Military cutting costs via Rx negotiations; NACDS hails finding as pharmacy victory

ALEXANDRIA, Va. Vindicating claims made over the last two years or more by the National Association of Chain Drug Stores and other pharmacy groups, the Department of Defense revealed that allowing the military to negotiate with drug manufacturers for lower prices on retail prescriptions is saving taxpayers big sums of money.

NACDS president and CEO Steven Anderson Thursday hailed the findings as a victory for community pharmacies — and for freedom of choice for military members and their families.

The Defense Department revealed that it will spend an estimated $1.67 billion less on prescription drug medications in the 2010 fiscal year than previously projected. Behind the cost savings: a change in the way the agency obtains drug supplies for prescriptions sold in community pharmacies to beneficiaries enrolled in the TRICARE military health program. That change became effective with the release of new DoD regulations in March that allow the military to obtain pricing discounts for prescriptions sold at retail.

Those discounts, generated through direct negotiations between federal procurement officials and pharmaceutical companies, are clearly lowering the costs for the TRICARE program — and for the military beneficiaries who fill prescriptions in local community pharmacies.

“This is a true victory for military service members and their families,” Anderson said. “A rule implemented earlier this year enabled the Department of Defense to obtain pricing discounts for retail prescription medications,” he added. “Those discounts will result in remarkable savings for the Department, which translates to pharmacy choice for TRICARE beneficiaries. Military families will maintain the option to obtain their prescriptions and other pharmacy services from a retail pharmacy.

Anderson cited “an ongoing, multi-year effort” by NACDS to preserve freedom of choice for military beneficiaries, and to prevent the government from discouraging those beneficiaries — via higher out-of-pocket costs — from obtaining their prescriptions at a retail pharmacy rather than through a mail order pharmacy or military base pharmacy. The pricing discounts had long been sought by the retail pharmacy industry as a way to level the playing field between retail and mail order pharmacies serving the more than 9 million military health beneficiaries enrolled in the federal program. Historically, retail pharmacies have operated at a competitive disadvantage vis-a-vis mail-order and military-base pharmacies, because prescription costs were higher for military members and their families if they chose to fill their scripts in a community pharmacy setting.

“The value of a pharmacist in counseling on adhering to medication regimens, preventing possible drug interactions and improving health outcomes is invaluable to all patients, and should not be limited for the brave men and women and their families who serve and sacrifice,” Anderson asserted.