Conn. pharmacies say they lose out in state deal

SHANNON YOUNG

HARTFORD, Conn. (AP) — Connecticut pharmacies say they have lost a substantial amount of business under the 2011 state employee bargaining agreement that funnels long-term prescriptions into CVS pharmacies in an effort to reduce costs.

Now some state lawmakers are looking to enact legislation that directs business back to independent pharmacies.

Under the agreement reached between Gov. Dannel P. Malloy's administration and the State Employees Bargaining Agent Coalition, or SEBAC, long-term prescriptions consisting of at least a 90-day drug supply must now be filled through CVS pharmacies or Caremark mail orders. SEBAC represents 45,000 unionized state employees.

CVS Caremark spokeswoman Christine Kramer would not comment on the growth of CVS prescriptions in Connecticut since the benefit plan began in October, saying that her company does not provide state-by-state breakdowns of such information.

Independent pharmacies may also fill long-term prescriptions, or maintenance drugs, by participating in the state's Maintenance Drug Network. To participate in this, however, independent pharmacies must be able to match CVS/Caremark prices, which is financially difficult for some smaller pharmacies.

The state comptroller's office said the network was created as an alternative to the mail-order requirement under the state employee bargaining agreement, with hopes that it would encourage foot traffic into local pharmacies.

Sandy Kantamaneni, the owner of Beacon Prescriptions in Willimantic, said, however, that her pharmacy has lost money on nearly every prescription by participating in the network.

Under the network, pharmacies contract with CVS and receive varying pre-set reimbursements for each prescription that is filled. Because the independent pharmacies are not able to purchase drugs at the same wholesale rates as CVS, pharmacists say, they lose money through the reimbursement process.

Kantamaneni said that the money loss is greatest among expensive brand-name drugs, where pharmacies can lose hundreds of dollars when CVS reimburses them at a significantly lower rate.

"(Local pharmacies) are stuck between a rock and a hard place," said Karen Hekeler, a consultant with Northeast Pharmacy Service Corporation, which represents independent pharmacies.

Hekeler said that many local pharmacies are made to choose between losing a significant percentage of their business — up to 20 percent for some — or losing thousands of dollars through reimbursements.

Susan Palmer, a pharmacist at the Durham Pharmacy, said prescription business has declined by around 30 percent after the pharmacy chose to not participate in the state's network.

She said that since the agreement went into effect, her pharmacy currently fills 100 fewer orders on Mondays, typically the busiest day for prescriptions.

Marghie Giuliano, executive vice president of the Connecticut Pharmacists Association, said that some pharmacies, like Storrs Drug, are in agreements to sell or close due, in part, to the difficult position they were placed in under the union coalition's agreement.

"We have not seen the complete picture of where the fallout will come," she said.

Both Giuliano and Hekeler said their organizations have been working with legislators to make changes to the prescription drug program.

Earlier this month, Republicans included eliminating SEBAC's mail-order requirement in their legislative priorities for the session. State Republicans are also looking to offset some of the financial losses of independent pharmacies by pursuing legislation that looks to double the dispensing reimbursements local pharmacies receive for Medicaid prescriptions.

Senate Minority Leader John McKinney, R-Fairfield, said that he believes the changes the governor made in the budget, like reducing the reimbursement rate for Medicaid prescriptions, as well as the conditions in the SEBAC agreement, have been damaging to small pharmacies.

"I think we will be seeing more closures if no changes are made," he said.

McKinney said he'd like to see the SEBAC agreement re-opened to eliminate the mail-order requirement, which he says few state employees are taking advantage of.

Likewise, Rep. Zeke Zalaski, D-Southington, is pushing for legislation that allows local and small pharmacies to participate in the state employee drug program. He said that the language of the bill is currently being written, but that it looks to work with pharmacy wholesale contracts to expand the number of pharmacies that can receive mail-order prescriptions.

Zalaski said the legislation would not require the state to re-open the SEBAC agreement.

Rep. Roberta Willis, D-Lakeville, who has been working with Zalaski on the issue, said that local pharmacies in her district have suffered under the state employee agreement. Willis said that because large chain pharmacies, like CVS, are not prevalent in small towns, many of her constituents must go out of their way to pick up prescriptions.

She said this also creates a problem for communities where patients have confidence and relationships built up with their local pharmacists.

Willis said she plans to put her name on the legislation, as well.

Office of Policy and Management Secretary Ben Barnes said in a statement that the administration is concerned over the impacts of Zalaski's proposal. Barnes also criticized the potential costs of McKinney's proposals.

Meanwhile, State Comptroller Kevin Lembo said in a statement that his office, which administers the state employee health insurance program, will "monitor and review all legislative proposals after they are submitted."