Independent Pharmacy Accounting, Pharmacy Growth

Pharmacy Advocacy: Going Beyond Patient Care for Your Community

Join us in this engaging discussion as we delve into the world of pharmacy advocacy and its impact on communities.

In this episode of The Bottom Line Pharmacy Podcast we discuss the NCPA fly-in event, where independent pharmacy owners from across the nation gather in Washington, DC to advocate for independent pharmacies. Discover how these passionate professionals go above and beyond patient care, becoming advocates for their communities by addressing issues such as DIR fees with Fred’s Pharmacy owner Cole Sandlin, PharmD. Stay informed, be inspired, and learn how you can make a difference in your own community.

The Bottom Line Pharmacy Podcast is your regular dose of pharmacy CPA advice to fuel your bottom line, featuring pharmacists, key vendors, and other innovators.

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If you prefer to read this content, the video transcript is below.

Scotty: All right. Tell us about that fly-in in Cole. What was that all about?

Cole: So, you know, this is actually the first time since 2019 NCPA had their fly-in.

Bonnie: Oh really I didn’t realize that.

Cole: Due to COVID.

Scotty: And we were going to go that year, by the way, 2019, we were scheduled to go.

Cole: They have it every year. You know, it’s usually like a two day event. But, you know, of course, 2020 was COVID. Then the restrictions after January 6th getting inside the office buildings and inside the capital for 2022, we’re still so stringent that that’s one reason they didn’t have it in 2022. And so it was great to be back to see everybody, you know, people that aren’t familiar with the fly-in. It’s something that NCPA does every year where independent pharmacy owners come to Washington, DC. There are speakers in the morning and then you make hill visits in the afternoon.

Bonnie: Well, I have a crazy question.

Cole: … What’s that?

Bonnie: Was the word or the phrase DIR fee mentioned at all?

Cole: Just a little bit, we, you know, we’re finally getting some of the staffers educated on DIR. Some of the newer people. So in Alabama we have a new senator and we are having to go back to DIR 101 with her.

Bonnie: That’s tough. Yeah.

Cole: And that’s the thing. A lot of people don’t know this, so DIR was put in originally in 2003 as a way to keep premiums down. DIR has always been in Medicare Part D. It’s not something that they just stuck in after 2010. It’s just lately that the PBMs have figured out a way to use it to their advantage and doing the claw backs and stuff like that. So some people are not familiar with the fact that DIR was in their original bill to keep premiums low. And that’s you know, kind of until after 2010 and it was kind of a thing you didn’t even know because, it really wasn’t used against us or to the advantage of the big three.

Scotty: Then they saw what it can do and they were like “oh boy.”

Cole: Yeah. And you know, I wish I had the numbers in front of me but there was a 33% increase in DIR from maybe 2021 to 2022 and it was like 8 billion to 11 million.

Bonnie: I believe it. We definitely see it in the numbers for everybody. The increase there.

Kendell: Yeah all across the board.

Cole: And so, you know, of course DIR is going away. Hold on let me go back on that because Mr. Steve Giroux from New York would really correct me on that. DIR is not going away 1/1/2024. This will all be at the point of sale. So any cost savings or anything like that will be passed on to the point of sale customer I’m sure y’all have touched on that topic.

Scotty: Just a little bit.

Cole: A lot of people are calling it the cliff. The DIR cliff.

Scotty: That’s probably an appropriate term, I would say.

