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NARD NATIONAL PSAO PREPARING FOR JULY LAUNCH

Executive Summary

NARD NATIONAL PSAO PREPARING FOR JULY LAUNCH, Max Richburg, chief executive officer of "The Prescription Network (RxNet), Inc." told a May 18-20 meeting in Kansas City, Missouri. RxNet is a separate, for-profit subsidiary of NARD (the National Assn. of Retail Druggists'). Initial activities include contacting PSAOs (pharmacy services administrative organizations) and pharmacies and will begin "this summer, probably in July," said Richburg. RxNet was conceived in December 1985 by NARD's executive Board. The objective is to provide independent pharmacists a way to organize and increase their share of third party prescription drug business. "The most important action independent retail pharmacists can take at this time is to decide to participate in The Prescription Network," said Richburg. "It is important that RxNet achieve the greatest market penetration possible in establishing this nationwide network of participating pharmacies, and that it achieve that penetration as soon as possible." The two-fold mission of RxNet is "to create a nationwide network of participating independent pharmacies [and] . . . to market this network and its services to the purchasers of prescription drug benefit programs such as HMOs, PPOs, employers, and unions." Richburg maintains that RxNet marks the "first time independent retail pharmacy has been marketed nationwide." Multi-state PSAOs already exist; RxNet is aiming to be a national operation. "Quite simply," stated Richburg, "RxNet will market RxNet services to those firms and others desiring to provide beneficiaries with prescription drug services where those beneficiaries are located in multiple states an where those firms desire the convenience of doing business with a single administrative source to manage the benefit program for those beneficiaries." RxNET will provide marketing services to PSAOs on local, state and regional levels. The draft inter-PSAO cooperative agreement guidelines, presented at the PSAO meeting, emphasize NARD's interest in generating a network for pharmacies. "As RxNet becomes aware of firms desiring to do business with local PSAOs rather than with a nationwide network, RxNet will inform those firms of appropriate PSAOs to be contacted. We want independents to get the business through whatever type PSAO the buyer wishes to contract," maintained Richburg. Furthermore, Richburg described an information forwarding service to notify firms about local PSAOs. For example, Richburg said, "RxNet envisions that PSAOs will sign contracts with firms within their market. These firms may desire that other plant locations . . . also be made aware of and otherwise do business similarly with other local PSAOs." Richburg also noted that in instances where firms with beneficiaries in multiple states wish to contract with local pharmacies, "RxNet will suggest that these firms do business with local PSAOs and will provide these firms with the appropriate contact person." Patient drug use profiles must be kept by pharmacies participating in RxNet, according to the draft conditions for participation. In addition, "each participating pharmacy must provide, upon request, a copy of the patient drug use profile to each prescription drug plan beneficiary." Other conditions for participation include hours for pharmacy operation and emergency services. Each participating pharmacy must be open to the public at least eight hours a day, five days a week. Pharmacies also must provide prescription drug program beneficiaries with round-the-clock emergency services seven days a week. In addition, each participating pharmacy must either employ an associate member or an active member of NARD. Stores must display an RxNet logo, identifying the store as a participating pharmacy. Also, each participating pharmacy must collect the full amount of any copayment which any payor requires in a contract with RxNet. The enrollment fee schedule offers an incentive for early participation. The "primary" enrollment fee, charged during the first three months of marketing RxNet, is $25. The fee for enrollment during the next nine months is $100, and the charge will be $250 after the first year.

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