Dear Dr. Rogers:

The National Association of Chain Drug Stores (NACDS) is pleased to respond to your request for comments on the study being conducted by the Department of Health and Human Services to determine whether a shortage of licensed pharmacists exists.

NACDS membership consists of more than 145 retail chain community pharmacy companies operating over 32,000 community pharmacies. Collectively, chain community pharmacy comprises the largest component of pharmacy practice with over 94,000 pharmacists. The chain community pharmacy industry is comprised of more than 19,300 traditional chain drug stores, 7,800 supermarket pharmacies and 5,300 mass merchant pharmacies. Chain operated community retail pharmacies fill over 60 percent of the 3 billion prescriptions dispensed annually in the United States.

For NACDS members, the shortage of licensed pharmacists that exists in almost every area of the United States threatens our goals of providing convenient, accessible, cost-effective pharmacy services. Our ability to expand these services given the significant increase in demand projected for prescriptions and pharmacy services will be hampered if steps are not taken to increase the supply of pharmacists and enhance the efficiencies of the prescription delivery process.

We believe that this pharmacist shortage has significant implications for public health. An aging population will be taking more complex and expensive medications, and will require more extensive personalized pharmacy services, not fewer. Moreover, we believe that the study should consider the future demand for pharmacists in the context of a changing health care delivery system that will require that pharmacists provide more extensive, time-consuming, patient-based services, such as education, disease management, and medication monitoring.

We anticipate that many NACDS member companies will provide specific comments to the agency on how the shortage is affecting their operations and ability to provide pharmacy services. In our comments, we attempt to provide an overview of key industry statistics, and other broad trends and issues that we urge the Department to consider in conducting this study.

I. Comments Regarding Impact of the Pharmacist Shortage

While the number of prescriptions is expected to increase from 3 billion today to 4 billion in 2004 (a 33 percent increase), the number of licensed pharmacist full-time equivalents (FTEs) practicing in community retail pharmacy is expected to increase from about 119,000 to 127,000, only 6 percent. The significant increase expected in prescriptions, coupled with a decrease in the growth rate of available pharmacist FTEs, will increase by 65 percent the number of prescriptions that pharmacists will be expected to fill.

The tremendous increase in the number of prescriptions is due to several factors: the growth of managed care in the U.S., the increase in the population of elderly Americans, and the development of new and innovative drugs to treat acute and chronic conditions. The demand for pharmacists to fill an increasing number of prescriptions will result in less time available for the pharmacist to provide important patient-focused services, such as counseling consumers on appropriate medication use, and avoiding dangerous drug interactions. Studies show that pharmacists can help reduce the estimated $100 billion spent annually to treat medication-related adverse events, such as hospitalizations and emergency room visits.

It is also important to recognize the impact that state-based pharmacy practice laws have on this issue. State law, not Federal law, is responsible for regulating the practice of pharmacy. Many state laws and regulations are outdated, impeding the use of modern technology and other efficiencies that can help pharmacists provide prescription services. As a public policy goal, pharmacy practice laws should permit maximum use of technicians and other modern technology to enhance delivery of prescription services.

Finally, we do not believe that HRSA can analyze the extent of the shortage or posit a potential solution by simply determining the number of pharmacists that would be required to meet a certain ratio of "pharmacists to the number of prescriptions they can fill" or "pharmacists per 100,000 population." In other words, a simple pharmacist to prescription ratio would ignore the current and future patient care roles of pharmacists. Providing patient care services is time consuming, requiring the pharmacist to perform education, case management, and disease management.

We also believe that the agency should analyze the current and future pharmacist supply by examining "full time equivalent" licensed pharmacists, rather than simply the number of licensed pharmacists that are in the work force now, and are expected to graduate in the future. It is important to recognize that, for the last fifteen years, the majority of pharmacist graduates have been women. Evidence suggests that, over the course of their professional careers, women pharmacists work fewer hours than their male pharmacist counterparts.

