Becker's Hospital Review

24 CFO / FINANCE Grocery store pharmacies finding it harder to stay in business By Maia Anderson M ore grocery store pharmacies are closing as the healthcare in- dustry consolidates, and retail pharmacy giants like CVS and Wal- greens continue to dominate, The Wall Street Journal reported. Grocery store pharmacies gained popularity in the 1980s and 1990s as they showed easy profits and had relatively low startup costs. But pharmacies in grocery stores are typically too small to negotiate com- petitive reimbursement rates on drugs, aren't connected to big medical networks or payers and typically don't have walk-in clinics and other ser- vices that big retail chains offer. The number of grocery pharmacies fell in 2017 for the first time in years, from 9,344 in 2016 to 9.026 in 2017, according to data cited by the Journal. Big grocery store chains like Target are even finding it hard to stay in busi- ness, as Target sold its pharmacy business to CVS Health five years ago. Customers are more likely to get 90-day supplies of their prescriptions now or to get their prescriptions delivered in the mail, which may bring less foot traffic to the grocery store. Big retail chains such as CVS and Walgreens now also offer blood testing and chronic disease management, which grocery stores typically cannot afford. CVS and Walgreens accounted for more than 40 percent of prescription revenue in the U.S. 2018, according to the Journal. They also either own or have partnerships with the country's biggest insurers and pharmacy bene- fit managers, so they're able to negotiate better drug prices. One benefit for grocery stores is that customers who use the pharmacies tend to spend more money at the store overall. Kroger finance chief Gary Millerchip told the Journal that its pharmacy shoppers tend to be more loyal and spend three times as much as customers who don't use the pharmacy. n CMS: Changes to prior authorization coming this year By Morgan Haefner C MS will prioritize changes to prior authorization this year to reduce administrative burden and improve healthcare innovation. At the American Medical Association National Advocacy Conference in Wash- ington, D.C., Feb. 11, CMS Administrator Seema Verma said she acknowledged frustrations, both from patients and physi- cians, around the prior authorization pro- cess. She tied the process, which insurers argue is needed to shield patients from harmful and unnecessary treatment, to care delays and physician burnout. Ms. Verma said looking at ways to automate prior authorization is a "priority" for CMS. The agency has conducted 35 listening ses- sions and has more than 2,000 stakeholder comments on prior authorization. While Ms. Verma didn't go into the details of any changes, she told attendees: "The Trump administration is once again ready to take action to support doctors and pa- tients. We will reduce administrative waste, increase patient safety, and free physicians to spend time caring for their patients." n McKesson could lose wholesale license over 'excessive' opioid orders to children's hospital By Maia Anderson C alifornia's pharmacy board is accus- ing McKesson of selling an "excessive" amount of controlled substances to a San Diego children's hospital and wants to re- voke or suspend its wholesale license for one of its facilities, STAT reported. According to the board's complaint, starting in the fall of 2017 McKesson began distribut- ing to Rady Children's Hospital in San Diego much larger quantities of two controlled sub- stances, Phenergan with codeine syrup and the anxiety drug Xanax. e shipments of Phenergan were allegedly 40 percent to 80 percent higher aer Sep- tember 2017, and the shipments of Xanax in- creased 250 percent to 275 percent. e pharmacy board said McKesson should have known t he quantities of drugs were not typical for pediatric patients, STAT reported. McKesson allegedly began increasing the ship- ment quantities because a pharmacy techni- cian at the hospital was stealing the drugs, the complaint said, but the board said the increased quantities ordered were still unjustified. e board seeks to either revoke or suspend McKesson's wholesale license for its facility in Santa Fe Springs, Calif., STAT reported. McKesson did not respond to Becker's Hospital Review's request for comment by the time of publication. e complaint is one in a series of legal trou- bles for McKesson, which agreed in January to a $175 million settlement to resolve claims from its investors that directors ignored sus- picious opioid shipments. In January, Oklahoma sued McKesson, Car- dinal Health and AmerisourceBergen, alleg- ing they funneled "unreasonable" amounts of opioids into the state. n

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