Issue
4 Factors of Consumer Behavior
six
August/2016 The Man, The Myth, The Legend
Todd Eury The Advantages of Owning Commercial Property
GrandView Pharmacy False Claims Act Penalties Dramatically Increasing
Ask Dr. Kondo, P.D.
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Table of Contents Issue 06 / August, 2016
04
Presidents Message
08
The Man, The Myth, The Legend, Todd Eury
12
14
Ask Dr. Kondo, P.D., How to Start A Specialty Pharmacy Fighting Fakes, Fraud, and Theft: Your Guide to DSCSA’s New Normal
18
4 Factors of Consumer Behavior
20
The Advantag es of Owning Commercial Property
24
An Interview with President and Co-Foundera Benzer Pharmacy
28
False Claims Act Penalties Dramatically Increasing
32
Easing the Pain of Insurance Audits with SuiteRx IPS
36
How High Will They Go?
40
GrandView Pharmacy
44
Pharmacists, Check Both Exclusion Lists!
KNOW
we PHARMACY In fact, you could argue that we are the largest investor in
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•
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Jimmy Neil Pharmacy Loan Expert jimmy.neil@liveoakbank.com 910.212.4951 Mike Bollinger Pharmacy Loan Expert mike.bollinger@liveoakbank.com 504.453.9726 © 2016 Live Oak Banking Company. All rights reserved. Member FDIC
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President’s message Joshua Pirestani Dear Friends, It is very easy to go about our daily lives and pretend that others don’t matter. It is so easy to only concern ourselves with issues, which only affect us and our loved ones. Life would be much simpler if we only had to think about numero uno. But the reality is that we are not narcissistic individuals, which is evident by our chosen occupations. Though there may be a small population who disagrees, the vast majority of the population who are subscribers or readers of this magazine have chosen to help the greater good. You’ve chosen to make a difference in the lives of others by helping them ease their pain. That in itself makes you a hero. I started APPA to acknowledge our heroes and the people who make a difference in people’s lives. It is you who educate your customers and take away the fears of ignorance. So thank you. Thank you from myself and all the faceless patients you’ve helped through-
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out the years, whether it be providing them with personalized service or being the puppeteer behind the scenes making things happen. Thank you. As we progress into a little past the mid year, we at APPA want to make sure that we are serving you. Please do not hesitate to send any suggestions on the type of content you would like to see in Pharmacy Edge. Alternatively, we will continue to collaborate with our advisors and sponsors to bring you content, which will provide professional growth and keep you abreast of current industry related topics. We hope this month’s magazine further wets your appetite for knowledge, because after all, knowledge is power. Thank you again for your support and for your service to the public. Thank you for being our heroes! Joshua Pirestani President
The Man, The Myth, The Legend
Todd Eury
I
n a career, being new to any industry especially healthcare isn’t easy. In June of 2004 Todd Eury left an eight-year career in the telecommunications industry and entered the pharmacy technology sector as SoftWriter’s (FrameworkLTC pharmacy software for institutional pharmacies) first business development oriented employee. “It was a gamble for me”, Eury recounts, “being part of a national fortune 500 company like AT&T Business felt comfortable and making the jump to pharmacy software sales with a little privately owned company made me nervous, 8 pharmacy edge
but excited.” Within Eury’s first year with SoftWriters the company doubled its customer base and within the next 3 years SoftWriters was positioned as the most innovative LTC Pharmacy Software Company in the industry. “From there I wanted to do more, I wanted to help pharmacy owners leverage technology and understand other facets of their business, which seemed mysterious. Marketing, drug purchasing and new patient development were all parts of the business of pharmacy, which seemed undefined. I wanted to help with more than just technology.”
Eury has worked with several pharmacy system developers like KeyCentrix, Inc., headquartered in Wichita Kansas and SuiteRx, Inc., with offices in Chicago and Fort Worth Texas. In March of 2009 Eury founded the Pharmacy Podcast Show, the first audio blog about the Business of #Pharmacy. The podcast is dedicated to the pharmacy profession. The Podcast is about good useable content, information, and innovative ideas that Eury believes will advance the pharmacy profession. The podcast’s programming is developed Independent Retail, Compounding,
Colonial Management Group has over 25 years experience in helping clients suffering with addiction. I am proud to be a part of this national initiative.
Long-term Care, Specialty, Hospital Systems, and Small Chain Pharmacy Businesses. There’s a new podcast segment dedicated to patients, specialty pharmacy, and the business law of pharmacy too. The podcast is the only digital health audio blog dedicated to the business of pharmacy and assists its sponsors with business lead development from a myriad of digital strategies including html embed code, which places the podcast audio player into the web-environment of the sponsor’s website. “No other advertising tool or magazine in pharmacy uses this technique to drive business leads to an organization focused on pharmacy. Retail Management Solutions, Vuca Health, McKesson, Live Oak Bank, RxSafe, and dozen’s of other companies have benefited from the digital content through the Pharmacy Podcast Show.” Based on healthcare analytics researcher Symplur, Eury is ranked as one of the most influential voices in the pharmacy space with a Twitter presence @PharmacyPodcast, which is also about the Business of Pharmacy. “Our followers respond to our tweets and links on average more than any other Twitter han-
dle focused on the word “Pharmacy” and the hashtag #Pharmacy is tracked by Symplur and shows the effectiveness of our popularity and influence. Symplur is fascinating.” Eury is the founder of LinkedIn Networking Group: “Pharmacy Professionals Network” reaching more than 25,000 participants discussing different topics centered in pharmacy. In 2011 Eury created a firebrand pharmacy buying group called PharmacyGPO, which didn’t reach its potential before being sold in 2014 with partnership difficulties. PharmacyGPO experienced explosive growth of $144M sales and had search engine domination when the term pharmacy GPO was searched for by a operations director or owner. The pharmacy buying group also assisted its nearly 100 members with strategic marketing, technology consultancy, and different creative ways to develop new patients. Eury served 2 terms with the Pennsylvania Pharmacist Association as Board of Directors Industry Association Chair and has been published in Pharmacy Times through the podcast content engine since January 2015. Eury’s newest venture is with Colonial Management Group, which focuses
on supporting physicians with all marketing, administrative, staffing, and business development with patient care services through their American Practice Support division, which Eury will be leading as Director of Strategy. “I’m excited about this new venture and its ties into specialty pharmacy with different medications helping patients overcome the disease of addiction. Supporting the patients with HUB-like services is critical to sustainability and Colonial Management Group has over 25 years experience in helping clients suffering with addiction. I am proud to be a part of this national initiative.” Eury is considering selling the Pharmacy Podcast Show to an established publication like Pharmacy Times or a strategic service unit of pharmacy business like Live Oak Bank. “I want to be sure the podcast continues and grows with co-host’s who bring immense intelligence to the podcast and help pharmacy business operators to deliver better patient care to our healthcare system. I won’t have the time to dedicate to the publication like I use to and since 2009 the listeners have grown to over 50,000+ - it’s a unique and needed digital publication.”