Evidence Regarding the Shortage of Pharmacists

To help HRSA understand various trends in the marketplace that are responsible for the increase in prescriptions, as well as the shortage of pharmacists, NACDS has provided the following information:

Summary information on the five pharmacy manpower studies that we conducted in 1998, 1999, and 2000. These studies include information regarding the extent of the shortage of pharmacists in rural areas of the country (Tab 1);

Drug Topics pharmacy salary surveys (Tab 2);

Information regarding trends in the number of prescriptions filled over time, and changes in the number and type of retail pharmacies over time (Tab 3);

Information regarding trends in the number of 24-hour pharmacies and drive-through pharmacies (Tab 3);

Changes in the number of community retail pharmacies over the last 50 years (Tab 3);

Trends in pharmacy school graduates over time (Tab 4);

Analysis of reasons for pharmacist turnover (Tab 5);

Articles from local community newspapers about the impact of the pharmacist shortage on access to pharmacies (Tab 6).

Role of Technicians in Pharmacy Practice

Technicians play an important role in pharmacy practice. Optimal use of well-trained and experienced technicians can alleviate some of the pharmacist's workload. Importantly, technicians can allow the pharmacist to focus on patient-oriented services, which is the role for which the pharmacist is educated and trained.

Responsibilities of a technician include, but are not limited to, performing nonjudgmental functions such as collecting and entering data in the patient profile, labeling the prescription vial, handling third party and other payment issues, taking phone calls from customers, and performing some tasks relating to preparing the prescription.

Extensive technician training is a priority for chain pharmacy employers. Some develop their own company training programs, while others use the Community Retail Pharmacy Technician Training Manual developed by NACDS and the National Community Pharmacists Association (NCPA). Some outsource their training to community colleges and other programs.

Certain chain companies encourage their technicians to take the Pharmacy Technician Certification Board (PTCB) exam. Passing the PTCB exam often gives technicians confidence in their abilities, while assuring their employer that they possess a minimum knowledge base. PTCB certification can also provide a credential for the technician interested in a career track with a company.

Regulatory barriers exist in some states that prevent the maximum utilization of technicians. Restrictive ratios are sometimes imposed on the number of technicians that are allowed to assist each pharmacist. Occasionally, a state will only allow a technician to perform limited responsibilities in the pharmacy. NACDS is working with states to remove, or at least increase, technician to pharmacist ratios, and to allow the pharmacist to use discretion in the responsibilities they delegate to technicians.

NACDS has provided a chart to HRSA that indicate the current permissible use of technicians by state (Tab 7). NACDS believes that states should continue to move forward in modernizing their pharmacy practice acts to remove restrictive ratios, and allow expanded responsibilities for pharmacy technicians.

Impact of Growth of Managed Care on Pharmacy Practice

Data has been provided to HRSA that documents the significant increase in the number of prescriptions that are paid for by insurance or third party managed care plans (Tab 7). NACDS has also provided information to HRSA on the impact of managed care coverage on the increased utilization of prescriptions, and the subsequent increase in the demand for pharmacists (Tab 7).

The increase in the growth of third-party covered prescriptions has helped improve prescription access to millions of Americans. However, the significant increase in third party coverage for prescriptions has added increased administrative burdens on pharmacists. Pharmacists often must become involved in resolving benefit and formulary coverage issues and adjudicating claims, which are extremely time-consuming tasks.

A summary of a study conducted by Arthur Andersen has been included. The study found that many mechanical and third-party prescription related tasks being performed by the pharmacist could be just as well executed by a technician. That is, pharmacists are spending over 2/3 of their time on such tasks as computer data entry; counting and packaging medications; resolving prescription insurance program disputes; and other clerical activities. Pharmacists spend 22 percent of their time on third-party related administrative tasks, such as resolving coverage and formulary issues.

These non-clinical tasks consume pharmacists' valuable time that could be better devoted to patient care activities. With the number of prescriptions expected to increase to 4 billion by 2004, the need for efficiencies in delivering pharmacy services only increases. These third-party prescription administrative issues will only be further exacerbated if a third-party based Medicare prescription drug benefit is developed.