Cole: Yeah. When we were in Washington, each state kind of gets together and makes appointments with their United States representatives and their senators. Obviously, some of the states are larger than others. So it’s hard to get to everybody. In the great state of Alabama, we’re kind of small. So we only have nine districts. But the two bills right now that have been introduced on both the Senate and the House side that we talked about, the first one is, is a Medicaid spread pricing managed care Medicaid bill. It’s Senate Bill 1038 and House Bill 1613. So, managed care Medicaid, that’s not something that we have in the state of Alabama. What we do is AAC (Actual Acquisition Cost) plus a 1064 fee. Some states have that. Some states still have managed care, Medicaid. And so this bill kind of prohibits the spread pricing that that goes on at that state level. And I think it requires the PBMs to report some things back to the government on that. And so, you know, there’s a lot of talk about moving to a cost plus model, even on the Medicaid side and on the Medicare side, the biggest problem is getting that true cost. Now usually in the state of Alabama, we’re behind on things, but we’ve actually been doing this good for a long time. So in our state every two years, the law requires that you have to report your cost. You’ll get a letter in the mail that certified mail that says you need to send in your invoices. It’s easy to do. Call your wholesaler or whoever and send them in. So that’s how our actual acquisition cost is calculated. You know, there’s talk about NADAC. NADAC is everywhere. Could be high, could be low. But that’s all we have. There’s talk about is taking that out good is taking NADAC bad. So you know that’s kind of the first that they’ve talked about so far this year.

Scotty: So when you’re sitting down with these representatives and senators and such, how engaged are they? Do you feel like you’re getting anywhere when you sit down with them? I’m sure they can, you know, they’re politicians, they’re good at, you know, nodding their heads and smiling at you. But do you really feel some things are moving there?

Cole: Well, so, you know, most of the time you’re meeting with a staff member. Usually in our line of business, it’s going to be the staff member that serves for all the health relations that that congressman or senator or Congress lady has. And so building that relationship with that person first is going to get you in the door. Their schedules when they’re on the Hill, the congressmen, or senators are just insane. So sometimes you might get to meet with them actually, sometimes not. I think this year we got to meet with a majority of ours. But, you know, it’s getting to that staff member and educating them because that’s the one. It’s crazy, but Washington is ran by a demographic of 23 or 24, 25 years old to 30. All the staffers are young and those are the gatekeepers. And so you’ve got that age group in Washington, D.C., practically running the country.

Scotty: What goes in?

Cole: So that’s always an interesting thing. A lot of them are engaged in our state. A lot of them are willing to help us out, sign on whatever bill we ask them to and we greatly appreciate that. But right now, there is a lot more talk and action in DC on PBMs. In Kentucky, Congressman Comer, I think he is on the oversight maybe chairman of oversight has had a lot of hearings on PBMs and wanting to know what’s going on. So we’ve really appreciated his support. He actually spoke the first morning at breakfast at the at the fly-in, so we really appreciate his support.

Scotty: Yes, it’s hard. Just getting everybody to rally around it at the same time, given all the moving pieces that are going on is hard.

Bonnie: It’s to educate. I mean, it’s hard. Like you mentioned, you get it. You finally get somebody understanding what’s going on and then, somebody else is elected and takes their place and then you have to kind of start over, it seems like.

Cole: Well, and actually, probably what I’m, you know, what’s most hopeful and what I’m most excited about is the FTC is doing a what they call a 6b study on PBM practices. You know, 6b could also stand for a colorectal exam. I don’t know hopefully on these PBM practices. And so they’re just looking into the vertical integration that’s going on. They’re looking into DIR. The chair lady Khan spoke at NCPA in October, wherever we were. Where were we?

Scotty: Kansas city wasn’t it.

Cole: Yeah, KC.

Kendell: Yeah, I remember that.

Cole: And you know, that was probably one of the most refreshing things that we had ever heard. And then another one of the commissioners spoke at the fly-in, Bedoya, and he’s actually, his wife’s or his father-in-law was a physician in Louisiana and has really educated him on when there’s a hurricane in Louisiana independent pharmacy is the first one back open, back up. We are the health center for a lot of these communities. So the FTC’s kind of taken a backseat. They kind of taken a hands off approach all these years. Because they felt bigger was better. Back in maybe 2000, nine or ten, we actually had the FTC, Commissioner Liebowitz, and we had a hearing with some patients on the Caremark and the CVS merger, which obviously didn’t go anywhere. But we’re hoping this study is going to help, you know, shed some light. And, you know the FTC are the enforcers. They don’t have to wait on laws. They can you know; I can’t remember what it was a couple years ago that they blocked AT&T and somebody from merging. They can go and say, hey, this is what you’re going to have to do. So we’re really, really hopeful about kind of what that’s going to be. The study started this past summer, and so we’re just kind of waiting for the results. But you know what the two commissioners spoke, it’s almost like we scripted it for them. It’s exactly what we wanted them to say. They understand what we’re having to go through.