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How to Start A Specialty Pharmacy
I
f you attend pharmacist events or read pharmacy magazines, you’ve most likely come across the term “specialty pharmacy” (which refers to pharmacies that cater to patients who need specialized and usually high-cost medications for cancer and other diseases). You may also have heard that this type of business allows owners to reap financial rewards and that it will continue to grow at a steady rate in the future. All of these info may inspire you to set up your own specialty pharmacy. But how exactly can you start one? Well, you can begin by taking the following steps: Do your research It’s hard to be successful in something that you don’t know much about. So, before taking any step, you should first do your research and learn more about the specialty pharmacy industry. Find out how much you can expect to earn every year, and get more information about the challenges that you’ll face in setting up and managing this type of business. If you can, speak with specialty pharmacy owners to know how they’ve become successful and get useful tips. By arming yourself with the right knowledge, you’ll minimize setbacks and increase your chances of achieving success.
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Decide how you’ll approach the business There are two major ways to start a specialty pharmacy: set up one on your own or partner with existing healthcare systems. The DIY approach is advisable if you want to have the freedom to run your business according to your own terms and if you have the skills and experience to set up your own specialty pharmacy. Building a partnership, meanwhile, is recommended if you’re not confident with starting a specialty pharmacy by yourself and if you’d like to have a business model that has been tested and proven to be effective. Choose a condition to focus on The specialty pharmacy industry covers a wide range of disease states, such as cancers, cystic fibrosis, AIDS, multiple sclerosis, osteoarthritis, and pulmonary hypertension. You can choose to provide services for all of these conditions, but it’s always advisable to focus on just one disease state. On top of that, many experts recommend that you concentrate on providing a limited number of specialty drugs. These may go against the traditional retail principle of selling as many products as you can, but remember that managing a specialty industry
is complicated. You’ll be dealing with advanced biotech drugs and injectable medications that have strong side effects and adverse effects and may interact with other prescriptions, which means you must carefully administer them and monitor your patients. Of course, you’ll be dealing with people who are already in fragile health and must be provided with excellent care. By specializing in just one disease state, you can focus your time and attention on properly caring for the patients who visit your specialty pharmacy and provide them with the best possible experience. Obtain the required permits, licenses, and accreditation The government as well as insurance companies will require your specialty pharmacy to have certain accreditation before they provide reimbursement. Many manufacturers will also require you to have accreditation before they’d supply you with medications. So, get in touch with accrediting bodies such as URAC to find out how you can get your specialty pharmacy accredited. Starting a specialty pharmacy isn’t easy. But, by taking the right steps, you can get your business off the ground and ultimately enjoy the benefits it offers.
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Fighting Fakes, Fraud, and Theft: Your Guide to DSCSA’s New Normal
The Case for DSCSA The Drug Supply Chain Security Act began, in part, in reaction to increasing threats to the nation’s drug supply chain from counterfeiting, theft, fraud, and diversion. As far back as 2002 the National Cancer Institute published an article noting the need for increased urgency in identifying and intercepting phony medication, due in large part to the profitability of expensive new drugs.*
That same year, the arrest of a Missouri pharmacist who diluted chemotherapy drugs for thousands of cancer patients made headlines across the county. More recently, the number of thefts from pharmacies, from 2010-2013 numbered well over 8,000, with the majority attributed to employee pilferage. There are myriad examples of threats to our national drug supply – from the case of Gallant Pharma, exposed by the Department of Justice (DOJ) in 2013, allegedly operating without an FDA license out of offices in Virginia with a nationwide salesforce garnering over $8.6 million in illegal revenue from 2009 – 2013, to the 14 pharmacy edge
investigative journalism published by the LA Times this month, setting out the sordid details of an astounding, decade-long rash of oxycontin pill mill operations in the Los Angeles area. In November of 2013, Part II of Drug Quality & Security Act was signed into law, to create a nationwide electronic database to track and trace drug information and chain of ownership through the supply chain. The ultimate goal of DSCSA is patient safety. DSCSA currently requires tracing of ownership and product data to the lot level. By 2026, it will require mass serialization of drug products using 2D bar codes traced down to the unit level.