Impact of Pharmacist Shortage on Quality of Care

As primary care health providers, pharmacists have a critical role in assuring the appropriate use of medications and reducing the incidence of medication errors throughout the health care system. Pharmacists are trained to provide medication therapy management services. These consist of a comprehensive range of programs and services delivered by the pharmacist that help assure that patients take their medications appropriately, and as prescribed by their physician.

Community retail pharmacies have made, and are continuing to make, significant investments in patient care programs, operational processes, computer information systems, and employee training in an effort to build medication safety programs into the products and services that are provided to patients. For example, almost all community retail pharmacy providers:

Use reliable, real time, computer software programs designed to check prescriptions for duplicate drug therapies, potential drug-drug and drug-allergy interactions, and out-of-range dosing, timing, and routes of administration.

Provide comprehensive written information and verbal counseling to consumers when they pick up their prescriptions, to help them understand how to take their medications.

Provide "reminders" to patients to refill their medications when the refill is due. This helps reduce the incidence of non-compliance with medication therapy, especially for individuals who need ongoing treatment for long-term chronic conditions, such as hypertension, diabetes, and high cholesterol.

The recent Institute of Medicine (IOM) Report, "To Err is Human: Building a Safer Health System," recognizes the important role of the pharmacist in the health care system. The report says that pharmacists are an important drug information resource in the hospital setting, as well as an important primary health care provider in the outpatient setting. Moreover, a January, 2000, General Accounting Office (GAO) report on Adverse Drug Events said "increasing the role of community pharmacists in monitoring drug therapy improves patients' compliance" with their medications. The report also said that the role of the pharmacist as adviser to physicians in prescribing drugs should be increased.

A slowing in the growth rate of available pharmacist FTEs will have an impact on patient care. Consumers may be unable to obtain their prescription drugs in a timely manner because pharmacies have to permanently close, or are not open at convenient times.

We do not believe, however, that there is a nexus between pharmacy prescription workload and an increase in the number of adverse events or medication-related errors that might occur. In fact, a study released in November 1998 by Tony Grasha, Ph.D., of the University of Cincinnati lead to the conclusion that it is too "simplistic an analysis" to make the conclusion that workload is the only cause of pharmacy errors.

Indeed, factors most highly associated with pharmacy errors include stress from social life problems and relationship issues; conflicts with supervisors and coworkers that cause distractions; and drinking too many caffeinated beverages. Another analysis of the causes of pharmacy errors is being completed by Dr. Grasha, and should be publicly available soon.

We have provided several articles that describe the important role that pharmacists have in assuring the appropriate use of medications and decreasing the incidence of medication-related adverse events (Tab 8). We have also provided information about new evolving roles for pharmacists, such as collaborative practice agreements with physicians (Tab 8).

Finally, a "White Paper" which was developed jointly by NACDS, the American Pharmaceutical Association (APhA) and the National Community Pharmacists Association (NCPA) has been included (Tab 9). The document, called "Implementing Effective Change in Meeting the Demands of Community Pharmacy Practice in the United States," describes the important current and future patient care roles of the pharmacist, and the various challenges that will have to be faced in order to meet these roles. We believe that this paper will help HRSA understand the vision for the future of pharmacy, and how our pharmacies will try to move the profession in this direction.

Impact of a Medicare Prescription Drug Benefit

Medicare beneficiaries who are primarily older Americans and disabled use prescription drugs more intensely than any other population group. Moreover, Medicare beneficiaries with prescription drug coverage fill nearly one-third more prescriptions than those without coverage, and annual drug spending for Medicare beneficiaries with coverage is nearly two-thirds higher than those without coverage. Depending upon how it is structured (i.e. copays, deductibles, premiums, voluntary participation, etc), a new Medicare prescription drug benefit will likely have a significant impact on the number of prescriptions written and filled.