Scotty: So when is that set to be… Any timeline on it?

Cole: You just don’t know. It’s one of those things you sit and wait and it could go a lot of different ways. And you’re optimistic about it but just like anything else. We’ve had some things that made it to the 11th hour and even the DIR rule, they got an extension on that. Because it took them so long to fix how they’re pricing these drugs.

Scotty: And come up with the next idea.

Scotty: Give them a year to figure out how to replace that income.

Cole: Well, I don’t think specifically the big three PBMs have sent out a lot of contracts yet. Usually by now we’ve seen them for 2024. So that’s kind of scary. Now, I have heard some have been sent out and they are way off from what we can afford to take. Not to scare people that might listen to this, but I think there’s going to be a lot of conversations with patients and open enrollment could be insane. It could be, “hey, I’m only taking these couple of plans.” It could, it’s going to be different. It’s going to be a big change. Y’all will see a big change on your side of the equation.

Scotty: Yeah, it’s going to be interesting, no question about it.

Bonnie: On a lighter note, I did love, when I saw some pictures of the fly-in that you are breeding another advocate for independent pharmacies. Looks like you took your daughter Molly with you guys.

Cole: I did. I took Molly with me and she had a big time.

Bonnie: She was looking sharp in her suits.

Cole: She got up every morning, curled that hair really, really good.

Scotty: That she’s eating it up.

Cole: That didn’t cause us to be too late each morning. But she had a big time. We were eating supper on Wednesday night and she was… There we are right there. We were eating supper on Wednesday night and of course it’s been three or four years since we’ve had a fly-in and she’s like, “Dad do y’all do this every year. I’m like, yeah. She goes, Okay, well, I’m coming next year. Well, I said. I mean, come on. But hey, go back to that. To the picture before. So that is actually Congressman Gary Palmer, which is actually Jill’s uncle.

Bonnie: Nice.

Cole: So he represents the sixth district in the state of Alabama, which is around Birmingham, south of Birmingham. And then it wraps back around to the top of Birmingham. So Molly got a little extra VIP treatment, with him.

Bonnie: It looks like it. Yeah.

Scotty: She looks like she belongs right there.

Bonnie: How old is she Cole?

Cole: She’s 12.

Bonnie: Nice.

Cole: So we got there Tuesday and she went with him down to the House floor and we got to stay up in the gallery and watch because, of course down there there’s no cell phones, couldn’t take any pictures, so we have no proof. But she voted for the two bills that were being voted on that night. She did the actual voting and she said she voted for somebody else. Didn’t know who it was. But she got to meet a lot of different congressmen, men, and women on the floor that night, which was you know, that was a very unique experience.

Bonnie: I mean, in all the pictures, she seems to be more front and center than you are. You’re kind of like stuffed in the back, further down the table.

Cole: I try to lay low. I told her I think that the next picture that you have, not that one but the next one, that’s with Katie Britt who is the new senator in Alabama first female senator we ever had. So Gary got, you know an appointment for Molly to meet her. And when I introduced myself, I said I am just the dad trying not to embarrass her. You know, I’m trying to stay back. But that was a neat experience.

Bonnie: Johnathan

Cole: Y’all might know these two gentlemen.

Bonnie: Jonathan, yeah.

Cole: And so she had a big time. I knew when she went she might…

Bonnie: That guy.

Cole: She might not want to come back.

Bonnie: Nice. And she’s so shy, you know, I know it was really hard for her.

Cole: Right, very shy not very outspoken

Kendell: Not a shy bone in the body.

