XATIONAL COMMUNITY PHARMAC STS ASSOCIATION

NCPA~
April 16, 20 12

John McCarthy Medicaid Director, Ohio Health Plans Ohio Department of Job and Family Services 50 West Town Street, 4th Floor Columbus, Ohio 432 15

RE: NCPA Opposition to Diabetic Supply Competitive Bidding & Mail order
Dear Mr. McCarthy: I am writing today on behalf of the National Community Pharmacists Association (NCPA) to voice our concerns regarding a report developed by the U.S. Department of Health and Human Services (HHS), Office of Inspector General (01G) entitled Ohio Medicaid Cost for Home Bloo~f-Glzicose Strips Cozrl~l Rediced by Approxi~~lcrte(v Pelrent. Tesf he 50 The report concludes that if Ohio establishes a competitive bidding mail order program for diabetic test strips. notable savings will be achieved. NCPA opposes such a program and has serious concerns over its reco~nlnended implementation. Such programs do not always achieve the savings marketed to the state, and in fact can be detrimental to beneficiary health. Nationwide, NCPA represents America's independent community pharmacists, including the owners of more than 23,000 community pharmacies, pharmacy franchises and chains. Together, they employ over 300,000 full-time employees and dispense nearly half of the nation's retail prescription medicines. In Ohio alone, NCPA represents the interests of over 550 community pharmacies that employ an estimated 5,830 residents. The average independent community pharmacy generates $4 million in annual revenue and employs 10.6 full-time individuals. Therefore, Ohio's independent community pharmacies generate $2.2 billion in annual revenue. The viability of these entities should be protected due to the fact that in many regions of Ohio, they may be the sole healthcare provider reasonably accessible to beneficiaries to access vital medications. Tlie face-to-face patient interaction that pharmacists provide to the diabetic population is vital to monitoring this chronic condition and may serve to avert potential complications in these patients. Controlling the overall cost of pharmacy is comprised of four (4) components. The drug price, utilization (includes adherence), drug mix (more generics instead of brands) and drug wastage. Over the last few years, there has been an emphasis on attempting to control the cost of pharmacy benefits by solely focusing on the drug without fully understanding how the drug price impacts the other critical components of the pharmacy benefit spend. For instance, several studies have found that forcing patients to use mail order where there exists a widely held fallacy that drugs prices are lower, can have a negative impact on more impactful and effective savings strategies such as increasing generic utilization and improving patient adherence (using medications as prescribed by doctors). These two components account for ninety-eight percent of available pllarlnacy benefit cost savings. Finally, there is the reality of drug wastage. According to the Centers for Disease Control and Prevention (CDC), 25.8 million people in the U.S. have diabetes. Diabetes medication adherence is a constant challenge for many reasons. Clearly, with the potential of these types of negative outcomes that can increase medical cost including hospitalizations, rehabilitation, emergency room and doctor office visits, the primary emphasis should be on adherence. Driving more diabetics into mail order automatic refill programs to get test strips will decrease the number of opportunities that pharmacists have for face-to-face adherence counseling which is the most effective form of adherence counseling, as well as opportunity to decrease medication waste.
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THE
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Also, altl~ougl~ order providers tout their services as a "cure all" solution to economic concerns; they have not proven mail to be a significant benefit to the Medicaid population. It also removes a patient's access to valuable patientlpharmacist counseling which is extremely important to the diabetic population which requires regular monitoring. Also, the Medicaid population has proven to be a highly mobile population, comlnonly moving to different addresses, making it difficult to utilize a mail order option for their maintenance medication and supply needs. Credible evidence has not been presented that such an approach provides significant value. The above mentioned report cites Indiana as a successf~il model but there have been other states where such models were not implemented due to questionable success and returns. NCPA is sympathetic to the concerns of policy makers attempting to balance state budgets, in Ohio and nationwide. However, we believe that implementing a competitive bidding and mail order program would be counterproductive to the intent of cost savings and detrimental to the viability of independent community pharmacies both as healthcare providers and small business owners. We respectfully request that the proposed program be tabled at this time until better options can be investigated. NCPA welcomes the opportunity to work with the state of Ohio to find cost savings alternatives that we are confident are available to you. If you have any questions or wish to discuss this matter in more detail please feel free to contact me at matt.diloreto@ncpanet.org or 703-600-1223.

Sincerely, Matthew J. DiLoreto Director of State Government Affairs