This past year was another turbulent one for independent pharmacies.
In 2021, the coronavirus pandemic threw curveball after curveball at already exhausted pharmacy employees. On top of that, pharmacies faced continuing pressure from PBMs and an unfavorable payment model.
As we move into 2022, many pharmacy owners may be wondering if there is any end in sight to the relentless industry challenges.
But there is reason to be optimistic about the future of independent pharmacy. Read on for answers to the five most urgent questions that pharmacists will be facing in the new year.
1. Will PBMs become regulated?
While pharmacy benefit managers will continue to be a hassle for independent pharmacies in 2022, there are some positive signs for the future of PBM regulation.
In 2020, the U.S. Supreme Court’s ruling on Rutledge v. Pharmaceutical Care Management Association held that the state of Arkansas could regulate how PBMs operated, and that opened the floodgates for other states to start regulating PBMs as well.
Over the past year, more than 100 bills have been introduced to weaken the power of PBM, and over a dozen states have passed legislation to create more oversight. Many of the laws being introduced and passed aim to create transparency about how PBMs determine the cost of drugs and use manufacturer rebates.
As states introduce a flurry of regulations, there is also hope for further regulation on the federal level, too. The NCPA recently announced its support for the Drug Price Transparency in Medicaid Act.
The bipartisan bill aims to ban the practice of spread pricing and require PBMs to reimburse pharmacies at a fair rate and add a dispensing fee. Under this law, PBMs would only be able to collect an administrative fee instead of overbilling Medicaid managed care programs and under-reimbursing pharmacies, keeping the difference for themselves.
READ NEXT: This Independent Pharmacy Owner Is Standing Up to PBMs
2. Will DIR fees be eliminated?
DIR fees are most likely here to stay for 2022 — but there is a potential light at the end of the tunnel for their eventual elimination. There is a growing movement from a bipartisan coalition to institute drug pricing reform and put a stop to DIR fees.
This year, the NCPA noted that DIR fees have increased by an unbelievable 91,500 percent between 2010 and 2019, and several community pharmacy groups are currently involved in a federal lawsuit filed against the Department of Health and Human Services to end the current model of DIR fee assessment.
A proposed legislative solution to the problem of DIR fees is the Pharmacy DIR Reform to Reduce Senior Drug Costs Act. This legislation would address clawback fees imposed on pharmacies, reduce beneficiary cost-sharing, and create a new system to reward pharmacies for improving their quality of care.
The terms of the bill currently enjoy broad support from both the public and a bipartisan group of lawmakers, and in 2021, a group of 249 industry organizations wrote a letter advocating for the bill. Versions have been introduced in both the House of Representatives and Senate.
READ NEXT: How to Reduce Pharmacy DIR Fees
3. Will the traditional payment model change?
The Centers for Medicare and Medicaid Services has recently reaffirmed its commitment to value-based payment models for healthcare providers. As such, independent pharmacists can expect the traditional fee-for-service payment model to transition toward a value-based model in 2022.
Value-based payment models can be more profitable for pharmacies, and they typically result in better health outcomes for patients. However, the lack of provider status for pharmacies continues to be a hurdle for practices wishing to take advantage of value-based payment models, and reimbursement for value-based services often relies on coordination with other healthcare providers.
In its 2022 pharmacy forecast, the American Society of Health-System Pharmacists Foundation recommends that pharmacies create a strategic plan to get involved with transitions of care services and offer a medication assistance program.
The ASHP Foundation also recommends, “Pharmacists should collaborate with health plans and state-level healthcare financing agencies to continue establishing value-based care initiatives that include pharmacist-provided comprehensive medication management services.”
Joining a clinically integrated pharmacy network like CPESN, which connects pharmacies and providers to provide enhanced, value-based care, is another option for pharmacies wishing to break out of the traditional third-party system.
READ NEXT: These Networks Break Pharmacies Into the Lucrative Side of Healthcare
4. Will retail pharmacies be the same after Covid?
After two years of pandemic causing upheaval in independent pharmacies across the nation, there is no chance of going back to the old ways of doing business.
Plexiglass shields and social distancing markers will eventually be taken down, but new and expanded services like drive-thru, delivery, and curbside pickup are here to stay. Because of the decreased foot traffic, pharmacies will have to get creative to encourage impulse purchases and increase basket size.
But not all changes brought about by the pandemic are bad news. During this age of uncertainty, pharmacies became an indispensable resource for patients to get vaccinations, point-of-care testing, and other clinical care while their primary providers were closed during lockdown.
Pharmacies can leverage their communities’ newfound awareness of what they have to offer to become a critical healthcare resource in their community. Instead of only being seen as a place that dispenses prescriptions, the pandemic allowed independent pharmacies to evolve and independent pharmacists to practice at the top of their licenses.
READ NEXT: How Will COVID-19 Change the Future of Retail Pharmacy?
5. Will independent pharmacies survive?
The influence of PBMs and the continuing threat of DIR fees loom large over independent pharmacies, but there are some positive signs for the future of community pharmacy.
The most recent NCPA Digest showed that pharmacy finances actually improved this year after years of decline. Pharmacies dispensed more prescriptions per location, saw an increase in average sales, and had profit margins remain steady.
In a report last month, the Washington Post identified a trend of independent pharmacies moving back into small towns after bigger chains leave, allowing independents to re-establish themselves as a community resource.
Management consulting firm McKinsey also sees a bright future for pharmacies who pivot to care for two types of patients: those with chronic conditions, and those who value convenience.
Although external forces affect the viability of pharmacy, the question of survival will come down to individual choices of pharmacies in the key areas you can actually control:
If you keep your costs low and focus on diversifying revenue with lucrative services, you’re well on your way to a profitable year.
READ NEXT: The Real Reason Pharmacy Profit Margins Are Declining
A Member-Owned Company Serving Independent Pharmacies
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