Scotty: We might have to hire her for the tradeshow booth.

Kendell: I think she did bring some pharmacists over.

Bonnie: She did last time.

Kendell: Yes, I think she did. She was like, y’all need to meet Sykes.

Cole: Yeah. I didn’t tell her about this podcast this morning. She goes, So you’re like checking me out of school aren’t you.

Bonnie: No we’re going to have her on. She’s going to be on by herself. On another episode.

Cole: I said, probably not. She thought y’all were coming here. All of the podcasts that she knows I listen to, everybody’s usually sitting in the same room.

Bonnie: So for anybody that hasn’t been to a fly-in, do you suggest it?

Cole: So I highly suggest it. You know, the people in Washington need to see and hear from us. I think the turnout was really, really good. They’ve already set the dates for next year. I want to say it’s like April 17th and 18th. And I highly suggest anybody to go. I’m going to throw a couple of plugs in for NCPA PAC, their Political Action Committee, making a donation to that. At the at the end of the day, usually the people writing the biggest checks, which we cannot write the biggest checks as an independent pharmacy, but with our grassroots and our PAC and the work that we’re doing with the FTC, hopefully we’ll get some things done. And we also have a legislative defense fund that’s the one that can come from corporate, that can come from your store. Remember, PAC money has to be from an individual. It cannot be from your store.

Bonnie: And those items are not tax deductible.

Scotty: The LDF is deductible.

Bonnie: That one is, yes. The political one is not, just fyi.

Cole: And we would love for you to max out that PAC contribution. $5000 a year. Monthly that comes out monthly to $416.66.

Bonnie: It does. We see that number a lot.

Cole: And so, we really ask that. But yeah, the fly-in is great. If you’re not a member of NCPA, I highly recommend that you join. They are one of the few groups that are looking out for the best for us at all times. Besides Sykes & Company.

Bonnie: Always, for sure.

Scotty: I think it’s no question that NCPA’s been leading the charge. They have been really doing everything possible seems like, from what I’m what I’ve seen.

Scotty: I mean there’s been some changes. There continues to be some bills put on the floor. I mean there’s, you know, things moving.

Cole: Yeah. And the relationships that they have with the people on the hill and actually, we’ve talked all about federal stuff, but there’s a lot of really, really great things going on at the state level. And after the Arkansas Supreme Court ruling, which was 8 to 0. If anybody has forgotten, it was 8 to 0 in favor of independent pharmacy. A lot more people are getting things done on the state level. I serve on NCPA’s state legislative committee, steering committee, and a lot of people- Oklahoma’s getting some really good things done in their state. And I know the state of New York just carved out Medicaid from the managed care. They’re going to a fee, a cost per fee, which is good for them. So a lot of great things are going on at the state level on the advocacy side. So a lot of people are getting things done right now after the ruling on the Arkansas case.

Scotty: And NCPA also has a hand in the state side as well. I’ve been to a few state conferences and they’re leading the charge on the state side too.

Cole: Yes. You know, that’s what it takes. I encourage people to come to the fly-in. If you can’t make the fly-in, invite your representative or your senator to your store. I had my representative in my store a couple of years ago. It was probably before COVID. Let them see, they’ll love it. If they can make it, they’ll love it. They’ll want to take some pictures so they can post them and show people that they’re in the community. And that’s another avenue. If you haven’t and you’re scared about doing that, reach out to NCPA. They’ll help you arrange all that. And I know, just in August, of course, I know they’re in the district a lot, but I know in August everybody’s home for the whole month. And do you know, a little Washington, D.C. trivia, do you know why they take the August break or why they do the break in August?

Bonnie: I do not.

Cole: Because back in the day, there was no air conditioning. It was so hot. They took off that month. So they didn’t, so they didn’t sweat to death.

Scotty: Well, half of them went back down south and sweated even more.

Cole: So yeah. And you know, Washington D.C. was built on a swamp. That’s why they’re always saying drain the swamp. Drain the swamp. And so it can get it can get swampy up there.

