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Part D’s failure is good news for pharmacies

I noted a couple weeks ago the problems pharmacies in Texas have been encountering with Part D – slow pays, no pays, missing information, higher staffing costs, and the like. Now word comes that California pharmacies seem to be suffering the same side effects of Part D.
The news comes from the Sacramento Bee (free registration required), and was triggered by reports of a home-delivery pharmacy shutting its doors, at least in part due to payment problems associated with Part D. According to the Bee;
“In a CPA (California Pharmacy Association) survey about Medicare Part D, 55.8 percent of independent pharmacies said the drug program’s timing of payments has created a “significant negative financial impact” on their business.”
Ohio pharmacies, especially the independents, are also experiencing financial troubles they attribute largely to Part D. While many of these issues were recognized early this year, the financial impacts are only now really starting to be felt.
The independents don’t have large chains’ financial backing nor buying power; this will make it very difficult for those in anything less than excellent financial shape to survive while Part D is sorted out. As independents account for 43% of all pharmacies, this is no small issue.
The good news is few eligible seniors have signed up for Part D. This presents us with an interesting picture – the success of a program designed to get more drugs to more people may well have killed off many independent pharmacies.
Only in Washington could they have come up with something so creatively destructive.

3 thoughts on “Part D’s failure is good news for pharmacies”

  1. Joe,
    These developments are truly awful, for both patients and the small businesspeople who run independent pharmacies.
    I think it’s fair to point out, though, that Washington had very little to do with the writing of the legislation that gave us Part D. The legislation was written by Big Pharma and the insurance companies, and only rubber-stamped by a compliant Congress which avoided dissent through nefarious means. Perhaps it’s more appropriate to say that Northern New Jersey created this fiasco.
    I heard Robert Hayes of the Medicare Rights Center speak recently and he said Part D should not even be called a Medicare drug benefit at all, but simply a government subsidized new cottage drug industry (and, I might add, to which the “brand” Medicare was “licensed”).
    Medicare has a history of generally being efficient, reliable and secure. It would be nice if Part D could live up to that, but that appears less likely all the time. If it were up to me, the government would take the name back from the insurers and the PBMs.

  2. Joe, I am certainly a cynic when it comes to government health insurance programs and I have many concerns about the success of part D.
    Having said that, you seem to be taking just a little too much delight it is shortcomings and early difficulties.
    Perhaps a little breathing room is in order here?

  3. Richard – Don’t confuse an attempt to inject humor, readability, and opinion with delighting in this debacle.
    I am well and truly pissed. Unlike Medicare, which works reasonably well, this is a mess.
    These people are wasting my money and yours, killing off a critical industry, screwing up the health care of millions of people, and benefiting a relative few.
    This is such a lousy program in so many dimensions that I’m hard pressed to find anything positive to say about it.
    Now if I owned Merck stock…

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Joe Paduda is the principal of Health Strategy Associates




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