filled here in 6 months. I know she only called us because her xyz didn't have it or wouldn't order it. Yes, it seems we are only appreciated when we go out of our way to provide that expected service and give something extra as a reward to those who come in thru our doors. XYZ and big business have taken our friends and neighbors and wooed them to the point that they are usually just drones following directions. We will have those folks, as will you, in January as Walgreens will be referring to us all the followers of Express. We need to do our best to let them know that we are taking their crap insurance because unlike their company, we do care for people and most of us operate at a loss because we care. I know I am supposed to be merry and jolly today but getting a 217 page provider manual in the mail from CVS/Caremark today and getting a 20 page fax from them also today just tends to make me a little grinchy. Keep the faith my friends because tomorrow is just around the corner and just when we think it's going to get better, it doesn't. So, when times are bad and we think we need to throw in the towel, look to what's really important. Your family and those around you that support what we do day in and day out. You may not have your loyal customers (whatever) but you will always have your friends and family. Cherish your day tomorrow and remember the reason we celebrate Christmas. It's not the stuff or the food. It's the life we have been given by he who sacrificed all. Merry Christmas.
Kris

AMMO & Uncle Scrooge

Hey Kids, ever been hunting? Getting up early in the morning to go into the woods before daylight so you can bring home the deer bacon?  Well, New York has gone into the woods and bagged a big ole mouse.  What, a mouse?  New York just passed a bill prohibiting mandatory mail.  Sounds good, but the problem is that it exempts government plans AND union negotiated plans.  What's left?  Not very much I could guess.  Why in the world when pharmacy organizations try to do the right thing they don't stick to their guns and fight for what's right.  You hear, "well, we couldn't get it passed without making concessions and this is better than nothing."  Congratulations New York, you've gone hunting and with your AMMO and all you can bring home is a mouse. You left the big game in the woods.  May your next hunting trip turn out better.  Now for Uncle Scrooge.  We all have an Uncle we hate to see at our family reunion.  He may be the guy who always gave you noogies or smelled bad.  One of independent pharmacy's uncle is our local government.  Recently around our state the county and city governments have been giving out discount cards for local residents.  These guys have been wooed and swayed by those sweet talking PBM discount card folks.  The government agencies are just trying to help the underprivileged folks in their town (they say).  Bless their hearts, they really do care.  NOT..just another way to line their coffers.  You see for every dollar spent on the card the agency gets a REBATE and the pharmacy who accepts the card gets SCREWED !! As long as there has been pharmacy there has been compassion for the poor and no one cares more about folks getting their medication than your local independent pharmacy.  The caveat is WE determine to who and when we want to give away OUR discounts.  I bet the local government agency never asked the PBM discount card folks how much they negotiated with the local pharmacy to determine the discount.  I bet they didn't talk with their local pharmacy to determine if this was a program in which they agreed to participate. I think that when they heard how much their government could potentially make off the backs of their own neighbors (the pharmacies) all thought of compassion went out of the window.  SHAME on the league of municipalities and the association of county governments.  You guys are hurting your own local business owners.  Did you even try to talk with your local guys about developing a program that accomplishes the goal of taking care of the poor without the PBM discount card folks?  No, I bet that when the dollar amounts started flowing your little heads had visions of sugar plums.  Now, I know times are hard (especially at independent community pharmacies) and our local governments need all the revenue they can get to keep county and city services running smoothly.  I have an idea for you.  When we do (rarely) accept a new insurance plan we have to provide the plan with tons of info.  Pharmacy license, proof of liability insurance, DEA license, etc.  Guess what they provide us with?  NOTHING !!  The PBM's have record profits (they almost have a license to steal) and they don't have to register with ANYONE.  My question and suggestion is this.  Why not?  If I have to have a state license, a county license and a city license to fill prescriptions in a business I own, then why not the PBM's.  Their profit is derived from contracts they have with payers whose employees get prescriptions at the local pharmacy.  So governments, where is their business license?  If I can't do business without one, how can they?  I would suggest that if all local governments made the PBM's buy a business license they would make many many times the money they would on offering a discount card to residents.  Just think, if a pharmacy has a million dollars of payment from say, Medco, then why wouldn't Medco pay a business license based on the million dollars of sales that they generate?(We don't generate the sales, we don't negotiate the contract with the payer and we don't issue the insurance card)  If Medco had to pay a business license based on sales,(let's say 2%) then that million would turn into about 20 grand for the municipality.  Now, multiply that by the number of pharmacies that are in your county and city and the number of PBM's that do business in your county and city.(a very large number)  I say, if PBM's are giving away my discounts and claiming my sales and inventory as their own, then let them pay for the same things for which I have to pay.  Make them pay for a city business license, a county business license and a state business license.  Since they claim they are such a big part of pharmacy (re: the new Health Springs ad on TV and how they prevented an interaction) make them register with the board of pharmacy and the medical board.  These companies are all in top 100 Fortune 500 list.  If they do business locally then make them pay locally.  The only way the PBM model works is because the PBM's are not regulated, hence, not taxed and properly licensed.  The way I look at it, PBM's are paying independent pharmacies rock bottom fees to perform a service for them, so anything we can do to help our local governments collect their fair due from the PBMs should be on our New Years resolution list. We should suggest that the government agencies start with their own PBM plans. Maybe someday soon the PBM's will be required to send us their license before we can fill their prescriptions. Sounds kinda nice doesn't it.  PBM's are constantly hiding behind contract law so I say let's use contract law to make them play fair. Let's get them licensed and registered. When Medco/Express Scripts, Caremark, and other PBM's all have to have licenses in every city, county and state in the country, it may not be such a profitable business model after all...
Kris

