Pharmacists Provide Deficit-Reduction Solutions for 2013 Federal Budget

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Alexandria, Va. - Jan. 10, 2012

With the fiscal year 2013 federal budget process set to start with the President's budget proposal to Congress in February, the National Community Pharmacists Association (NCPA) has sent a letter offering the White House and lawmakers ideas to cut the deficit without compromising patients' access to their pharmacy of choice or harming local small businesses.

"By adopting these suggestions, we believe that the goals of cutting waste in the various federal health care programs, preserving crucial patient access to care, and fostering the ability of small business community pharmacies to provide such care, can be achieved," NCPA CEO B. Douglas Hoey, RPh, MBA said. "Independent community pharmacies are important providers to federal programs such as Medicare, Medicaid, TRICARE and the Federal Employees Health Benefits Program. Careless program cuts in these areas could hinder patient access, decrease local tax revenue and eliminate jobs in communities across the United States."

NCPA's letter, available in its entirety here, made the following recommendations:

  • Improve utilization of lower-cost generic medications. Generic drugs are one-fifth of the cost of brand-name drugs and about $75 billion worth of brand drug sales are scheduled to go off-patent by 2015. Increasing Medicaid's generic dispensing rate by five percent would reduce federal and state spending by $1.7 billion and $1.2 billion, respectively. Community pharmacists dispensed generics 72 percent of the time in 2010—or about 20 percent more often than mail order facilities, which profit from brand manufacturer rebates and other revenue. The military's TRICARE program mail order provider (Express Scripts) dispenses generics just 51 percent of the time. If TRICARE worked with community pharmacies to match the generic utilization rate of the highest state Medicaid plan (82.7 percent), it would save $9.7 billion over 10 years.
  • Maximize the benefits of patients' prescription drug therapy. Research indicates that as much as $290 billion is spent annually due to improper medication use. Face-to-face medication therapy management (MTM) provided by community pharmacists can greatly reduce those costs and its use in federal programs should be expanded.
  • Improve oversight of pharmacy benefit managers (PBMs) and collect manufacturer rebates and other revenue retained by PBMs. Seniors are paying higher premiums and the government is overpaying Medicare Part D plans due to PBMs' retention of rebates and payments from drug manufacturers, according to the U.S. Department of Health and Human Services (HHS) Office of the Inspector General. NCPA's letter adds that, "Part D PBMs are generating Part D waste for the sake of their own profits and neither the Part D plans nor HHS has the oversight tools necessary to prevent such abuse." Instead, the government should insist on full pass-through of revenues PBMs receive from manufacturers. In the Federal Employees Health Benefits Program (or FEHBP), NCPA's letter asserts that PBM "profit making activities" lead to wasteful spending and that eliminating PBMs from the program will reduce costs and preserve patient access to drugs.
  • Preserve seniors' access to diabetes testing supplies from community pharmacies. To facilitate beneficiary access to diabetes testing supplies, Medicare Part B relies primarily on mail order providers, which utilize "automatic shipping" and other wasteful practices that can leave beneficiaries with excess product and drive up Medicare costs. By contrast, independent community pharmacies provide these supplies only when requested and offer cost-saving, in-person counseling on their proper use. Independent pharmacies should be exempted from Medicare's competitive bidding proposal, which would force these providers out of this field.

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to or read NCPA's blog, The Dose, at

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