A regulation in President Obama’s health care law will change the frequency of deliveries from pharmacies that dispense brand-name drugs to long-term-care facilities, such as nursing homes. Intended as a cost-saver, the “short-cycle dispensing” step is under fire from long term care organizations, who claim it will end up raising prices for the popular Medicare Part D prescription program.
Section 3310 of the Patient Protection and Affordable Care Act is designed to reduce pharmaceutical waste in long-term care (LTC) facilities by changing their delivery schedules from once a month to once a week. However, the Long Term Care Pharmacy Alliance (LTCPA) is expressing serious concerns about the unintended consequences such an approach could have on patient care.
Although brand-name drugs are the only ones specified in the regulation, the LTCPA maintains the regulation will open the door for more frequent dispensing of low-cost generic drugs, and is expresses concern about the impact on patients.
LTCPA Claims CBO Confusion
According to the Congressional Budget Office (CBO), increasing the frequency of deliveries would save taxpayers some $712.5 million a year by reducing the number of unused drugs billed to Medicare. Bill Daniel, executive director of the LTCPA, says the CBO’s data is suspect.
“We had a meeting with them and don’t really know where their data came from,” Daniel said. “We think they have some confusion about Medicare Part A and Part B benefits. Part A is for short-term stays in long-term care facilities that usually last from 20 to 25 days. During that time, a patient might be on various pain medications. On Part B the average stay is from 2 to 2 ½ years. Usually there’s very little waste, and the 17 percent to 20 percent waste reported by Centers for Medicare & Medicaid Services (CMS) is an apples to oranges comparison anyway.”
According to Daniel, the LTCPA’s research indicates that unless the drugs in question are very expensive—$400 or more per prescription—very little savings occurs from short cycling.
“We were disappointed that there was not more research from the government. We do not oppose the health care reform—they are trying to make it look attractive to people, and that’s why they say that this regulation would save the government $5.7 billion over 10 years,” Daniel said. “But in fact our study found this regulation will cost the government more money. We hired an outside firm to conduct the research, so it’s not biased, and CMS does not disagree with our research.”
Research Indicates Low Savings
The research Daniel referred to was conducted by Gary Bazalo and Richard C. Weiss, who attempted to determine the level of unused medication dispensed to nursing home residents covered by Medicare Part D and the impact of short-fill dispensing on costs based on a large data sample of both dispensed and returned prescriptions from multiple LTC pharmacies. The researchers found any savings achieved by reducing unused medications are exceeded by the additional dispensing fees resulting from the far greater number of prescriptions dispensed.
Their findings showed a weekly fill-time applied to roughly 59 million brand and generic oral solid prescriptions will result in 194 million additional dispensings annually. With an average dispensing fee of $4.74, this translates to an additional cost of over $820 million to Part D plans, well above the $125 million the researchers found as expected annual savings, and more than $100 million more than CBO’s figure.
“In fact, CMS were able to see the economic impact of only short-cycling brand name drugs, which comprise 30 percent of the drugs dispensed by pharmacists. They agreed with us and took generic drugs—which represent the other 70 percent of drugs—out of this regulation,” says Daniel.
LTC as Guinea Pigs?
Susan Janeczko, director of Long Term Care Policy and Regulatory Affairs for the National Community Pharmacists Association, a lobbying group for the nation’s independent pharmacies, independent pharmacy franchises, and independent chains, also expresses doubts about the new rule.
“We understand why they’re doing this: If you have a 30-day supply of pills issued and the patient is discharged and stops taking them after 10 days, then you’ve wasted 20 days’ worth of pills,” says Janeczko. “Unfortunately, it’s more complex than this. We all want the pills to be dispensed to where they are needed. And you have to worry about the environmental impact of waste, or that the unused pills might wind up in the water supply.”
Janeczko agrees there is little justification for lofty money-savings claims, however.
“There is no data anywhere to show that this is going to save anyone any money. If no money is going to be saved, then we’re going to need additional dispensing fees, which are not currently guaranteed. This rule was supposed to save the government something like $6 billion over 10 years, but now the LTCA study shows that it is going to cost the government $800 million,” says Janeczko.
More data is needed, she says.
“We all agree that there is waste, but how much? If the CMS had a well-designed study that shows it would save money, then we could get on board with it. I’m basically concerned that we’re being used as guinea pigs,” says Janeczko.
Kenneth Artz ([email protected]) writes from Dallas, Texas.
Artz has more than 20 years’ experience in nonprofit organizations, publishing, newspaper reporting, and public policy advocacy.
