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PCS PLANS PHARMACIST “DEMONSTRATION PROJECTS” TO SHOW VALUE OF COGNITIVE SERVICES; “MANAGED CARE NETWORKS” FORMATION URGED BY PCS CEO JOHNSON

Executive Summary

PCS Health Systems will lead a series of pharmacy demonstration projects aimed at documenting the cost efficiency of cognitive services provided by pharmacists, PCS President Robert Johnson told the American Pharmaceutical Association's 140th annual meeting in Dallas March 21. "It is...our intent," Johnson said, "to undertake demonstration projects, hopefully with the support of our clients and the profession, to endeavor to establish the value of the pharmacist's clinical services" such as counseling, enhanced patient compliance and therapeutic substitution. Johnson called the projects "an opportunity through a consortium of health care buyers, concerned manufacturers and professional leaders, to demonstrate the value of a significantly different role for pharmacists in the rapidly changing [drug] delivery system." "Keep in mind, cost-reduction is what is on everyone's mind," Johnson told APhA, adding: "If compensation addresses how cost efficiencies can be achieved through pharmacist intervention, there will be a much better chance" that third-party payors will pay pharmacists for their cognitive services. Because drug manufacturers may be required to guarantee the efficacy of their products to obtain a listing on drug plan formularies, Johnson argued that "it would behoove manufacturers to compensate pharmacists to monitor patients for compliance, in order to determine the real effectiveness of their products." "There is no future for pharmacy if it is based primarily...on the repackaging and distribution of the product," Johnson said. He concluded that "the health system today will not...pay the price for highly skilled and educated persons to dispense drugs," but "the system will pay for the appropriate selection and use of these drugs and it is that responsibility upon which the future of this profession must be built and built quickly." Johnson, a former APhA president and exec VP at the California Pharmacists Association for 21 years before joining the McKesson prescription drug benefit program subsidiary PCS in 1990, received the Remington Honor Medal, the premier honor bestowed by APhA, for strong leadership and life-long dedication to pharmacy. The award cited Johnson for his role in building managed care pharmacy relationships. The PCS exec also advised independent pharmacies and small-to- medium-sized chains to align themselves in "managed care networks" that would "accept performance standards based on cost-saving techniques" such as increased generic usage, formulary utilization and evaluation of therapeutic appropriateness by pharmacists. PCS "will seek to include, whenever possible, pharmacy networks consisting of those committed to performance standards that will result in cost-effective health care," Johnson said. These networks are needed because "at this particular time, price or cost is all that is of concern to the large buyers," a situation which necessitates "very competitive price negotiations...between managed care networks of pharmacists and plan administrators." Johnson warned that "unless pharmacy keeps its foot in the door by forming networks and negotiating competitively, there will never be the opportunity to seek compensation for the value-added services" provided by pharmacists. TX Pharmacy buying groups historically have had difficulty obtaining recognition as a separate class of trade by drug manufacturers. In a policy paper submitted to the Clinton Administration in December, the National Association of Retail Druggists listed "multi-tier pricing" by the drug industry and "refusal by pharmaceutical manufacturers" to recognize economies of scale offered by pharmacy buying groups as "anticompetitive barriers" in retail pharmacy ("The Pink Sheet" Dec. 21, 1992, T&G- 21).

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