Who has to comply? The law requires drug manufacturers, wholesale distributors and dispensers to comply with its regulations. Dispensers include pharmacies, hospitals, nursing homes, assisted living facilities, and physicians selling retail products from their offices. Currently, compounding pharmacies are mostly exempt from these regulations. What are the Requirements? Verification Trading Partners must be verified and before you purchase a product from a wholesaler, you need to verify that the wholesaler is licensed to do business in your state. You also have to be sure your pharmacy is properly licensed – trading partners will be verifying you, as well. Quality Inspecting & Reporting Trading Partners must establish a process to inspect, investigate and quarantine any suspect or potentially adulterated or counterfeit product and quickly communicate this information up and down the supply chain. Transaction Data Management As of March 1, 2016, you must be able to receive track and trace transactional data and store the information with ready access for 6 years. The New Normal Under DSCSA included in the definition of “suspect
product” is the category of “illegitimate products” which includes any products where there is credible evidence that such product may be diverted, stolen or the subject of a fraudulent transaction. §581(8) of the FD&C Act. Denise Garcia, Chief Compliance Officer for InfiniTrak, a DSCSA compliance solution, referred to the LA Times story about oxycontin and gave this strong warning, “Whether you are a manufacturer, wholesaler or pharmacy, if this were to happen today, and you had any suspicions regarding unusual quantities, unusual prescribing patterns, or suspicious characters purchasing your products, you are mandated under the law to investigate a potential fraudulent transaction and if necessary report such activity as “suspect”. Any failure to do so would make you subject to FDA enforcement and penalties. You, not just the manufacturer, could be liable in a subsequent investigation by authorities. If you don’t have a track and trace solution in place that helps you manage potential suspect products or suspect trading partner incidents, you should.” When looking for a Track & Trace system that is a fit for your organization, there is a lot to take into consideration. The most important thing to look for is a solution that will provide the most value and maintain compliance. Compliance is one of the most difficult operational activities to control, and the right Track & Trace solution will help your organization run more efficiently, and maintain full DSCSA compliance.
For more information on DSCSA and How to Become Fully Compliant – contact: info@InfiniTrak.us *JNCI: Jnl of National Cancer Institute Volume 94, Issue 19 Pp. 1424-1426 pharmacy edge
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Continuing our look at the factors of consumer behavior, this month we take a look at social class. Remember, while we aren’t able to control these factors of behavior, we should always take them into account.
4 Factors of
Consumer Behavior
Each person has different factors that affect their purchasing behavior - cultural, social, personal, and psychological. Social factors consist of the consumer’s small groups and family.
in product purchases comes from an individual’s groups -word-of-mouth. This refers to personal words and recommendations of trusted friends, associates and other consumers.
There are two main kinds of groups to note.
Since word-of-mouth is such an large influence in most people’s purchasing behaviors it is important to always provide above and beyond service. People won’t recommend you to their groups if they had less than stellar service.
1. Groups that have a direct influence and to which a person belongs are called membership groups (e.g. gym member). 2. Reference groups serve as indirect points of comparison or reference. (e.g. amateur athlete influenced by professional athletes). Both types of groups expose people to new behaviors/lifestyles and influence their attitudes and self-concepts and create pressures to confirm to those groups. One of the biggest influences
Family is the most important consumer buying organization in society. One big thing to note is that in recent studies, children influenced an additional $150 billion that their families spend on items such as food, clothing, entertainment and personal care items. Consider adding a children’s section or end cap to cater to these big influencers.
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18 pharmacy edge
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The Advantages of Owning Commercial Property
M
ost pharmacy owners must eventually confront the issue of whether to purchase or lease their buildings. There are many factors to consider in making this important decision. For new pharmacists who are uncertain of future space needs, and who want to ensure maximum cash flow as they grow their businesses, leasing may be a wise option. But for new or seasoned owners with a strong financial profile, a clear picture of future growth, and the ability to take advantage of the tax benefits of ownership, a commercial real estate purchase can provide a solid foundation for growth.
20 pharmacy edge
Following are a number of potential advantages to owning commercial property: HISTORICALLY LOW PRICES Commercial properties for pharmacies are far less expensive today than they were before the recession. In some areas, it may ultimately be less costly to purchase and outfit commercial real estate than to build-out and rent a leased space. While property values will not likely rise at the aggressive rates seen from 1998 through 2005, it is a safe bet that at today’s lower prices, both residential and commercial real estate values are likely to appreciate over time. The property owner will receive the full benefit of that appreciation. FAVORABLE FINANCING RATES The most significant cost of purchasing real estate is the mortgage interest rate. Today, rates for commercial real estate purchases continue to be at an all-time low, ultimately saving significant funds as you pay down your commercial mortgage. However, obtaining financing can still be a challenge, so it’s critical to maintain a spotless financial profile and be prepared with a comprehensive business plan that makes the case for the viability of your pharmacy. Also, consider working with a lender that specializes in pharmacy financing and understands your particular needs. EQUITY APPRECIATION As you build equity in your business real estate, it becomes a valuable asset that you can leverage to further grow your business without putting your pharmacy itself at risk. This gives you greater flexibility in managing your business growth. It also gives you additional options when the time comes to retire. As the commercial property owner, you can sell the practice and underlying property outright at the time of retirement, or sell the pharmacy only and lease the commercial property, which produces an ongoing income stream.
CASH FLOW OPPORTUNITIES If you purchase commercial property that has space for tenants, you have opportunities for additional cash flow through rental income. You can use tenant income to help pay down the property purchase, thus offsetting the cost of your investment. However, it’s important to remember that having tenants involves property management responsibilities that may detract from attending to your core business of customer health. TAX ADVANTAGES* Owning your pharmacy real estate allows you to depreciate your asset while writing off all of the mortgage interest paid during the year. You can also enjoy the benefits of several tax deductions designed for the business or property owner: »» Section 179 — IRS Tax Code Section 179 allows deductions for equipment and furnishings purchases that are put into service the same year that they’re purchased. For the past three years, Congress has granted a generous deduction of $500,000, which can be a significant contribution toward offsetting the cost of the property purchase. »» Cost segregation —This method of depreciation allows you to depreciate the building and components, such as wiring and lighting, over a 39-year period, which offsets the cost of building maintenance for a significant amount of time. »» 1031 exchange — Investment properties used in a trade or business can be sold and the funds applied toward the purchase of a similar or like property within 180 days of sale, without reaping any tax consequences. The purchased property must be of equal or higher value to avoid a tax penalty. This provides leverage for an owner to move his or her pharmacy to a larger facility as the business grows, without being hindered by tax penalties.
