By Staff
Editor’s note: This is the first installment of a two-part series about pharmacy benefit management companies (PBMs) and their effects on retail pharmacies locally and nationwide.
By GREG KATSKI
Community Editor
Area retail pharmacies are crying foul over a move by Beaufort County’s largest employer, PotashCorp, to consolidate its prescription-drug purchases from multiple vendors to one provider, Medco Health Solutions Inc.
With the move, PotashCorp employees company-wide will have to pay more out-of-pocket to purchase maintenance medications through retail pharmacies rather than Medco’s mail-order service, according to PotashCorp of Aurora spokeswoman Michelle Vaught.
A comparison of prescription-drug benefit payments for PotashCorp employees shows that an employee saves $10, or 33.3 percent, out-of-pocket for every 90-day supply of long-term generic drugs (like those used to treat high blood pressure or high cholesterol levels) by using Medco’s mail-order service instead of a retail pharmacy.
The move to Medco was a cost-saving measure for PotashCorp, Vaught said. Prescription drugs account for approximately 20 percent of the company’s active medical costs annually.
“While looking at ways to control costs in 2010, we found that combining all prescription drug care into one benefit administrator would help us better manage costs, while still providing our employees with a high level of service,” Vaught said in a written statement.
Some area retail pharmacies are asking this question regarding that approach: at what cost to the local economy?
Tayloe’s Hospital Pharmacy has seen a decline in prescription sales, which account for 90 to 95 percent of the pharmacy’s business, according to business manager Lori Melton.
Melton said pharmacy benefit management companies (PBMs), such as Medco, ignore fair-trade practices by offering exclusive contracts to companies using their services.
“We aren’t given a choice to provide the same medications at the same price,” pharmacy manager Wells Armstrong said.
Armstrong said Hospital Pharmacy would at least consider a contract from Medco, had one been offered.
“None of the local pharmacies — chains or independents — were offered a contract to compete with Medco’s mail order program,” Melton said.
PotashCorp isn’t the only nationwide company using a pharmacy benefits manager. Lowe’s Companies Inc., based in the Charlotte area, has joined the trend toward PBMs.
Beaufort Regional Health System’s Board of Trustees considered implementing a mandatory mail-order service last spring for employees’ prescriptions as part of an expense-reduction plan, before rejecting that idea.
“Due to the impact it would have on the local retail market, the board decided not to go in that direction,” said BRHS spokeswoman Pam Shadle. “It’s important for us to keep business local, and they recognized that.”
Under BRHS’s current medical plan, employees have the option of using a mail-order service at the same cost as a retail pharmacy, Shadle said.
Those who oppose PBMs said PBM prescription mail orders are flawed in many ways, most notably deliver services. Individuals taking maintenance medications have to remember to reorder prescriptions before they run out.
“We’re talking about seven to 10 days leeway,” Melton said.
Then, if a prescription refill doesn’t arrive on time, that individual will most likely go to his or her local pharmacy and order a seven-day supply of the prescription.
“It affects us and them,” Melton said. “We have to call the insurance company, spend 30 minutes on the phone and make nothing.”
Individuals using mail-order services also lose local contacts they can refer to if they have any questions about their medications.
“You need someone to communicate with to make sure you have the appropriate medicine for the appropriate condition. It’s a little bit of a hang up,” said Dr. Charles Boyette, head of the C.O. Boyette Medical Clinic in Belhaven.
Boyette said he understands why some people, including many of his patients, use mail-order services.
“People resort to mail order to get their meds at a reasonable price,” he said. “If (retailers) provided prescriptions at a more-affordable price locally, they wouldn’t have to worry about mail orders.”
Boyette said the majority of his patients are old and/or poor, with many of them taking up to five medications a day.
“So many of my patients have to pinch and scrape to get meds,” he said. “I find no fault in the people.”
Boyette, a former national Country Doctor of the Year, does find fault with PBMs, such as Medco. He said PotashCorp’s move to Medco, which is based in Ohio, in no way supports the local, or even state, economy.
“We don’t need to send business out of state,” Boyette said.
Tom Thompson, executive director of the Beaufort County Economic Development Commission, said PotashCorp has the right to take whatever measures it sees fit to reduce operating costs.
“But, obviously, I would love to see companies use local vendors when they can,” he said.
Tayloe’s Hospital Pharmacy, as well as other local retail pharmacies, will continue to oppose PBMs, according to Melton and Armstrong.
“We have to fight hard, but we don’t have the money to fight with,” Melton said.
For their part, Melton and Armstrong have sent a letter to PotashCorp requesting to meet with the company’s corporate executives to explore alternatives to Medco’s mail-order service.
After nine months of fighting PBMs and area companies such as PotashCorp that use PBM services, Melton and Armstrong may have found some key allies in Congress.
In early December 2009, Congressman G.K. Butterfield (D-NC) introduced the Patient Health and Real Medication Access Cost Savings Act of 2009. The bill seeks to reduce consumers’ dependence on PBMs for medications, according to a news release from Butterfield’s office.
The final installment of this series will provide information on the Patient Health and Real Medication Access Cost Savings Act of 2009 introduced in Congress by Rep. G.K. Butterfield. It will be published Friday.