If it’s broken, take a stand and fix it

FROM APhA HEADQUARTERS

Antonio Ciaccia is chief strategy officer of 3 Axis Advisors and senior advisor for Disruptive Innovation and Practice Transformation at APhA.

Growing up in a pharmacy household, I had a front-row seat watching my dad provide valuable services and care to patients. While he was a health-system pharmacist primarily, he also picked up shifts at a local independent and a regional grocer located throughout Cleveland, OH. But what interested me most about what he did were the late-night phone calls with sick friends and family members, explaining medications they had never heard of, walking them through adverse effect profiles, warning them of contraindications, and sometimes, helping them to be better advocates for themselves with their physicians.

While many view pharmacy primarily through the lens of dispensing, that was not the pharmacy that I was raised on. To me, a pharmacist has always been a medication expert who has the skills and expertise to manage chronic conditions and guide patients to their therapy goals. However, when I started working as a pharmacy technician in high school, I saw the real pharmacy experience: fast-paced, hectic, administratively obnoxious, with opaque pricing and an excessive focus on volume and commodities.

Pharmacy's growing problems

Within 2 years of starting the prepharmacy curriculum at The Ohio State University, I had seen enough, and I bailed to focus on public policy and journalism. But the pharmacy itch never went away. About 2 years after graduating from college, I returned to pharmacy in a role with the Ohio Pharmacists Association (OPA) and eventually, as head of OPA's government affairs division.

It was at OPA that the realities of the pharmacy marketplace—and the growing problems within it—became more readily apparent. Pharmacists were doing more and more work with fewer resources. Intermediaries known as pharmacy benefit managers (PBMs) were arbitrarily undercutting pharmacies on reimbursements and forcing patients to use pharmacies owned by the PBM. Pharmacies were closing left and right, and medication prices as well as the overall cost of care were rising. This was not a profession in a need of a few tweaks—it needed an overhaul.

Working with an amazing group of volunteers, staff, and lawmakers, OPA was able to broadly expand pharmacist scope of practice and pass nationally heralded PBM reform laws, but surprisingly, not much actually changed in the pharmacy marketplace. Many pharmacies weren’t integrating the new services they were allowed to provide. PBMs were skirting the laws and exacerbating pricing dysfunction. All the while, more pharmacies kept closing and pharmacist workloads got even worse.

Then in 2016, PBMs started hammering pharmacy reimbursements even more in the Medicaid program, with cuts that equated to 60%–80% of pharmacies’ gross margins and sent the entire pharmacy marketplace in Ohio into a major tailspin. Most disturbing was that as pharmacies reimbursements plummeted, the state was being charged more and more for prescriptions.

Out with the old, in with the new

It was clear that the old way of doing business was not going to cut it any longer. We had to start making fundamental changes to the mechanics of pharmacy practice before its PBM-controlled autopilot took it—and the people paying the bill—right off the cliff.

To clear the fog coming from the PBMs, who were erroneously claiming that their “tools” were saving the state millions, we began to seek out publicly available data sets from CMS that provided insights on how much pharmacies paid to acquire medications and how much Medicaid programs paid to buy those medications from pharmacies. When combining these previously overlooked data sets, we discovered a growing gap between the actual prices of medications versus the prices charged by PBMs for those same medications.

The charts highlighting the disconnect turned the existing smoke around PBMs into an inferno, and we turned to local journalists at the Columbus Dispatch to expose the problem. With the wave of scrutiny from media and lawmakers, the state then decided to bust open the books, and voila—they found PBMs up-charging the state to the tune of $244 million in hidden spread pricing in just 1 year of the Medicaid managed care program.

As the legislative fury rained down, OPA worked to end the waste and preserve access to local pharmacies. Rather than using the newfound attention on the often-overlooked pharmacy marketplace to simply pay pharmacies more money with the same old methodology, we knew that the old way of paying for pharmacy wasn’t going to solve the challenges of overworked and overloaded pharmacies; it wasn’t going to solve the issues of PBMs picking winners and losers; and it wasn’t going to prioritize funds in the direction of underserved communities.

So instead of dumping more money into the old system, we worked with state officials to redesign the payment model.

Rather than just raising dispensing fees across the board, Ohio prioritized increased funds to high-Medicaid pharmacies (and lesser amounts to pharmacies in low-Medicaid areas). Rather than allowing PBMs to continue to set subjective reimbursements, the state is in the process of implementing benchmark pricing based on surveys of real pharmacy acquisition costs. And OPA fought for the state and managed care plans to invest in new clinical services through Ohio’s newly passed provider status law, rather than solely paying more for dispensing.

While Ohio is not perfect, and there’s much more work to be done, the key takeaway is that we all know that the pharmacy payment model is fundamentally broken. It will take fundamental changes to pharmacy’s engagement strategies to attain the fundamental reforms the profession needs.

In my advisory role at APhA, we are working to bring this level of disruption and realignment to states across the country and to our federal programs like Medicare, as well.

It's up to you

The lesson here is to use your career as a mechanism to bring about positive change. If legacy treatments aren’t working for your patients, push back on prescribers to fix them. Or better yet, get a collaborative agreement and do it yourself. If your practice environment isn’t conducive to your or your patients' success, don’t wait for manager approval; just change it. If you find PBMs or other outside vendors are working to undermine the health care system, expose it.

If you see something, say something.

Bad, broken systems thrive on apathy and inaction. As recent events both inside and outside pharmacy have taught us, it’s on each of us to call out what’s wrong, break patterns of dysfunction, and fix the problem.