Financial Strain Leads to Pharmacy Closures, and That Leads to Medication Nonadherence

Wednesday, May 8, 2019
Author: 

Marsha K. Millonig, MBA, BPharm

In a blog earlier this year, I discussed the Center for Medicare and Medicaid Services (CMS) Office of the Actuary’s estimates that national health expenditures may reach $6 trillion in the next 8 years, which would equate to health expenses reaching 19.4 percent of Gross Domestic Product (GDP). The move of Baby Boomers into Medicare and an increase in medical goods and services prices are key factors in this estimate. Of significant concern to me is that medication-related problems –  including nonadherence to medication regimens and non-optimized medication therapy – may amount to as much as $672 billion of these costs.

Pharmacists have an important role to play in addressing medication use by providing comprehensive medication management services. Yet, increasingly, policies employed by the nation’s prescription benefit managers (PBMs) are putting strain on pharmacies around the country, and a new study has shown that patients’ adherence to their medications decreases when pharmacies close.

Pharmacies’ Link to Adherence

In the study, published April 5 in the Journal of the American Medical Association (JAMA), the authors conclude that pharmacy closures led to a significant drop in adherence to essential cardiovascular medications among older adults in the U.S., and it persisted for a full year of follow-up. How significant? Rates of nonadherence were nearly 6 percent for patients taking statins and over 5 percent for those taking beta-blockers and anticoagulants among patients at all pharmacies. The decline in adherence was even more pronounced for patients using independent pharmacies, rising to nearly 8 percent.

The retrospective cohort study included 3.1 million men and women age 50 and older who were prescribed statins, β-blockers, or oral anticoagulants. Researchers found no differences in monthly adherence between the cohorts until pharmacy closures impacted 3% of the study population.

In the majority of cases, medication adherence declines reflected a complete discontinuation of medicine rather than worsening or partial adherence. The authors note, “Declines in adherence were most pronounced among older adults using independent pharmacies, purchasing from a single store to fill all their prescriptions, or living in low-access neighborhoods with fewer pharmacies, and were consistent across several classes of cardiovascular medications.” They conclude that, “Efforts aimed at reducing barriers to prescription medication adherence should consider the role of pharmacy closures, especially in patients at highest risk.”

Doug Hoey, CEO of the National Community Pharmacy Association, said in a recent newsletter that the impact of this finding is, “a big deal.” He notes that the CDC Foundation says cardiovascular disease is the No. 1 cause of death in the U.S. and results in healthcare costs of $1 billion each day. That makes the outcomes of this recent JAMA study a very big deal, indeed.

Nonadherence to cardiovascular medications leads to more people dying and higher costs. In the JAMA study, 46.7 percent of the patients were covered by either Medicare (43.4 percent) or Medicaid, so declines in adherence not only have an impact on those patients’ health, but a detrimental impact on taxpayer dollars used to subsidize those programs as well.

Many in the retail pharmacy industry point to difficult PBM policies as a reason for financial strain that can contribute to pharmacy closures. These include:

  • Preferred pharmacy networks
  • Uneven application of quality measures and performance metrics in direct and indirect remuneration (DIR) fees under the Medicare Part D plan
  • Gag clauses” and other drug price controlling tactics
  • Steering beneficiaries to mail order, specialty and other pharmacies in which PBMs have an ownership interest

High Cost of Doing Business

In his newsletter, Doug Hoey remarks: “Medication affordability is often the first place people go to try to solve nonadherence.” Yet, in the JAMA study, 59 percent of the copay amounts were under $5, and 75 percent were under $10.

Hoey said the study cited value-based insurance plan designs with low patient cost sharing increasing adherence by 5 percent to 6 percent, whereas preferred network plans only increase adherence by 1 percent to 2 percent. When patients are encouraged by their plan to move to retail and mail order pharmacies owned by their PBMs, it can lead to retail pharmacy closures, Hoey asserts, citing 3,622 stores shuttering between 2011 and 2016. “Many assume those closures were limited to independent pharmacies, and 42 percent of them were,” he says, “however, big-box and grocery store drug stores were also affected. In the last 12 to 18 months, Walgreens closed 750 of the Rite Aid stores it purchased. Fred’s will close 159 stores by next month. Shopko auctioned its 146 pharmacies. Kmarts continue to close. Regional chains in Missouri and Ohio were sold to CVS, which then closed most of those locations. Those are just some of the notable recent market exits.”

The preferential practices that many believe are contributing to these closures are being addressed around the country by state legislators based on growing media reports regarding these parts of healthcare system that are unregulated or underregulated and unlicensed. Prescription Drug Benefit manager reform is spreading across states and is also being addressed as part of the Trump administration’s 2018 blueprint for lowering drug pricing.

And these efforts cannot come too soon for struggling stores. Some pharmacies have seen their retroactive DIR fees climb through the roof, and correcting these ills is a significant part of the National Association of Chain Drug Stores (NACDS) Campaign for Change highlighted at its recent Annual Meeting in Palm Beach, FL. Mark Panzer, NACDS chairman and Albertsons senior vice president of pharmacy, health and wellness, along with NACDS president and CEO Steve Anderson, said that achieving results on relief from DIR fees; fair pharmacy reimbursement; opioid-abuse prevention; and enhancing pharmacies’ scope of business are the four most crucial issues part of that campaign.

NCPA and NACDS have both worked to educate the current administration on issues affecting pharmacies and pharmacists and believe they are seeing results. Recent exposes on the problems of healthcare “middlemen” have prompted action, including the state of Ohio firing its PBM in the last year and West Virginia carving out and managing its own drug benefit with millions in savings.

Policy to Support Medication Adherence

The JAMA researchers discuss several suggestions to address the decline in adherence related to pharmacy closures including:

  • Policies that ensure sufficient pharmacy reimbursement for prescription medications
  • CMS mandating minimum standards for pharmacy reimbursements
  • Conversion by health plans to an open pharmacy network

With several weeks to go in many state legislative sessions, I look forward to seeing how much progress is made to address the important issues of unregulated reimbursement practices, pharmacy closures, and access impacting medication adherence.

Marsha K. Millonig, MBA, BPharm, is president and CEO of Catalyst Enterprises, LLC, and an Associate Fellow at the University of Minnesota College of Pharmacy’s Center for Leading Healthcare Change.

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