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Web posted Thursday, November 5, 2009

Pharmacists campaign for greater transparency in actual drug costs

By Margaret Bauman


  Pharmacist Barry Christensen of Island Pharmacy in Ketchikan fills a prescription using compounding. Photo courtesy of Island Pharmacy   
In a small family-owned pharmacy in Ketchikan, pharmacist Barry Christensen carefully grinds up capsules for an adult medication for influenza, adding a suspension and cherry flavoring to concoct a pediatric counterpart for a client.

The procedure, known as compounding, is still a specialty of independent pharmacies, part of the old-fashioned small town customer service that has helped them survive in the face of growing competition, particularly from mail order pharmacies.

"When pharmacies started in the U.S., everything was a compound," said Christensen, who owns and operates Island Pharmacy, one of two independent pharmacies in this Southeast Alaska city of 7,500.

The short answer for independent pharmacies in Alaska - 35 in all - trying to stay in business is to do what the chain pharmacies aren't, he said.

"We compound mix medicine not available commercially," he said. "For the most part we have held onto our customers."

Christensen is more than willing to oblige customers by mixing up a cherry-flavored version of the adult flu medicine Tamaflu for a child suffering from flu symptoms.

But then Christensen knows his community, and more specifically, his customers. His father, also a pharmacist, started the business four decades ago.

One financial thorn in his side these days is managed health care regulations and the pharmacy benefits managers who dictate that people covered by various health insurance plans purchase their medications through out-of-state mail order pharmacies.

Under many of these plans, the individual insurance holder can get only a 30-day supply at one time of any prescription medication from their local pharmacist, but can get a three-month supply from the mail order location.

Laura Miller, senior economist for the National Association of Chain Drug Stores, said that an average of 700,000 prescriptions for Alaska residents are annually filled by mail order, a loss of $110 million in sales to the Lower 48.

Miller calculated that if those prescriptions were filled in Alaska, they would provide another 10 to 20 pharmacist positions.

Christensen and other independent pharmacies also have to compete financially with chain store pharmacies that offer 30-day supplies of many commonly used prescription medications for a flat low rate, which may be lower than the actual medication costs.

Then there are the paperwork battles with insurance companies over myriad issues, such as filling prescriptions for newer brand name medications or providing maintenance medications to keep patients covered when prescriptions filled by mail order pharmacies don't arrive in a timely manner.

That's what happened to independent pharmacist Bill Altland, owner and operator with his wife, Sarah, of the Whale Tail Pharmacy in Craig, on Prince of Wales Island.

One of Altland's regular customers who must take a blood pressure medication on a daily basis ordered the medication through the mail order pharmacy 10 days earlier, but it hadn't arrived.

Altland obliged the customer by giving him a week's supply to cover him until the ordered pills arrived. The insurance company insisted that the prescription had been filled and refused to pay for it, requiring the patient to pay out of pocket.

Christensen, Altland and other Alaska pharmacists aren't sure that patients, or the insurance companies for that matter, are actually getting such a good deal from pharmacy benefit managers, the middlemen who negotiate prices between drug manufacturers and the mail order pharmacies.

"Pharmacy benefit managers must show it does save money," Altland said. "The problem is it actually ends up costing the patient more money because insurance goes up every year, and here, the mail is often delayed, so we end up filling orders," that insurance companies argue about paying because the order was filled, even though it didn't arrive.

The Alaska Pharmacists Association is backing state legislation, sponsored by Sen. Hollis French, D-Anchorage, calling for better transparency in drug costs to force mail order prescription firms to make public how much they actually pay for various medications and what they charge the insurance providers for them.

"The pharmacy benefit managers have had control over this without being regulated, without being transparent," said Nancy Davis, executive director of the Alaska Pharmacists Association, which speaks for some 450 pharmacists licensed to practice in Alaska. "It is not transparent to the patient. They are not disclosing the rebates they receive from the pharmacy manufacturer. They may be charging the plan much more than they are paying the manufacturer, sometimes as much as 300 percent."

While 13 states now have laws that require such transparency, national pharmacy associations are trying to get a federal law passed to regulate the industry, she said.

The federal legislation would require that mail order firms provide an explanation of benefits to customers, including the actual cost of the product, what insurance covers and what the patient pays.

Pharmacy benefit managers and mail order providers are not currently required to disclose the actual cost of products and profits made through mail order.

Meanwhile, by forming agreements with insurance companies requiring that individuals with insurance policies purchase pharmaceuticals via mail order, "they are squeezing out community pharmacies," Davis said.

"We are trying to educate the payers of the benefits, the employers, on what is actually happening. If the savings were passed on to the payers, the cost of health care would go down," she said.

It's also a matter of safety and labor economics, said several Alaskan pharmacists.

"It's important to have one place to go in order to be able to have a pharmacist manage your medications, to avoid adverse reactions," Briggs said.

If they know about all the drugs taken, pharmacists can keep patients from taking drugs that have harmful interactions when taken together.

"We work really hard at educating consumers that no matter which pharmacy you go to that you stay with the same one," she said. "Pharmacists are highly trained people who go to school for six to eight years, who are taught patient care.

"We have always offered advice," she said. "We are the most accessible health care professionals there are and people come to us and ask questions about what to do, from pharmacy-related issues to how to take care of their families."

Their skills include giving flu shots, advising patients on all manner of over the counter medications and explaining the differences, benefits and potential negative interactions.

Altland agreed, particularly on the issue of keeping all prescriptions with the same pharmacy.

While customers will be quick to fill a short-term prescription (less than three months) with their local pharmacy, they may order others through their insurance provider's mail order service.

When that happens, neither pharmacy has a complete record of the individual's prescriptions "and we don't know if there is a potential drug interaction problem because we don't have those records," Altland said. "The second leading cause of accidental death is from drug interactions. If you don't have the records in one place, you don't know if there are drug interactions."

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