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Legislative Update: Mail-Order vs. Community Pharmacies

By: Mahdieh Danesh Yazdi

Once again, Albany is in the setting of a fierce debate on pharmacy. On June 15th, 2011, the New York State Assembly passed Bill 5502, which would forbid insurance companies from mandating the use of mail-order pharmacies for patients under their medication plan. Bill 5502 specifically mandates that medication plans cover prescriptions filled at a community pharmacy at a cost equal to prescriptions filled at a mail-order pharmacy. They are instructed to stop charging extra fees to costumers for using community pharmacies, as long as the community pharmacy charges a price “comparable” to that of a mail-order pharmacy for the medications. The New York State Senate has also passed the bill. It will now have to be signed into law by Governor Andrew Cuomo in order to go into effect. Governor Cuomo has not yet announced a position on the bill; instead, he is waiting until the bill reaches his desk to comment on the issue. Proponents and opponents are lobbying fiercely to make their perspectives heard by the governor.

The bill is strongly supported by the National Community Pharmacists Association (NCPA), which wrote a letter encouraging the governor to sign it once it reaches his desk. The NCPA argues that community pharmacies are more accessible to patients and that if patients had a choice, most would prefer to use a community pharmacy as opposed to a mail-order pharmacy. They also point out the importance of pharmacists and their accessibility in a local setting. Pharmacists are allowed to provide the extra face-to-face care that may be advisable in certain patient populations that are more prone to medication errors (e.g. the elderly).

Many, however, oppose the bill on grounds of concern for consumers. The main argument against the bill is that it would raise costs for patients. This was recently confirmed by the Federal Trade Commission (FTC); it predicted that enactment of the bill would, in fact, reduce competitiveness among pharmacies to keep their prices low. Also, many mail-order pharmacies only offer competitive prices if they meet a certain volume. By providing patients the option to fill their medications at community pharmacies, these quotas may not be met. Mail-order pharmacies will then be forced to raise their prices to compensate for the lost business. Filling a prescription is much cheaper at a mail-order pharmacy than a community pharmacy, adding to the cost-saving measure. From a more clinical perspective, opponents to the bill also argue that adherence rates have been better with mail-order pharmacies. In an article published in the American Journal of Managed Care, patients were 25% more likely to fill their prescriptions and 6% more likely to take them as directed when they used a mail-order pharmacy.

Both, proponents and opponents of this bill, make important arguments that we should take into consideration. Community pharmacies, particularly independent community pharmacies, have been struggling in recent years. Insurance policies that mandate the use of mail-order pharmacies siphon the much-needed revenue stream from community pharmacies. This is particularly true when mail-orders are mandated for the purchase of maintenance medications, as these are the main sources of revenue for community pharmacies. However, consumer welfare is a very important consideration. If patients cannot afford to pay for their medications, it is detrimental to both, pharmacies and patients.

The coming weeks will reveal more about whether the Assembly will pass the final version of the bill and whether Governor Cuomo will sign it into law.

Feel free to send in your opinions on the issue.

Published by Rho Chi Post
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