Kendell: I do have one question; you talk about the cliff with the DIR fees anything you and your pharmacy doing to prepare for that cliff?

Cole: Yes. Right now we’re trying to expand our LTC combo med side. So you know, most people know that are in the combo med business or the LTC business. There is no DIR on that side. Now, the reimbursement will change, I’m sure. Also looking at a couple of different cash models, members only cash model, kind of like the Blueberry pharmacy. Blueberry Pharmacy, I’ve been on the phone with them a lot lately trying to figure that out. I have a line of credit just in case because they’re calling it double dipping. But I’m anxious to see what these contracts are going to be. They’re going to be bad. Whether it’s hours with your employees or cutting back hours in your pharmacy. We’re only Monday through Friday. So I can’t really cut out Saturdays and Sundays right now. Inventory, turning in your inventory as much as you possibly can and not keeping a lot on the shelf. We do a pretty good job of that. So it’s there are some things that you can be doing right now. But, you know, I’m anxious to see what those contracts say. And I know y’all are. And you have all the answers in the book I’m sure.

Bonnie: The great thing is that…

Kendell: The Sykes play book.

Bonnie: Cliff is going to hit you guys right during tax time, too. It’s going to be a fun few months.

Cole: So nobody needs to make any money this year. No profits.

Scotty: Better do some tax planning.

Bonnie: Yeah.

Cole: No profit.

Scotty: You don’t want that cliff hitting you and April, and then you get the call on April 15th from your tax guy saying, I need $100,000 check.

Cole: You got that right.

Bonnie: You’re not going to get a call from us on April 15th with that news. You’re going to know way in advance. That’s what we do.

Scotty: I’ll still get those calls where people. Yeah, I get the call April 15. I don’t like it. I’m like, I bet you don’t.

Cole: But, you know, I’ll put in a shameless plug for the three faces I’m looking at. You know, we became members of Sykes in 2013, and I will never forget this. Scotty, at NCPA in Nashville on the final night party, your dad was sitting at our table. Now this is back when he went to final night parties.

Bonnie: Not anymore. Unless they’re before 8:30

Scotty: After that, that was it. He quit after that.

Kendell: The last one.

Cole: I can remember having a conversation with him and telling him my situation. He fed me with a fire hose…

Bonnie: Oh, yeah. You turn that thing on, there’s no turning it off.

Scotty: So that’s what he does boy.

Cole: of information. And then at NCPA Ownership Workshop in January or February of 2013, he spoke there. Bonnie would you have been at that?

Scotty: That Nashville it NCPA was the first national conference, first or second one we’ve ever been to.

Cole: Really?

Bonnie: Yeah, we were babies.

Cole: But yeah. And that’s, you know, in 2013 we became members of the Sykes family and you know, we have not looked back since. People all the time, call me about yeah I heard you use Sykes. What do you think? Well you know, when you go to a steakhouse do you want the best steak they have? That’s the best steak on the menu.

Scotty: Well we try. We try hard.

Bonnie: You guys are awesome. I mean, not just that you have your store, but you also like we talked about on this podcast today. I mean, all the work I know you do, not just with the fly-in, but all year long with these things, advocating for independent pharmacies and speaking and everybody appreciates that.

Cole: You know, I never really knew that, that there was a political side of pharmacy. In which, really until Part D was passed, which is, don’t talk to me but I could probably get you some folks, but a podcast about Part D and how that was passed and all the different things. But until Part D was passed in 2003, you know, there wasn’t much advocacy for pharmacy, but now that we have Part D and like for example, for me, 51% of my business is this Part D you know, you have no choice.

Scotty: I’m just going to say, I mean, you’re a pharmacy owner now, half your job is advocating, that’s what you got to do.

Cole: We say that you’re either sitting at the table or you’re on the menu.

Scotty: Exactly.

Bonnie: And that is my bottom line.

Scotty: So go to fly-in and start working.