Lipitor My Lipitor

Did you read the news last week?  Pfizer announced they would offer their brand Lipitor to PBM customers at the generic copay rate.  Wow, what good corporate citizens.  There were many newspaper articles that said Pfizer would give up at least half of their profit on each 90 day supply of Lipitor (about $100). Considering the cost of 90 Lipitor to be around $450 dollars for 90 tablets,that would be a $200 dollar profit after expenses like: TV advertising, cost of sales people, etc.  I just looked at my reimbursement to dispense a 90 day supply of Lipitor from one of the top 3 PBM's (hint: Express Scripts) and guess what my reimbursement just happened to be?  Let me tell you. (I hope I don't get arrested) I was paid $451.45 for the cost of the drug and a 25 cent dispensing fee.  So if the newspapers got it right, I made a large $1.45 for buying the product, stocking it in a legal licensed pharmacy, having a professional dispense the product to the patient, and, including a bottle and label to boot.  If you are keeping score, it's Pfizer $200 and me $1.45.  The difference is Pfizer's $200 is net profit and mine is gross profit.  My patient paid me a copay of $9.00 today for 3 months supply and Express will send me the rest in about 30 days.  I guess the liability insurance I carry in order to fill prescriptions and the license that I have to buy from the state and the DEA license I have to buy from Uncle Sam have been reduced  (not on your life) because the payers and PBM's don't value the service I provide to my customers.  Service like coming back to the store in the middle of the night to fill a hospice prescription for a dying loved one, Service like free delivery to the elderly who don't drive or live alone, Service like holding tickets for prescriptions til pay day.  I guess the payers and PBM's don't care about their employees getting services like these.  Helping people is the reason most of us pharmacists went to pharmacy school.  It's a sad day when our society allows big business like PBM's to drive the profit down in our home town small businesses so much that many can't afford to pay their power bills.  I am happy that Lipitor users will get it for the generic copay.  I just wonder why Pfizer couldn't be a good corporate citizen and just drop the price of the Brand Lipitor to the generic price (about $200 for 90 tablets).  My cost would go down, I would stock Lipitor and not the generic (as much) and everyone would be happy.  Well, except the folks that have back door deals with Pfizer. (PBM's and many payers).  I just happen to like watching "Boardwalk Empire" on HBO.  It's about Atlantic City during prohibition and how mobsters became popular with governments and employers.  Al Capone had many back door deals to sell illegal alcohol and strong armed many businesses in order to keep his profits high.  Our government eventually got Al and set up rules that would help protect small business from ruthless businessmen like him.  It seems to me that many of the PBM's took a page right out of old Al's playbook.  (on a side note; did you know that when prohibition started Walgreen's only had 10 stores and when prohibition ended 7 years later they had 500 stores?  Talk about making hay!)  I have to start wondering when our profession is going to wake up and demand reform for payment.  Reform for product payment (prescriptions) and reform for professional services.  If we don't do it, who will?  If the Express Scripts/Medco merger goes thru then about 40% of my business will be Express Script.  Hypothetically if I do 1000 prescriptions a day I would do 400 ES/M prescriptions.  I would make about $180 bucks.  If I sold potato peelers (like the guy in New York (Joe Ades) who put his daughter thru Harvard) I would make lets see: 1 peeler for $10 or 3 for $20, and I sold 400, I would make around $2500. And no pharmacy school, no professional liability insurance, no building, no employees.  As you see, I digress.  You get the picture.  We are being insulted every day in our profession by those business people who sign these bad contracts.  No longer can we afford to do this.  Big chains don't pay what I pay for Lipitor.  Neither does mail order pharmacy, hospitals, state governments, health clinics and many many other types of pharmacy.  Community independently owned pharmacies pay the highest price for drugs in the United States.  That is why ladies and gents we are an endangered species as we exist today.  We are the subsidizers, the brokers of free service and advice.  We are determined to take care of our patients no matter what it means to our businesses.  We have to take a dose of reality and realize that we can no longer give away stuff for free (like medicine spoons and droppers just to name a few things) or our advise.  If we are to continue to serve patients there may come a day when we charge extra to put the pills in a bottle, or charge for the prescription bag.  Don't laugh, banks are doing this every day.  It seems everyone is increasing prices on goods and services except independent pharmacy.  BTW, if you agree with me, protest.  Don't stock brand Lipitor.  Switch them all !!! Be a Rebel.  Tell your patients and customers how America pays more for prescription drugs than any other country in the world.(even though we use more drugs than any other country) (kinda opposite of how Walmart works).  Ask them to help you.  Get them to talk with the mayor about that discount card the city is GIVING away. (ask them how much money the city makes on the card program).  Get involved today.  You may be selling potato peelers if you don't.
Kris
ps.. I am a pharmacist not a CPA, but even a pharmacist can tell when they are being hosed!

