Name: Donald H. Fowler
Position: executive director, Rhode Island Pharmacists Association
Background: President, Greater Woonsocket Chamber of Commerce, 1987-1991; vice president, Greater Providence Chamber of Commerce, 1980-1987; executive director, East Providence Chamber of Commerce, 1978-1980; community development citizen participation coordinator, city of Cranston, 1977; director of outdoor programs, district executive, director of Yawgoog Scout Reservation, Narragansett Council, Boy Scouts of America, 1965-1976; district executive, camp director, Quinnipiac Council, Boy Scouts of America, New Haven, Conn.
Education: University of Delaware, Institute of Organizational Management, 1982; University of Connecticut, bachelor of arts degree, 1960.
Age: 62
Residence: Cranston
Family: Married, two children, three grandchildren
DONALD FOWLER: ‘One of the major jobs of the Pharmacists Association is to get everyone on the same sheet of music.
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PBN: What issues is the association working on?
FOWLER: The first thing we try to do is promote the profession. What we get involved with too much sometimes is a knee-jerk reaction to a legislative bill that somebody might put in that would restrict (the practice of) pharmacy and what we’re trying to do. I’m a lobbyist; I’m up there too often, working on behalf of pharmacy. The difficult part (for pharmacists) is the professional issues versus the economic issues. I was with the chamber for 15 years and left to do this, and thought, ‘Oh great, now I’m dealing with one profession: Pharmacy.’ With the chamber it was manufacturers and small business, and everything you can think of, who are often at odds. But now I’m just dealing with pharmacists. But then you find out that there’s the independents, the chains, the hospitals, the consultant pharmacies who consult with nursing homes, pharmacists who work for pharmaceutical companies, and everybody has their hot buttons. And so one of the major jobs of the association is to try to get everybody on the same sheet of music on a professional level while understanding the differences. And that isn’t always easy.
How many members do you have?
We have about 570, but about a hundred of those are students. About half of the practicing pharmacists belong, and that’s pretty normal for this association. Most associations will get about half the members. In the old days, when it was mostly independent pharmacies, they all belonged. They still all belong. Every independent in this state belongs. Now, with the shift away from independent pharmacy to chain pharmacy, the chains belong. But we are technically a professional society. Technically, CVS doesn’t belong. The CVS pharmacist belongs.
From what I understand, different groups, such as hospitals, the federal government, and pharmacies pay different prices for the same medicines. Why does this occur?
My business background was always very simple: Somebody set a price, you negotiated, you bought, you sold. Pharmacy is so complicated. Our problem with the pharmaceutical companies is that they practice what we call discriminatory pricing. They call it two or three-tier pricing. Retail pharmacy pays a certain price to the wholesalers for a particular drug. The pharmaceutical company sells those drugs to hospitals for a different price – for a lower price – sells it to the VA, the VA gets I think the lowest price, government gets a low price, and then in many cases there are now what we call Pharmacy Benefit Management firms who negotiate prices with business. They (big businesses) will negotiate a price, and that price unfortunately for us, sometimes comes down to a contract that will exclude some pharmacies. That leads to the other major issue that has divided the pharmacy community, which is called ‘Freedom of Choice,’ or ‘Any Willing Provider.’
The pharmacists association is 125 years old. And when it was formed, it was formed mostly of independent pharmacists – the corner drug store, the family business. And there were over 200 independent pharmacies; there was one on every street corner. And then came the evolution of the chain pharmacy. Of course in Rhode Island, the dominant force is CVS. We forget, this little state has the biggest pharmacy chain in the country centered right in Woonsocket. The chain became the competition for the independent pharmacy, and the chains in many cases were able to sell their medications a little cheaper because of volume. That takes us back to pricing: Because you can buy more you can buy it for less. And so that was the competition, chain v. independent. And that was okay. They were both able to survive.
But then things got more complicated. In the old days, people went in, put down their money, and bought their prescription. Nowadays, there are very few people that come into drug stores and reach into their wallet and pay. Everything’s third party. Most people have insurance through their business, or private insurance. And so in that case, the business community, rightfully so, wants to keep their costs down. And so they negotiate now with companies (HMOs) to get either an exclusive contract or a limited contract so that they can get the volumes in their store. That brings us back to Freedom of Choice. CVS, Brooks, with their large, large volume are able to bid on contracts. So, for a while in this state, CVS had certain exclusive Blue Cross contracts. Brooks had United Health contracts. The independents fought vigorously for Freedom of Choice – you as a patient should be able to go to any store you want to get that medication. The insurers, the business community, said, ‘No, we’ve got to control our costs.’ And if they can go to any store, their theory was: It’s going to be a higher price. If we can negotiate with one chain we can get a better price. So that became the battle between the independents and the chains. A couple of years ago there was a peace treaty, where CVS said to Brooks and the independents: ‘We’ll let you in our network, if you let us in your network.’ And so they negotiated prices, and everybody was happy.
And then along came Walgreen and Stop & Shop, and (they) said, ‘Wow. Time out. We want to get in this contract.’ And so there were bids sent out, and they did not get the contract. So now you’ve got Brooks, CVS, and the independents, who have a number of the contracts in the state. And Walgreen and Stop & Shop, who don’t.
So it’s very complicated. I think in a perfect world we should have freedom of choice. You should be able to go to any place you want and get your medication.
Why are drugs becoming more expensive?
I was at a meeting last night where there were a couple of figures thrown out. Ninety new drugs went on the market last year. Go back in the past – if 20 new drugs came out, that’s a lot. There are 6,786 prescription drugs on the market. That’s overwhelming. Now, the reality is that there are probably 20 major drugs that people use for arthritis and depression.
