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With the majority of Americans now in managed care, and most retail prescriptions now paid by third party benefits managers, community pharmacy is poised on the brink of a new kind of marketplace and healthcare system.
That, at least, is the long view of Larry Kocot, senior vice president of government affairs and general counsel for the National Association of Chain Drug Stores. A veteran of pharmacy's long campaign to influence public policy and improve its standing in the U.S. healthcare system, Kocot joined NACDS four years ago to manage its federal and state government efforts, as well as regulatory and legal issues.
In that role, Kocot has become a visible and articulate point person for the chain drug industry, and an expert on the trends shaping managed care and the delivery of pharmacy services in the United States.
What the industry is going through now, said Kocot, "is probably the last phase of the transition of community pharmacy before we go into a new era."
That new era, he said, will be one of almost universal prescription benefits coverage of Americans by some form of managed care. "Most of our larger chains are probably close to 85 percent managed care contracts and third party payment," Kocot observed. "What's left is 15 percent to 20 percent [cash-paying] patients. It's not a question of whether or not that's going to go third party; I think it's a question of when and how."
As the shift to new payment systems nears completion, chain pharmacy has been forced to adapt by becoming a more cost-effective, information-driven delivery system for pharmaceuticals. At the same time, chain pharmacists must reinvent themselves as patient-care practitioners and more effective communicators involved in their patients' welfare. That, in turn, will make the chain drug industry a more effective partner of managed care.
Meanwhile, however, the industry is caught in the middle. On one side are patients angry about rising drug prices and the higher premiums and co-pays they must pay for their drug benefits. On the other are the payers themselves, who continue to look for ways to squeeze costs out of the healthcare delivery system as they pay more for drugs because of rising sticker prices and increased utilization. Managed care...