Posts Tagged: COVID-19

Pharmacy Business on Thin Margins, Suffers More During Pandemic

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pharmacy business

Is it hard to have a successful, independent pharmacy business? The answer is complicated, but pharmacies were already seeing lots of closures. Those thin margins weren’t sustainable in good times. Then the pandemic hit, so what’s the aftermath?

16% of Rural, Independent Pharmacies Closed

According to the Rural Policy Research Institute, 16% or 1,231 independent rural pharmacies closed between 2003 and 2018. These closures created pharmacy deserts, areas in the U.S. where patients have little access to get their medications. That’s one piece of the health inequity ecosystem. Without access, the challenges for population health mount.

Independent Pharmacies Dip Below 20,000

In 2020, the number of independent pharmacies operating in rural and urban areas dipped below 20,000. That’s the first time this has happened. That’s concerning, not just for the possible lack of access for patients, but it’s troubling for pharmacist-owners. Pharmacists typically own independent pharmacies. They are in the dual role of provider and businessperson. Their pharmacies are often a part of the community and are many times the connection for its citizens to health literacy. 

Prescriptions and Pharmacy Purchases Shrank in 2020

Another issue for pharmacies is that there were fewer prescriptions in 2020. Many were hesitant to go to the doctor unless it was an emergency. Further, many lost their jobs and health insurance, so they couldn’t afford their medications. With fewer visits to the pharmacy and less expendable income, pharmacies weren’t generating any additional revenue. 

PBMs Cut into Margins, Too

PBMs (pharmacy benefit managers) align mostly with chain pharmacies. That left independents at a major disadvantage. PBMs control the prescription drug reimbursements for health plans. If your pharmacy is unaffiliated, your margins take additional hits.

COVID-19 Testing and Vaccines Help Revenue Some

Pharmacies have been front and center during the pandemic. They’ve served as test sites and vaccine providers. While they are earning some revenue from this, there was no windfall. Plus, many pharmacies had to deal with costs around logistics. 

However, patients trust their local pharmacy, often more than “big” healthcare. That trust does provide a lifeline to the community around vaccines. That may be one area where they are excelling versus chains or mass inoculation sites.

What’s the Future for the Pharmacy Business?

The consequences of the pandemic will continue to impact all aspects of healthcare. Rural hospitals are struggling, too, and a disjointed healthcare system became more evident during COVID-19. The future is uncertain. Politicians, regulators, and industry stakeholders will be battling it out for some time. 

What doesn’t change is the need for the independent pharmacy. It’s a beacon for the community. Survival will depend on adaptation, using technology, and other opportunities to reduce costs. Some will falter, and that’s a loss for the business owner and those they serve. It’s a stark reminder that healthcare in the U.S. is not equitable. Until we fix that, it will remain an unhealthy ecosystem. 

The Pandemic and Prescription Drug Spending

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prescription drug spending

ASHP (American Society of Health-System Pharmacists) released a new report regarding the pandemic’s influence over prescription drug spending. While spend did grow at a moderate rate, analysts attribute the growth to increased usage. The shifts and changes the healthcare system experienced over the last year caused these shifts. They will continue to do so as the pandemic continues and the delivery of care evolves. 

A Look at the Numbers

Prescription drug spending rose 4.9% in 2020, reaching $553.3 billion. Of that, 2.9% was due to greater utilization. New drug spending added in 1.8%, while price changes accounted for a mere .3%. 

That’s the overall number, but there are other trend insights by type uncovered in the report, such as:

  • Nonfederal hospitals spent 4.6% less: There was a spike in March 2020, then 19 weeks of decreases before a rebound. 
  • Home health increased its spend by 13%: Home health services grew tremendously during the pandemic. 

Pandemic Effects Will Linger in 2021

The lead author of the report, Eric Tichy, PharmD, MBA, believes that effects from COVID-19 will persist. This will impact drug spending this year and next. Tichy urges hospital and health-system pharmacists to prepare for further consequences, such as the commercial availability of new high-cost drugs and changes in site of care. 

With vaccines prevalent, hospital pharmacies can also expect to see a revitalization of acute care services. Preventive care, screenings, and elective procedures took a nosedive in 2020. With utilization expected to rise, hospital pharmacies will see a rebound in drug expenditures. 

New Drug Approvals Will Also Impact Market

There are other factors influencing cost beyond the pandemic. The report also suggests that biosimilars will be a big driver of prescription spending for 2021 and beyond. The industry expects approvals for new drugs in this category. 

There is also a healthy pipeline of drugs for cancer treatment, rare diseases, and other specialties. The FDA should be providing approvals for these this year. Specialty drugs have been fueling increased expenditures for several years, compared to other classifications. 

Read the Complete Report

You can read the complete report, National Trends in Prescription Drug Expenditures and Projections for 2021. The report’s predictions include an expectation that overall spend will increase 4-6%. For clinics and hospitals, they forecast 7-9% and 3-5%, respectively. 

Immunization Interoperability: Barriers, Challenges, and Opportunities

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immunization interoperability

The U.S. and the entire world are in the middle of the most extensive mass vaccination effort ever. The pandemic and inoculation are also creating lots of data. That’s data that needs to be shareable and exchangeable. In other words, immunization interoperability is paramount right now. The problem is that healthcare interoperability, in general, has a myriad of challenges and barriers.

The U.S. healthcare system is not a national one. That’s a big part of the problem. There’s no consistency around data or how to share it. Additionally, providers all use different EHRs, some that can exchange information easily and others that cannot.

Immunization interoperability issues aren’t new. The pandemic just shined a brighter light on them, like with so many others.

The U.S. Has 61 Immunization Information Systems

Did you know that the U.S. and its territories have 61 independent immunization information systems (IIS)? These align with different city and state health departments, and the CDC has governance. 

In 1998, there was a movement toward a national immunization registry, but it failed to gain traction. Instead, the IIS were established. While they do follow national standards, the operation is at the city and state level. Further, states also dictated immunization requirements for their citizens. 

How Immunization Interoperability Works Now

While it would seem that data is living in silos, there are current processes in place. Providers enter immunization information of patients into their EHR and send it to the IIS. In turn, some public health programs can access the information. IIS also sends information back to the EHR to support forecasts. 

Unfortunately, due to the lack of standardization around healthcare interoperability and data, it’s not effective across the board. 

The data exchange becomes complicated because there are inconsistencies in data formats, standards, and access. Different types of providers perform inoculations, such as primary care physicians, pharmacists, and hospital clinicians. 

What’s the Answer for Immunization Interoperability?

There’s no one answer or one pathway. Immunizations are just one small part of the bigger picture of healthcare interoperability. We’re just all more aware of immunizations right now and the discussions around digital vaccine cards or some other method of tracking and validating vaccines. 

Standardization of data formats is necessary, so that requires agreement with regulatory bodies and EHR companies. Simplifying the IIS seems like a smart option, as well. But, should there be only one? That’s probably not going to happen, just like there’s not a national patient identifier. The U.S. doesn’t have a national healthcare system. Each state has different laws and rules, and healthcare is, in most cases, a private business.

Investment in public health technology infrastructure is another must-have. The CDC is on board with this with its Data Modernization Initiative.

Data Must Be Interoperable to Be Actionable

The bottom line is that healthcare data must be interoperable to be actionable. If this information is only available in a limited capacity, it can’t serve the individual patient or the greater public. We’re extreme advocates for removing obstacles around data sharing. Data is the fuel for every industry’s future, and healthcare is no exception.