Jimmy Neil is the General Manager of Pharmacy Lending at Live Oak Bank. Contact him at 910.212.4951 or jimmy.neil@liveoakbank.com.
*Before purchasing commercial real estate, be sure to consult with your tax advisor, CPA or financial consultant to fully understand how a purchase would affect your particular circumstances.
pharmacy edge
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Rx Career Center is home to the largest job board for pharmacy professionals. Job candidates can search career opportunities using a secure and confidential system. Employers have the ability to upload their open jobs and search résumés.
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An Interview with President and Co-Founder of
Alpesh Patel
24 pharmacy edge
Research has shown that appropriate medication therapy management and improving adherence has a sizable impact on decreasing total health care costs.
1. Tell me a little about yourself. Alpesh Patel has over 14 years’ experience in the field of pharmacy with strong skills in pharmacy business concepts. He has earned a Bachelor of Pharmacy degree from Shri Sarvjanik Pharmacy College in India and is currently a licensed pharmacist. As the president and co-founder of Benzer Pharmacy, he is responsible for overseeing core business management and development of the company including execution and financial management of all Benzer Pharmacies. He also offers technical knowledge as a pharmacist, and skill in managing a successful chain of over 55 pharmacies across 9 states. Alpesh has worked as a pharmacist with other chain pharmacies where he gained knowledge in pharmacy practice as well as valuable information about the business of pharmacy. A motto Alpesh strongly believes in is: “Every problem has a solution. It just takes effort to find the right one. Never give up!” 2. What do you enjoy about being in this industry? Alpesh is dedicated to improving the health of customers. As a business owner, Alpesh understands the importance of helping make every state the best place in world to enjoy a life full of opportunity. By opening and acquiring new stores, Alpesh’s overarching goal, is to help people on their path to better life and to enhance the health
of our community. Alpesh enjoys being in this industry because he can positively impact people’s lives. 3. What type of services do you offer your patients, or store owners. OUR SERVICES • FREE Home Delivery • FREE Med Pack Preparation • Refill Reminders • Customized Compound Medications • Brand Names, Generics & Specialty Drugs • We Prepare Prior Authorization Forms • Customized Medication Packaging • We Accept Most Major Insurances • We Match Competitor’s Pricing • Workers’ Compensation • Wait Time Less Than 10 Minutes 4. Tell me your impression on where the specialty/ retail, etc. pharmacy industry is heading The demand for specialty medications has increased dramatically over the past years. Specialty pharmacies like Benzer Pharmacy continue to focus on the customer’s needs by offering health consultations and personalized care. Research has shown that appropriate medication therapy management and improving adherence has a sizable impact on decreasing total health care costs. Benzer Pharmacy specializes in specialty drugs and also focusses on
medication management programs for people with complex chronic diseases, including Hepatitis, HIV, Multiple Sclerosis (MS), Rheumatoid Arthritis (RA), Dermatology and Gastrointestinal Disorders (GI). 5. Crystal ball - tell me how the landscape in specialty/ retail, etc will shift over the next 5 years With the demand for specialty medications having increased dramatically over the past years, there will be a great focus on clinical and specialty services. 6.What is One piece of advice you would give someone wanting to start a specialty / retail, etc. pharmacy One needs sufficient capital and don’t go in it alone. Anyone who wants to start a pharmacy will need support. To thrive in this industry, independent pharmacy owners need a common identity and platform to leverage their collective strength. This will Increase purchasing power along with reduction of cost of goods and expenses. 7. How do I get more info about joining Benzer? Benzer Pharmacy (Corporate Office) 5908 Breckenridge Parkway Tampa, FL 33619 Phone: 813.304.2221 Email: info@benzerpharmacy.com Website: www.BenzerPharmacy.com 8. We know you are heavily involved with local communities where you stores are located in. Tell us a little bit more about why
pharmacy edge
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you feel it’s important to do so. Through Alpesh’s leadership, Benzer Pharmacy has gone beyond monetary donations such as: collecting toys for children in need, supporting senior events, raising funds to support health events, and food drives. Alpesh has advanced the practice of pharmacy by actively being involved in the financial budgeting of a medication disposal program for the company through a campaign dabbed as “Dispose My Meds”, a prescription drug take-back program. Patients of any pharmacy are invited to safely dispose of unused or expired medications that are in the original container at all Benzer Pharmacies. Alpesh created a budget to purchase Sharps TakeAway Environmental Return System container, a safe, easy method to dispose unused patient medications in an environmentally friendly way. The service is offered FREE of charge to the community and showcases the company’s leadership in protecting the environment and preventing medication misuse. Alpesh’s future goal is to become a respected executive that can be trusted to deliver ethical, sustainable and strategic growth and development. 9. If I were looking through the patient’s eyes, what separates Benzer pharmacy from the rest. The greatest difference with an independent pharmacy is that the owner lives in the same state and likely interacts with the people who make his business successful. This has been Alpesh’s positioning for the long 26 pharmacy edge
term, to continue to grow steadily and focus on customers’ needs. Benzer Pharmacy stresses the importance of making a difference within the community. Benzer Pharmacy’s hard-work, commitment to superb customer service, as well as dedication to maintain company values, has helped the pharmacy to continue growing exponentially! 10. We wanted to also congratulate you on the release of your knew franchise model. Tell us a little bit about that. Why did you start it, what are the benefits, etc.? In the retail pharmacy industry today, independent pharmacies face medication reimbursement complexities, experience a reduction in the number of prescriptions dispensed, access to specialty medications, vendor discounts, as well as in overall revenue growth. Margin pressure is particularly acute because 90% or more of the stores revenue comes from prescription sales compared to larger pharmacy chains who are able to offset lower prescription reimbursements with front-end sales. Benzer Pharmacy launched its franchise model early this year with the aim of providing independent pharmacies with a platform to leverage their collective strength under one brand. With more than 10 years of experience providing excellent pharmacy service, Benzer Pharmacy has developed a streamlined approach to delivering the professionalism and reliability that customers expect, in a comfortable environment.