The pharmaceutical companies will tell you it (the rising cost is) because of all the money they have to put in research and development of new drugs. Which is true. The pharmaceutical companies last year spent $20.5 billion (developing) those 90 new drugs. The cost of prescription drugs in 1998 rose 17 percent. That’s high. Last year, drug companies started going direct-to-consumer advertising. That’s brand new. Last year they spent over $2 billion in direct-to-consumer advertising. What the drug companies did in the past was, they did it all through the doctor. They had pharmacy reps who come into the doctor’s office, drop off samples – and they still do this – and the idea was to educate, influence the doctor on why their drug was better than any other. And just in the last couple of years, they took that message directly to the consumer.
If research and development costs are the primary reason the cost of drugs is on the rise, why are the costs going up so much now? Haven’t the R&D costs always been there?
That’s a question I can’t really answer. Certainly the advertising is some of it. And certainly, there’s got to be cost shifting. Somebody’s got to be paying for the drugs they’re practically giving away to government entities, the VA. So when you have discrepancy between what a retail pharmacist is paying and what the Native Americans (pay), you go down to Foxwoods, Native Americans have an incredible drug program that started out for their employees and their people, and now has expanded into a large mail order network, and they are competing for contracts, because they’re buying this stuff cheaper.
So they’re able to negotiate a better deal with the pharmaceutical companies?
That’s right.
And because of this discrepancy among what different groups are paying, you believe there is some cost shifting?
There has to be. AARP has the largest mail order drug program in the country.
How large is the mail-order market?
It’s less than 10 percent of the market. It’s relatively small, but it’s growing. It’s absolutely growing. But mail order is old news now. Internet, that’s the big thing. And there’s a concern about the loss of human contact. Pharmacists are health care professionals. They’ve gone to school for six years, they know more about drugs than doctors – it’s what they do. And for too long people in government have thought of pharmacists as pill counters. The term is, ‘lick, stick, count, and pour.’ That was the conception that a lot of people had of pharmacists. But the reality is, the pharmacist’s skill is counseling the patient. ‘How do I take that medication? When do I take it? What will happen if I take this pill with that pill?’ That’s the value of the pharmacist.
Do you have other concerns about ordering drugs through the mail or the Internet, in addition to the loss of human contact?
You can order Viagra, and you never have to see a doctor to get a prescription. You punch in some keys on the Internet and a doctor, whoever that doctor is, asks you a few questions, and you can actually get a prescription over the Internet. That’s being questioned in Congress, and rightfully so.
Let’s say you go to your doctor and you get a prescription for a medication, and then you can order over the Internet. There are legitimate companies that now are doing what mail order did. And within a certain number of days they will send you your medication. Our big problem with both mail order and the Internet is the human contact. We see the value of the pharmacist as a health care provide who can counsel the patient eyeball to eyeball. If you’re on a drug that you’ve been on for 10 years and know how to take it, maybe that’s not necessary. But there comes a time when you’ve got to talk to your pharmacist. Our common line is, ‘When you get drugs through the mail, who are you going to ask the question to? The mailman?’
I think you’re going to see health care changing over the years where the emphasis has to be more on the counseling than the product. Now, there’s great resistance to this from our friends in the insurance industry who don’t want to pay. Right now, we’re working on a big program on tobacco cessation counseling. We are training pharmacists on how to counsel you to stop smoking. And we have the assistance of the pharmaceutical companies on this because they have products. We have a grant from the Department of Health to do this, and it’s working quite well.
But don’t some drug stores sell cigarettes?
The great controversy, to be very honest, is many times in pharmacies in the front of the store sell cigarettes. And we have a campaign going to try to convince pharmacies not to sell cigarettes. And we’ve been successful. Someday, maybe we’ll convince a major chain not to do (sell) cigarettes.
And their argument is – and it’s justified – is that it’s (cigarettes) a moneymaker for them, and it’s not done in the pharmacy, it’s done in the front of the store. And when you go to the pharmacy you won’t see any advertising or any tobacco products. But it is something that we would like to see changed someday.
And here’s the other thing: Pharmacists are both professional health care providers and business people. And the toughest thing about my job is trying to get them to separate the two. And it’s tough. That pharmacy says, ‘Look: I’m getting killed by mail order. I’m getting killed by the chains. It’s tough to compete; I need to supplement my income.’
What trends do you see in the pharmacy industry?
The latest trend in pharmacy now is to reimburse pharmacists for counseling, for pharmaceutical care, to build that into the health insurance cost. Pharmacists in most cases have a very low margin on medication. They pay a lot for it. There’s overhead. They have all the expenses that any business person has, with a small market. Which is why a large chain has an advantage over a small independent store because it’s what we call the Front of the Store: The greeting cards, the candy, the over-the-counter medication that you don’t need a prescription for, there’s a larger markup there. They really make a very small percentage of their profit on prescription medication.
Is the ‘pharmacist as counselor’ the future of the industry?
There are people looking ahead who say, ‘Pharmacies are going to change.’ If we really are committed to pharmaceutical care, to disease management, then someday, the pharmacy of the future will probably go back to the way it was a hundred years ago, an apothecary, where only health care is done. And that could happen. Pharmacists are now being trained in diabetes. There’s a big program in this state through the Department of Health in diabetes management. And so what pharmacists say is, ‘We can show people how to check their blood, and we can manage their disease through medication, but the time that it takes to do that we need to be reimbursed.’ And, if the insurance company was smart, they’d reimburse us, because by us helping them with medication, we’ll save the cost of hospitalization. People say, rightfully so, ‘Drugs are expensive.’ And they are. But they’re a hell of a lot cheaper than somebody ending up in a nursing home or a hospital. So if you put the whole cost of medication in perspective, it’s still the best deal in health care.
