New Avalere Health Study Details Stark Differences Between LTC and Retail Pharmacies

DATE: October 20, 2015

Compared to Retail Pharmacies, America’s Long Term Care (LTC) Pharmacies Have Significantly Greater Clinical, Operational, Legal and Federal Regulatory Requirements

Washington, DC – Continuing its focus on America’s growing long term care (LTC) pharmacy sector as detailed by a new Avalere Health study, “Long-Term Care Pharmacy: The Evolving Marketplace and Emerging Policy Issues,” the Senior Care Pharmacy Coalition (SCPC) today spotlighted the major differences between LTC pharmacies and more commonly known retail pharmacies. The new study constitutes the most detailed analysis of the U.S. LTC pharmacy sector since Medicare Part D was implemented in 2006.

“Among our key missions at the SCPC is to ensure federal lawmakers, staff and regulators come to better understand the stark difference between LTC and retail pharmacies — and how the demonstrable value of LTC pharmacies’ medication therapy management and unique clinical offerings help advance high quality care and Medicare cost-savings,” said Alan G. Rosenbloom, President and CEO of SCPC. “LTC and retail pharmacies both fulfill important roles in the health marketplace, and we intend to ensure the greater operational, legal and regulatory requirements borne by LTC pharmacies are better known and understood.”

Says the Avalere Health study:

“Distinct from more commonly known retail pharmacies, LTC pharmacies are not open to the public and do not sell convenience items. With no ancillary income streams, they rely solely upon revenue from dispensing prescriptions and providing consultative services. LTC pharmacies also have higher operating costs due to a myriad of legal and regula­tory mandates. In particular, the National Community Pharmacists Association (NCPA) estimates that the cost to dispense for LTC pharmacies is 25 percent more than retail pharmacies.

“The process to dispense medications differs substantially from retail pharmacies, which provide medications directly to consumers after confirming payer coverage. In contrast, LTC pharmacies must coordinate with the facility, provider, and payer to review each prescription, compare against known medications, verify coverage, meet rigorous packaging and delivery requirements, and stand ready to deliver medications at all times.”

Further, the analysis states, LTC pharmacies must comply with extensive Medicare and Medicaid Conditions of Participation, meet state licensing and related requirements pertaining to LTC services, and satisfy other regulatory and professional practice standards. LTC pharmacies must incur these costs to meet their three primary objectives:

• Maintain responsibility for a wide array of pharmacy services for residents in skilled nursing facilities (SNFs) and assisted living facilities (ALFs).
• Facilitate and support regulatory compliance by LTC facilities, particularly related to patient safety and drug administration efficacy.
• Offer an efficient and effective method to protect vulnerable patients and improve the quality of their care, especially given that LTC facility residents are high utilizers of prescription medications.

For additional detail on the differences between LTC and retail pharmacies, click here to see the Avalere Health study.