Who Should Decide Rx Location – Payer Of Course

Today’s NYTimes article “Pharmacists Fight The Rise Of Mail Order” begs an interesting question. Who should have the right to determine choice?

As the retail pharmacies imply, should they be able to legislate that payers (employers, government, insurance companies, unions) have to allow consumers to come to their location? That seems strange to me.

If the shoe were on the other foot and payers didn’t allow their members to go to mail order, would retail allow the PBM to ask the legislature to change that? (Maybe someone can show me examples of a PBM arguing for mail having to be an option with a client that doesn’t offer mail order.)

Maybe I’m missing something here. Doesn’t the person who is paying the majority of the bill (~80%) have the right to direct care to the lowest cost channel? If someone has an issue with that, shouldn’t it be the consumers talking with their employers?

Shouldn’t competition play out in pricing and value proposition not in the government?

I’ve never heard Chrysler go to the government and say that they had to stop a large employer from limiting their choice of cars for their executive to team to Ford products.

If my employer offers me a discount to Sam’s Club, can CostCo go and argue that with the legislators?

Wouldn’t that turn our whole free-market economy upside-down?

In my opinion, payers should be able to choose their network which could include a limited number of retail locations if that met their expectations on price, outcomes, access standards, and satisfaction. It could include mail or not. BUT, it’s their choice based on the options they have and their management of their spend. Why does government have a role here?

7 Responses to “Who Should Decide Rx Location – Payer Of Course”

  1. Umm…I’m gonna throw it out there since even the retail pharmacist seemed to be missing the obvious – a pharmacist went to school and had years of education and training, they are examined by the state and passed a background check and required to have continuing pharmacology education and given a license which authorizes only them (and other clinicians only if have higher education and training) to perform the same professional duties of their license and anyone without a license who performs the same act is committing a crime. In return for the legal protection of their profession it is understood by the state and the public that a pharmacist must maintain and apply a profession level of skill and judgement reflecting their eduation and training to the performance of their profession. That is why when they fuck up, you get to sue not just their pharmacy’s corporate liability and maybe even their premises liability policy but you have that wonderful thing call their MALPRACTICE LIABILITY policy, their license, their membership in a profession, their career, their livelihood to go after. A PBM is a fictitional legal entity – it does not owe the enrollee a professional fiduciary duty, and if it fucks up well then it just files articles of dissolution and the next day the same directors can file another set of articles of incorporation. The pharmDs started out as compounding pharmacists….that took knowledge skill and judgement and everyone seems to forget that – why the pharmacists didn’t fight tooth and nail when the idea of anyone else but them being able to serve as a dispensary was floated is beyond me.

  2. Rich de Blaquiere Reply March 8, 2011 at 10:21 am

    I am a retail pharmacist and can see this issue both ways. However, I still see one point that is overlooked in this whole debate and it has to do with the price that independent retail pharmacies pay for drugs. Please refer to the Wall Street Journal article on the Cardinal health buyout of Kinray Pharmaceuticals (wholesalers make 7 to 8 times the profit on independent stores than chains and mail). I am tired of retail outlets being referred to as “high cost” fulfillment outlets. I believe that our sector has been at least as competitive as any other in terms of what we are doing to keep prices low. Unfortunately, our entire sector is looked at by the wholesalers as an unregulated tollbooth. Although independent retail pharmacies represent one of the largest sectors of pharmacy we are unable to buy at the rates of mail order and chain even from the same suppliers. Try signing the 90-day supply contract offered by a PBM when buying at these rates. Additionally, I find it hard to believe anyone can raise the issue of a free trade economy considering that one of the basic fundamental tenants of a healthy economy are being violated on a daily basis by the PBM/Mail order complex – anti-competitive behavior. All of these arguments are entirely moot until you eliminated a situation where PBM’s who own their own pharmacies aren’t the ones creating the contracts that retail pharmacies must sign. Now you even have them owning their own chains. You wouldn’t have Boeing creating contracts for Airbus? The Russian army creating contracts for united states contractors? Or would you?

  3. George, you gotta be kidding me!
    Sure employers have the right to setup pricing, allowables, reimbursements (via PBMs)….but to tell people where to go? Come on.

    Any willing provider is strong with ALL Federal programs, even though the reimbursement is very aggressive.

    All it takes is for the PBM and group to closely watch their reimbursement levels and closely monitor their program. Closing the network off makes no sense.

    And why have so many employers switched FROM vacation / sick days to PTO days?

    The employers continue to give a benefit, but they let the consumer choose HOW or WHERE they want to take advantage of it.

  4. Yes George and they should be able to tell me where to eat, shop, smoke, workout, have sex and with who…..if they are paying the bills.

    A free market only works when providers are free to compete for patients and services….not like in a PBM model!!!!

    • I do think if you’re employer is subsidizing meals or offering you a free gym that they can pick where that is. They don’t have to offer you the same value for you to use at a location of your choice. You can still go anywhere and pay full price…as you can with pharmacy.

  5. Patient should decide. If their plan makes them pay more for retail, that’s their choice.

  6. Some where along the line the payer’s, Ins. Govt.
    ETC pay, but follow the money!, Insurance premiums, Tax payers are the actually paying the bill, so should they not be in the loop? I have payed premiums for years and taxes for years so where is my voice in this? I have always felt that the ins.,Govt.,Agency and co. are practicing medicine without a license by changing the Docs Rx from a name brand to a generic. I thought you have to actually be a doctor to write/change a Script!

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