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Maine Board Of Pharmacy

"How did we allow PBMs to have the impact they have on our business? They don't make anything; they don't have retail stores. How did we let [PBMs] have that kind of impact? That is my question."

That's what Brooks-Eckerd executive vice president of marketing David Morocco told Drug Store News associate editor Antoinette Alexander for one of the "Man On the Beach" interviews that appeared in the Monday, May 2 issue of Drug Store News Daily edition distributed at the National Association of Chain Drug Stores Annual Meeting. It reminds me of something Walgreens president and chief operating officer Jeff Rein said a few years ago at the NACDS PAC breakfast. Rein asked how the PBM lobby had come to have such a strong voice with payers and policy makers at the expense of retail pharmacy.

These are excellent questions, and the day that this industry and the association that represents its interests began to confront those issues head on was the day it took its first steps toward ensuring its role in the evolving world of pharmaceutical care--the day it came to reclaim its future.

And it's not about PBMs being the source of all evil. Certainly, there is an important role for pharmacy benefit managers-someone needs to administer the benefit. And there is a value in that, particularly as health care becomes more complex with payers needing to find new ways to lessen costs--including the government, which will become the largest single health care payer in the country once the new Medicare Part D benefit goes live in January.

Moreover, the relationship between retail pharmacy and PBMs is not quite so black and white as it once was; it is a line that continues to blur. NACDS is partnered with Express Scripts. CVS' PharmaCare division is the fourth-largest PBM in America with annual sales in excess of $2 billion, a $1 billion mail order business and a patient network numbering more than 30 million lives. Walgreens Health Initiatives also boasts a $1 billion-plus mail order business. Now Rite Aid is moving back into the PBM business, as well. It's not quite so "us versus them" anymore.

And neither is this industry, which is largely the reason why the tables have started to turn. It's why a federal judge in Maine allows that state's PBM financial disclosure law to stand. It's why Blue Cross-Blue Shield of Minnesota completely levels the field between retail and mail for its members.

Because at some point in the last few years, the retailers who really lead this industry began to put aside their competitive issues and stand together. The Tom Ryans, Dave Bernauers, Mary Sammons, Alan Levins, Tony Civellos and Mark Griffins--most assuredly, there are a few names missing here, purely owing to spatial limitations--began to speak with one voice; began asserting their influence on policy advisors and lawmakers.

"Given the greatly increased attention to health care this year in Congress, I think it's vitally important that the voice of pharmacy is heard," Walgreens chairman and chief executive officer Bernauer said in a taped statement during an NACDS Annual Meeting day one business session. "We've got a great story to tell in pharmacy."

It's not entirely clear how it came to be that the PBM industry almost used mail order to hijack the prescription drug business from retail pharmacy. Still, this industry has made huge strides in the last few years. Today, behind the leadership of NACDS president and chief executive officer Craig Fuller and the retail executives that comprise its board, this industry has taken a major step toward reclaiming its future. And while the challenges that faced retail pharmacy yesterday won't exactly go away tomorrow, one thing is for certain: The PBM lobby isn't the only voice being heard these days.

In accepting the NACDS chairman's gavel from Sammons, Civello spoke of the need for the leaders of the industry to stand up for themselves and each other--a challenge to be sure, given the competitive nature of the drug store business and mass retail in general. He talked about the difference between a diverse marketplace and a fractionalized industry. As honorary PAC chairman, he understands the importance of a unified front in retail pharmacy's negotiations with policy makers.

Clearly, the rules of the game have changed from the days when retail pharmacy's current leaders began their careers. And to be sure, many more changes lay ahead. But as long as the retail pharmacy industry continues to speak in unison, it is more likely that the combined strength of its voice will drown out any pretenders' claims to its legacy.

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