Black Friday Blues

Well, today is Black Friday.  Big box stores, Malls, and pharmacy chains all over the country are working hard to make their year end profits in the fourth quarter of the year.  I heard that most of the chain operations make 50% of their profits for the year in the fourth quarter.  Small business won't see that much interest during this time as we usually can't afford to offer so called deals and give away merchandise below cost, well unless you are talking drugs. If you are talking drugs then every day is Black Friday for many independent pharmacy owners.  Why do we dispense prescriptions every day that we lose money on? Because our patient's pharmacy benefit provider believes that the only service we provide is putting pills in a bottle.  Case in point, the new Express Scripts contract that has a 40 cent dispensing fee.  As those of you in pharmacy are aware the spread on what we pay for the drug and what we are paid for the drug is just about even.  In other words we get exactly what we pay for the drug from the PBM's.  Add the dispensing fee and viola we make 40 cents per prescription.  Too bad the average price for a brand drug is over 150 dollars and the average generic is over 50 dollars.  Add the fact we have to finance the drug for the patient (really their insurance company) and we have a firestorm made for negative cash flow.  Wait, we can make up the difference by filling more generics right?  That was a true statement back before 2009.  Every PBM has dropped the cost of generics to the actual acquisition price the pharmacy pays for the generic drug.  So, we have to make our profit on the front end merchandise of the store.  Well, most Black Friday Pharmacy chains make anywhere from 60 to 80 percent of their sales on their front ends sales.  You know, merchandise made in China, cigarettes, and alcohol.  Most independent pharmacies make most of their profits from their pharmacy departments with less than 10 percent of sales from the front end merchandise.  With profits declining from the pharmacy departments and small sales from the front end departments, what will independents do to remain profitable?  The old adage "if you can't beat them, join them" holds true.  Independents are selling to chain pharmacies in larger numbers than in the last several years, or we will need to start taking a page from the chain pharmacy playbook.  China products, cigarettes, beer, wine and lots and lots of snack foods.
When I graduated from pharmacy school many many years ago I never thought that as a pharmacist I would have to become a convenience store clerk in order to make enough money to pay my bills.  With Uncle Sam and most major employers being focused on just paying for product, our professional services are being overlooked.  Don't be surprised that one day your local drugstore is either no longer there or they have become the local big box clone.  I am looking for Black Friday stuff to give away today below cost.  You guessed it, most of the prescriptions I fill today.

First Blog Ever

Hey everyone, I just finished reading the Angry Pharmacist's blog this afternoon and decided that it was time to start blogging myself.  The AP puts what we are thinking into words that we all wish we could use in our pharmacy.  However, I want to give you ammo to help keep your doors open and ask those (who we think are helping us) what they are doing TODAY to help us stay in business.  I don't know about you but I believe we should be paid for what we do and that if a drug is a commodity then we should price them as commodities with a 30% markup (like everyone else in retail does).  If drugs are part of health care then let's price them according to service pricing like hospitals and doctors.  I have seen my profit margin shrink over the years due to PBM's constantly lowering reimbursement on behalf of their customers (the payers). My business is on the fence not due to mismanagement or extravagant lifestyles but by being marginalized by the PBM's.  More to come on this later.. Starting in 2012 I will see many of my patients forced to the local CVS because of the sweet heart deal they have with Atena, a Medicare D plan.  One of my customers asked me why she would have to pay 9 bucks here but nothing if she went to CVS?  I responded that our own government has allowed discrimination against freedom of choice.  CMS has allowed a violation of the health care law (in my opinion) that disadvantages independents and gives all the chains the ability to fight over the Part D plans.  This will lead to even lower reimbursements and guess what, independents being forced out of the networks whether by choice or not.  Patients (customers) will go to the place where they don't have to pay.  How do we compete with FREE, especially from the government?  Community pharmacy has always given back to our communities but now we must ask our communities to give back to us.  We must have their help in complaining to CMS and Congress about these unfair networks.  You can also help by asking NCPA, APhA and your co-op what they are doing about it!  You know those folks who complain every time they come in the door and how we dread talking to them? Well, that patient needs to be You!  We need to be the squeaky wheel and not the complacent folks we are.  Kudos to PCAN and PharmacyTruth for helping get the grassroots involved.  I don't know how many of you will become involved in our plight and fight, but if just one of you will get angry (see Angry Pharmacist) and start being squeaky maybe we can change a few things.  Stay tuned..
KA

post script:  let me see your comments and thoughts..