Business owners looking for a low investment and high returns are encouraged to explore the Benzer franchise opportunity. Benzer Pharmacy franchisees will instantly receive: the credibility and recognition of: a large national brand, reduced cost of goods and expenses, full access to expert HR, marketing, accounting, compliance and operational support, cutting edge business coaching to optimize all the key areas of operations, and access to the full spectrum of specialty medications. 11. What impacts if any do you think the election will have on this industry. If Trump wins and abolishes Obamacare how will this impact the independent pharmacy owner? If Hilary wins, with the healthcare industry in her back pocket affect this industry? Regardless of political affiliation, people will always need healthcare. Our mission at Benzer Pharmacy is to provide our patients and customers with personalized and professional health services from our highly trained and courteous staff of pharmacists. We aim to help maintain the well being of the local community and its residents. Our commitment is to provide quality and affordable products from a company with exceptional community and family values. 12. How can our audience contact you for more info about careers with Benzer, Franchise Inquiries etc.? Benzer Pharmacy Franchising Phone: (813) 448-1323 Fax: (813) 436-5686 Email: info@benzerpharmacy.com Website: http://franchise. benzerpharmacy.com
False Claims Act Penalties Dramatically Increasing The Department of Justice has confirmed a dramatic increase in the civil monetary penalty (CMP) amount the government can levy per-claim for violations of the False Claims Act. As reported by Law360, the DOJ confirmed in late June that the penalties are set to nearly double.
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n November 2, 2015, President Obama signed into law the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act), which further amended the Federal Civil Penalties Inflation Adjustment Act of 1990. The 2015 Act updates the process by which federal agencies adjust applicable civil monetary penalties for inflation to retain the deterrent effect of those penalties. The 2015 Act requires that not later than July 1, 2016, and not later than January 15 of every year thereafter, the head of each agency must, by regulation published in the Federal Register, adjust each CMP within its jurisdiction by the inflation adjustment described in the 2015 Act. According to reporting by Law360, the issue has been on the radar since May when the Railroad Retirement Board updated FCA penalties in accordance with the 2015 Act. Since that early May publishing in the Federal Register, a multitude of federal agencies have followed suit and include, among others, the Department of Defense, Small Business Administration, Veteran’s Affairs, HUD, Postal Service, Department of State, and Department of Commerce. For violations of the False Claims Act, the interim final rule minimum per-claim CMP’s will increase to $10,781 from $5,500, and maximum per-claim CMPs will jump to $21,563 from $11,000. The increase takes effect August 1 and applies to violations after November 2, 2015. Agencies are required to make an initial “catch-up” adjustment for CMPs. Thereafter, agencies are required to make annual inflationary adjustments, starting January 15, 2017, and each year following, based on Office of Management and Budget guidance. Future adjustments are based upon a cost-ofliving adjustment. The cost-of-living adjustment
Brian E. Dickerson, Esq. Anthony j. Calamunci brian.dickerson@fisherbroyles.com anthony.calamunci@fisherbroyles.com fisherbroyles.com fisherbroyles.com
is the percentage (if any) for each CMP by which the Consumer Price Index (CPI) for the month of October preceding the date of the adjustment (January 15), exceeds the CPI for the month of October in the previous calendar year. The 2015 Act gives the DOJ flexibility under the spending law, to enact a smaller increase if the full amount would produce a negative economic impact however, the department has said without explanation that it “is not evoking that authority in this rule,” according to Law360. False Claims Act litigation in healthcare and pharmacy often involves large numbers of claims, therefore, the impact this may have on pending and future enforcement actions is significant. A good number of enforcement actions are settled however, for those that elect to go to trial, the financial risk has doubled. Even though the cases are settled this exposes the pharmacy to higher settlement values as well as higher verdicts – the settlement amounts demanded and expected by the government will increase as a result. False claims also applies to national security and defense contracts, and government programs such as federally insured loans, highway funds, research grants, agricultural supports, school lunches and disaster assistance. The regulation passed in June impacts more than 50 other categories affecting many industry sectors that do business with the federal government. Each agency under the 2015 Act is charged with adjusting the CMPs for inflation for the regulatory provisions under their jurisdiction. For more information on this subject matter, please contact any one of the following attorneys:
Nicole H. Waid nicole.waid@fisherbroyles.com 202-906-9572
Amy L. Butler amy.butler@fisherbroyles.com
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Just What the Doctor Ordered . . . PRAETORIAN Rx Consulting
Your customized prescription for increasing productivity, visibility, and profitability. In order to obtain the best consulting services for your pharmacy, you need to choose a plan that is right for you. Praetorian Rx Consulting Services is able to identify niches within your business. Then we design, strategize, market, and create programs to fill these niches with the support your business desires. We are able to grow your business by identifying shortfalls in clinical expertise, the lack of innovation, and issues within your organization that may be holding your expansion back.
