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Executive Summary

MAIL-ORDER PHARMACY CONTRACTS LEAD TO LOSS OF CONTROL by doctors and managed care organizations over their patients' therapies, National Pharmaceutical Council President Mark Knowles maintained at an April 10 session of the American Medical Care and Review Association's annual health care policy conference in Washington. "If you are considering a mail-order option, I believe you should be concerned about loss of control," Knowles said. Mail-service pharmacy often involves "higher quantity dispensing, stockpiling, wastage of medicines not used by patients because of damage, loss, loss [due to improper storage] that must be replaced by other medications at extra expense, and problems with patients not returning to their primary MD on schedule," he contended. "All these scenarios lead to higher overall costs." Savings provided by mail-order pharmacies are produced by volume purchases of and emphasis on generic dispensing, as well as efficiencies involved in automated operations and bulk and ready-filled prescription orders. NPC comprises 30 major brandname pharmaceutical manufacturers, Knowles noted. Knowles contended that any "price advantage of mail order is more perceived than real." He cited "a pair of studies conducted in 1986 and 1987, [which] found that in a 180-day period mail-order plans dispense 9% more medicines. This excess offset a 4% lower ingredient cost. Thus, such a plan costs the sponsor 5% more than traditional dispensing." NPC also urged that managed care groups avoid formularies. Knowles argued that formularies and other cost-containment measures that restrict patient access to pharmaceuticals can lead to noncompliance and thus to higher costs of subsequent therapies. By restricting access to therapy, "higher copays and prescription limits could lead the patient to the point of not filling or taking their medicines and therefore receiving no treatment, wasting the dollars spent on diagnoses and perhaps requiring treatment or hospitalization for more severe complications," Knowles said. "I urge you [not to] put roadblocks in the way of treatment. Instead, I encourage you to look at the cost savings and improved health of your enrollees as you develop educational programs which promote proper prescription compliance." Asked about direct-to-consumer advertising, Knowles commented that "at this point in time the pharmaceutical industry per se is not in support of direct-to-the-patient advertising." One reason, he said, is that such promotion would place "an unconscionable burden upon the physician" and lead to "the alienation of the medical community." The industry believes "that the responsibility for determining which medicines are right for the patient resides with the MD. I don't see that changing in the foreseeable future." Ads for Rogaine, Seldane, Retin-A indicate "a movement in that direction" of consumer advertising, Knowles acknowledged. Such advertising "has a good side and a bad side: it's going to bring patients into the doctor's office who might not be there ordinarily, and it's also going to upset the doctor a little bit" because of patient "pressure" for the products. The audience questioner disagreed about the good side: "It's not going to bring anybody new" into the physician's office; patients "always bring [the ads] up as an afterthought."

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