Cole: Start working, making contacts. We tell people if you don’t want to give to the PAC because you’re afraid we might give it to somebody you don’t like. Give it straight to the person. Have them in your store, give them a check. It’s all about handshakes and checks, unfortunately. Building that relationship, letting them know, everybody knows we are the health care center in these small communities and even in the larger communities. But, you know, it was a great fly-in. And it’s good to see people that you hadn’t seen in a while. The NCPA family is a tight close knit family. And, you know, we’re all fighting the same struggles every single day.

Scotty: Well, you guys provide a lot of value and it’s pretty evident, when you speak, when you go out talking about it, it’s clear, you know, the value you guys provide to your communities. There’s no question. So, you know, there’s a lot of opportunity I think in pharmacy.

Cole: And we used to say and we still kind of say it, we’ve kind of changed what we say now. But and,you know, it’s so unfair right now. And I hate to say that because I tell my children all the time, Life’s not fair. Life is not fair. I’m sorry. But, we are such at a disadvantage, we just want to be in the same ballpark where everybody else is getting reimbursed or things like that. Because we will, we can do it better. We can do it better. And I joke all the time pharmacists, nobody works for a penny or a dollar, however you want to say it, harder than us, whether it’s an adjudication, post adjudication, pre adjudication. Whether it’s in an audit or it’s in a star rating or CMR. We’re always trying to get; we’re paid that $1. Are you going to be able to keep that $1? They won’t take it back or take some of it back or give you more. You know, it’s a constant struggle. But I mean, I absolutely, it’s not work to me, I absolutely love what I do. Getting to take care of my community. I tell people all the time it’s, you know, I’m lucky the situation not in I feel like God had this this plan for me to be here to take care of my community, because there’s a lot of times he could have changed my direction. I actually prayed for him to a few times when I was in pharmacy school studying, “Hey, is there something else I need to be doing besides this?”

Scotty: You could have been that NFL quarterback.

Cole: Yeah! But, you know, it’s. It’s a great, great profession, you know. There’s not a more rewarding thing to take care of your community.

Bonnie: Well, Coby we always end these podcasts with kind of your bottom line from everybody. Mine is still going to be, what is it that you said a while ago?

Cole: You’re either at the table…

Bonnie: Or on the menu. Yeah, that’s mine. Scotty you got one?

Scotty: You know, you got to get active. If you’re not getting active you have to as part of your job. Yep. Got to get advocacy going. It’s part of it. That’s my bottom line.

Kendell: That’s the bottom line. I think ya’ll both dropped the mic on yours, but I’d say it’s a lot more than filling scripts. It’s a lot more than just the patient relationship. That’s what I take away from today. It’s a lot of relationships outside of you and the patient. Cole, finish us off.

Cole: You know, independent pharmacy is a very unique profession. And, you know, we fight and we have so many challenges and we have to make so many changes. We’re just, we’re a resilient group and it’s hard for people to understand the challenges that we have. Y’all obviously see it, but, you know, we appreciate our patients. We’re thankful for people like y’all that help get the word out and help us at the end of the day. You know, we’re only as good as the people around us. And so, I guess my bottom line is, yes, get involved, whether it’s at the state level, at the local level, At the state level. We have two pharmacists in Congress right now. You know, run for it, run for a position in your district. Give to the PAC to get involved and be a part of what we’re trying to do because it’s actually bigger than what we are. Like I said the beginning, we’re advocating for our business and for independent pharmacy. But you’re advocating for those people that depend on you to be here, to be at or at your pharmacy every day or the ones that are opening up after the hurricane. You know, they know you’re going to be there. So that’s what we’re that’s what we’re here for.

Scotty: Well said. That’s a daggone good bottom line if I’ve ever heard one. So, Cole, we thank you for joining us today. And we’re going to have you on again in the future. And we appreciate everything you do to support us. And thank you just for being a great, great client of ours. We appreciate that.

Cole: Absolutely. Thank y’all for the opportunity.



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