MARKETING
Our marketing programs allow Praetorian Rx to deliver the level of service that you need. Whether it is as simple as developing a strategic marketing initiative designed to enhance your business value or as complex as staffing and managing your everyday marketing needs, Praetorian Rx addresses every level of service available to your maximum benefit. We can help you sustain and grow your current lines of business or identify new niche opportunities that will make you more successful.
PHARMACY MANAGEMENT SERVICES
Let Praetorian Rx manage your pharmacy when you are not able. Our Pharmacy Management Service is perfect for absentee and non-pharmacist owners as well as special situations like emergency turnaround. We are able to correct internal, operational, and organizational problems. All of these efforts provide the same ending every time; peace of mind. You can expect your business to grow, without the headache of expending efforts to do so on your own.
STAFFING SERVICES
Our expertise in pharmacy staffing helps you develop the perfect team to increase productivity and profitability. We carefully screen candidates to insure the perfect fit with your organization and deliver industry experts that are prepared and on the ready.
Do you want to save time and make money? Let Praetorian Rx Consulting Services increase the profitability of your business by providing vetted solutions and business plans for your unique situation. CONSULTING (813) 279-2729
www.iamprx.com
Easing the Pain of Insurance Audits with SuiteRx IPS
I
t is frustrating; it is stressful; it is time consuming - these feelings apply to many experiences in life, but for the independent pharmacist, it is the dreaded insurance audits that dredge up such horror.
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Pharmacy audits are a topic of great dismay, yet nonetheless unavoidable as long as the insurance companies and PBMs are calling the shots. There are no shortcuts to acing these audits; however, independent pharmacies are able to take precaution with a simple solution they’re most likely already employing in their daily routine - intelligent pharmacy software. When fully utilized , SuiteRx IPS provides a level of protection from auditors by providing improved workflow efficiency. Whether prescriptions are received via IVR, the Web Portal, Patient Refill Application, Email, or E-prescribing, SuiteRx document management will digitally capture and funnel prescription images for easy filing. Each step of the workflow is recorded and timestamped from prescription fill to prescription delivery including electronic signature capture, leaving a complete audit trail for each prescription. Document Management has become the cornerstone of an efficiently run pharmacy. With our system, you will have instant access to all documents including prescriptions, refill approvals, prior authorization forms and signed patient forms, just to name a few. If that wasn’t sweet enough, SuiteRx IPS also includes an Audit Module that allows the auditor to have access only to their particular insurance company needs. Minimize prescription paybacks and stave off auditors with our Document Management System. SuiteRx IPS Audit Benefits: »» Prescription Capture »» Timestamp Workflow Activities »» Proof of Delivery »» Signature Capture »» Quick Search & Retrieval »» Fill Record »» Audit Module Contact SuiteRx Today: Phone: 916-242-8779 Website: www.suiterx.com Email: sales@suiterx.com pharmacy edge
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United RX Solutions Why United Rx Solutions? »» »» »» »» »»
Exceptional On-Site Service! Quick & Easy Mail-In Service! Store-Level Reporting & Crediting! Efficiency & Accuracy! Service Manifests Including Dashboard Chart Analysis
With ownership having over 90 years of combined industry knowledge, pharmaceutical returns is not just our business, it’s our passion! With Honesty and Integrity as our guide, we strive to elevate the status quo and be the innovators of the future. We value the rights and reputation of our clients as well as our employees and endeavor to always ensure the satisfaction of all parties.
www.unitedrxsolutions.com Contact Number: 844-741-9718 78 Crossways Drive East, Bohemia, NY 11716
How High Will They Go?
What pharmaceutical purchasers need to know about the rapidly-evolving drug pricing landscape mD, BCPS
r By Julie Rubin, Pha
For those in the healthcare industry, and in particular, the pharmaceutical industry, discussion of the rapidly increasing cost of drugs is virtually inescapable. Still, even as high-profile cases – such as Turing Pharmaceuticals’ shocking price gouging of an AIDS and cancer treatment drug from $13.50 to $750 a dose in 2015 – have catapulted the issue into the national consumer spotlight, insight into what’s driving the trend and what to do about it remains elusive. Drug pricing is complex, and as with most issues, a bit of background helps: Pharmaceuticals have always been a major U.S. industry, and the country is a global leader in new pharmaceutical development. In recent years, however, drug spending has grown exponentially – from
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$215 billion in 2006 to close to $500 billion in 2015 (DHHS/CMS). Importantly, this trend hasn’t only affected branded and specialty items – the price of generic drugs, which account for 80 percent of all U.S. prescriptions (FDA), has increased by about three percent (Truveris). So, what’s driven such dramatic price increases over the past decade? Experts point to many drivers, including: »»Growth of polypharmacy: Polypharmacy has exploded in recent years, according to the American Medical Association (AMA), culminating in nearly 40 percent of adults ages 65+ using five or more prescription medications simultaneously. Obviously, this boosts drug spend – many times, unnecessarily with many patients
taking drugs that are ineffective or no longer needed – but it has also contributed to other issues, such as the rise of adverse drug events. »»Lack of price regulation: Over the years, experts have debated whether the U.S. government should set price floors or ceilings for prescription drugs. While many fear such a move could stifle competition and innovation, others argue the potential benefits outweigh these risks, and that measures such as a streamlined FDA approval process or federal incentives for new drug development could help mitigate them. »»Lengthy patent periods: On average, U.S. drug patents last for 20 years (FDA) – considerably longer than those in other coun-
tries – creating a ripe environment for monopolies and limited competition. In contrast, India, where patents are only available for manufacturing processes and last only five years, sees much lower drug prices. As one example, Gleevac, a common cancer drug, costs $1,000 in India compared to $84,000 in the U.S. »»Limited generic competition: Historically, generic drugs have come to market with 15-20 percent discounts – made possible through the competition of five to 10 companies that manufacture them. In recent years, however, producers of older drugs have cut production in response to declining revenue, resulting in monopolies, and drastically inflated drug prices. »»Unintended DESI consequences: The Food and Drug Administration established the Drug Efficacy Study Implementation (DESI) program in the 1960s, requiring manufacturers to prove drugs already on the market were efficacious. As a result of the program, 1,000 drugs were determined to be ineffective and taken off the market, while “effective drugs” were subject to cumbersome paperwork and fees, forcing many manufacturers to stop production. The manufacturers that remain enjoy exclusivity patents and limited competition – benefits typically reserved for newly-branded drugs. »»Mergers and acquisitions: The number of mergers and acquisitions in the pharmaceutical industry has risen rapidly, marked by the announcement
of the largest ever pharmaceutical transaction – the merger of Pfizer/Allergan in a deal valued at about $160 billion – in 2015. While the deal is now on hold (due to regulatory attention to “tax inversion” schemes), there’s no doubt pharmaceutical M&A activity continues to limit industry competition. »»Research and development: While academic researchers have traditionally spearheaded drug development with federal funding from the National Institute of Health (NIH), they’re increasingly leveraging this financial support to sell their ideas to the pharmaceutical industry for development and patents. In fact, research suggests a $10 million increase in NIH funding equates to a net increase of 2.3 new patents (which, as noted, drive prices up) (National Bureau of Economic Research). »»Direct to consumer advertising: Despite American Medical Association efforts to ban direct to consumer advertising, the U.S. is the only country in the world in which it’s legal, and drug advertising here is a $3 billion a year industry (AMA). What’s more, pharmaceutical companies spend 2.5 times more on marketing and advertising than research and development, which critics argue drives drug spend by increasing requests for expensive brand name products and new drugs with higher profit margins (Families USA). These drivers have had a devastating
effect on healthcare providers and their patients – many of whom have been prompted to skip dosages to make prescriptions last longer, put off necessary medical care, and even delay retirement in order to retain corporate health insurance. While drug prices show no signs of reversing, there is a silver lining: everyone in the healthcare industry, including, and perhaps especially, pharmaceutical purchasers, may play a role in combatting them through tactics such as: »»Optimizing drug formularies and inventory through cost-saving strategies; for example, negotiating better prices based on utilization with GPOs and manufacturers. »»Promoting therapeutic interchange to dispense low-cost alternatives, which are therapeutically similar to – but less expensive than – brand name drugs. »»Considering biosimilars – the biotechnology “generics of the future” – which are almost identical to their brand name alternatives, but cost 30 to 50 percent less. »»Regularly reviewing charge masters and J codes as changes occur daily, and missing any of them may cause hospitals to lose out on critical reimbursements. As the drug pricing landscape continues to evolve, and until macro changes such as new regulations tackle the issue at its source, healthcare professionals of all disciplines must work together to stay up to date on related trends, developing innovative strategies to protect both their businesses and end users.
Julie Rubin, PharmD, BCPS is the director of clinical services for CompleteRx, a leading pharmacy management company. She has 20 years of clinical pharmacy experience, advising hospital and health executives across the country on critical issues such as rising drug costs, and is board certified in Pharmacotherapy.
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GrandView Pharmacy G
randView Pharmacy was founded as Elliot and Hood Drug Company in Connersville, Indiana. In 1960, due to the proximity of the pharmacy’s location to the Grandview School District, the owners appropriately renamed the pharmacy to become GrandView Pharmacy. Through the years, the single neighborhood pharmacy grew to four east central Indiana retail locations. These facilities offered many traditional pharmacy services and diverse retail products.
Headquarters: 474 Southpoint Circle Brownsburg, IN 46112 | Phone: 866-827-7575 www.grandrx.com Marketing Contact Mel Green - Director of Business Development & Customer Relations, 317.858.6663, mel.green@grandrx.com
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In 2005, GrandView Pharmacy took another large step toward becoming a superior Indiana pharmacy provider by expanding its long term care division. At one time, the long term care division of GrandView was operated from a small office behind the retail pharmacy. However, in 2005 GrandView an investment was made to build a facility in Brownsburg, Indiana. With much growth in the LTC division, a second LTC pharmacy was added in 2008 in Fort Wayne, Indiana. Each long term care pharmacy allows GrandView to have strategic locations to conveniently and efficiently serve Indiana and bordering states.
In 2015, GrandView consolidated operations focusing solely on long term care, rebranded as GrandView Health Services, and moved the headquarters into a new modern facility. Consolidating various companies under one roof allowed for expanded operations, and improved overall efficiencies. This new location also provided the additional space needed to open a state-of-the-art compounding pharmacy, which will increase the capacity to serve the aging community population, and those searching for custom medication solutions. “The new compounding pharmacy allows us to make medication that are personalized for an individual patient’s need. With the ability to produce compounded medications, our pharmacists are able to help a wide variety of patients whose needs are not currently being addressed by your traditional oral or topical medications,” said Glenn Eldridge, RPh, and Chief Operating Officer for GrandView Pharmacy. The new facility also houses the entire medical equipment operation, which includes an expansive medical equipment inventory along with oxygen, and respiratory care equipment. Jared McCullough, VP of Medical Equipment, said “A centralized location along with increased inventory capacity allows GrandView to reduce costs for the senior care community through streamlined order processing and delivery systems.” GrandView strives to remain a leader in the pharmacy industry through progressive leadership, innovative technology, expansion philosophy and expert staffing. We will hold steady to never forget our neighborhood pharmacy roots and the expectation of great personal service that comes from an independent, family-owned pharmacy partner. Why do senior care communities choose GrandView Pharmacy? »» Improved Medication Outcomes
»» We’ve developed a comprehensive drug formulary and healthy living protocols specifically designed for seniors. »» Decrease Pharmacy Related Errors »» Our quality assurance and technology based solutions enhance patient care and improve nursing efficiencies. »» Reduce Hospital Readmissions »» Our turn key transition of care program for post acute care is designed to reduce readmissions and keep you compliant. »» Reduce Pharmacy Related Expenses »» GrandAdvantageTM helps manage costs and reduce financial liability. »» Customer Service A dedicated account team resolves any problems quickly and ensures customer satisfaction. We enjoy the opportunity to genuinely improve the quality, and quantity, of life of the seniors in our communities. It is also really rewarding to speak to the facility staff who have struggled with other providers and see their gratitude to work with someone who has extremely solid operational processes to ensure they have what they need to be successful. Also, the relationship we enjoy with our partner communities and residents are why we continue to improve our processes and outcomes continuously. “In our opinion,” said Mark Prifogle, CEO, “the pharmacy industry is heading toward a value-based dispensing and cognitive services business. The dispensing element of pharmacy, which has driven our industry for the foreseeable past, will give way to evidence-based, outcomes-generated payment models where the dispensing is secondary to the clinical oversight and interventions of the pharmacotherapy specialist. We are talking about more
than MTM, but a co-professional to physicians where the physician, or other prescriber, is responsible for diagnostics and the pharmacist selects the treatment modality and oversees the outcomes and adjusts, as necessary, based on observations and test results of the patients they are responsible for caring for.” Population health management will be the primary shift in the regulatory and payer environments over the next five years. Home and community-based services, especially in light of siteneutral payment structures promised by 2023, will be where the growth in this industry will largely reside. Pharmacies that can push out beyond their four walls and be an engaged health practitioner in “the field”, will see huge growth opportunities. As for our advice, be ready to prove yourself – meaning, know your data and how it relates to the rest of the health care ecosystem. It’s more than just your EQUIPP scores, but collecting, aggregating and presenting how YOUR approaches improve health and financial outcomes, should be part of your business plan. Most pharmacists think about “how to get more ‘scripts’”, especially in a startup, and while this is necessary to keep the lights on, for now, understand this is something that will be changing dramatically over the next 8 years. About GrandView Health Services GrandView Health Services is an independent pharmacy provider for long-term care, and elder residential communities. We have built our business on a culture focused on evidence-based practices, resident centered education, outstanding staff, and structured systems. However, our philosophy is that we can always improve, and that ongoing pursuit for perfection helps us to create better systems. We strive to be the best, provide superior service to our customers, and produce positive resident outcomes.
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Pharmacists, Check Both Exclusion Lists!
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n today’s extremely regulated pharmaceutical industry, it’s very important to know who you’re employing and who your vendors are. As if pharmacists aren’t busy enough, you are now required to do a monthly check of all employees and vendors to ensure none of them are on either government excluded list. Most pharmacists are familiar with the OIG (Office of Inspector General), so that is the more popular website for doing exclusion searches. The other is the System for Award Management (SAM.GOV). It’s imperative for pharmacists to check both websites, as there are many entities that are on one list, but not the other. Medicare Part D auditors such as Catamaran (now Optum Rx) have been very busy conducting audits of pharmacies and hospitals. The government views pharmacy auditing as an easy revenue generator, and their plan is to increase the amount of audits. Part of their auditing process is to identify all employees and vendors, and pharmacies must prove that they have a procedure in place to ensure that no employees or vendors are currently excluded. A pharmacy can face very serious fines if they are found to be employing an excluded individual or using an excluded vendor. Many pharmacies could not withstand such large fines, and the worst part is, there is no appeal process. The way the government sees it, if you’re receiving any Medicare funds, those funds are not to be used to pay an excluded party. It’s impossible to determine whether or not an employee or vendor is being paid with those federal funds, so the government considers ANY payment to an excluded entity to be unlawful. The addresses for the websites are: https://exclusions.oig.hhs.gov/ and https://www.sam.gov/portal/ SAM/##11 They are very similar and easy to use, with search features to enter in all employees and vendors. It’s important to remember that when searching the name of a vendor, sometimes the vendor’s corporation name will come up, not the DBA name. The easiest way to confirm that the corporation is your vendor, simply check that the addresses of the corporation and the DBA are the same.
Most pharmacists who check for excluded entities remember to check all of their employees, but don’t check all of their vendors. When checking vendors, be sure to include everybody from a contractor you plan on using once, such as an electrician or a plumber, to your reverse distributor (expired returns company) who you may only use once or twice a year. One of the big differences between the OIG and SAM is that the OIG requires a conviction of a crime before placing an entity on their excluded list. SAM does not require a conviction of a crime, they may choose to exclude an entity based on “adequate evidence of conduct indicating a lack of business honesty or integrity, or a lack of business integrity, or regulation, statute, executive order or other legal authority, pending completion of an investigation and/or legal proceedings.” This is very important, as most pharmacists assume that an entity must be convicted before it is placed on an excluded list. For those of you who don’t have time for any of this, you may choose to hire a compliancy consultant to do exclusion checks for you. Remember that the compliance consultant is only as good as the information you give them. If you don’t give them a thorough vendor/employee list, they can’t do a complete exclusion check. It’s easy to forget the vendors you don’t deal with every day or every week. Obviously, an excluded entity is not going to tell you they’re excluded, so it’s up to you learn more about who you’re doing business with….and be sure to check both websites!
UNITED Rx SOLUTIONS
78 Crossways Drive East ∙ Bohemia NY 11716 [P]844-741-9718 [F]631-319-1340 www.unitedrxsolutions.com
United Rx Solutions is a reverse distributor for expired medications. For more information about exclusion lists, or if you need us to handle your expired medications, give us a call at 844-741-9718. We are definitely NOT on any excluded lists!
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18000 Studebaker Road, Cerritos CA, 90703
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