Moreover, given that older Americans use more prescriptions that younger Americans, more of the pharmacists time will be involved in helping to educate the Medicare beneficiary on how to use their prescriptions, and manage the medication therapy. Therefore, it is logical to conclude that Medicare coverage will only increase demands for prescriptions and pharmacy services. NACDS has provided several articles and data to HRSA that detail estimates of the impact on prescription growth of enhanced Medicare coverage for prescription drugs (Tab 10).

Use of Automation and Technology in Prescription Delivery

The use of automation and technology contributes greatly to enhancing the efficiency of a pharmacy operation. An efficient pharmacy enables a pharmacist to address the increasing prescription volume, thereby alleviating workload, and also to reallocate the time previously spent on prescription processing. The additional time the pharmacist gains with automation and technology can be spent on patient care activities.

Automation includes, but is not limited to, robotics, counting devices, and dispensing systems. Technology includes integrated voice response, electronic transmission of new prescriptions, electronic transfer of prescription refills, central processing, and central dispensing.

Advantages that are realized by the deployment of automation and technology include the ability to handle increasing prescription volumes, decreased pharmacist workload, increased efficiency, increased accuracy, streamlined workflow, less interruptions, more time for patient care activities, greater customer satisfaction and convenience.

Many of the efficiencies that are gained with the use of automation and technology, combined with the face to face contact with the community pharmacist who helps them understand their conditions and take their medication correctly, offer the consumer the best of both worlds. Pharmacists' professional satisfaction increases when they utilize their training in drug therapy management, which is facilitated by the use of automation and technology for dispensing.

NACDS has provided information to HRSA on the states that currently allow use of automation and other various technologies in the delivery of prescription services (Tab 9). NACDS encourages states to embrace new technologies that add efficiencies to pharmacy operations while providing a high level of safety for patients.

Impact of Internet and Mail Order Pharmacy

NACDS believes that the growth of internet technology could increase consumer demand for prescription services, and could thus contribute to the pharmacist shortage. Internet technology may increase consumer access to prescription services because the internet makes it easier for consumers to obtain prescription refills, and allows consumers to compare prescription drug prices from their home.

Moreover, the internet has become and will remain an important method for consumers to order prescription refills that have already been filled by community pharmacies. Community retail pharmacies have been very successful in establishing their own integrated internet sites that allow consumers to order a prescription refill through a means other than by phone or by dropping off the prescription. The prescription is then delivered to the consumer, or the consumer can pick up the prescription at the local pharmacy.

Some prescriptions that are ordered through internet-based technology are delivered through mail order pharmacies. In some cases, these are the same mail order pharmacies that are filling prescriptions for managed care plans and PBMs; in other cases, stand-alone internet pharmacies have established their own mail order pharmacies. In either case, pharmacists are necessary to fill these prescriptions.

Finally, NACDS believes that, as policymakers and benefit managers continue to recognize the economic limitations of mail order, as well as the quality of care issues, that the rate of growth in mail order which has already leveled off will continue to decrease. This may actually contribute to an increase in demand for pharmacists in the community setting.

Impact of Educational Process Changes on Pharmacist Supply

On June 14, 1997, the American Council on Pharmaceutical Education, the national accrediting agency in pharmacy recognized by the U.S. Department of Education, adopted "Implementation Procedures for Accreditation Standards and Guidelines for the Professional Program in Pharmacy Leading to the Doctor of Pharmacy Degree."

These standards and guidelines, commonly referred to as Standards 2000, become effective on July 1, 2000. The transition period began June 14, 1997 and concludes June 30, 2005, by which date, all accreditation terms for baccalaureate in pharmacy programs will cease to exist.

A number of pharmacy colleges and schools, such as those located in California, have offered the doctor of pharmacy degree as the entry-level degree for many years. However, the transition from a five-year baccalaureate degree in pharmacy to the six-year doctor of pharmacy (Pharm.D.) degree has significantly impacted the pharmacist supply in many areas of the country.

When transitioning from the five-year entry-level baccalaureate degree to the six-year entry-level Pharm.D., most colleges/schools experienced a significant decrease in the number of graduates for at least one year. For example, if the last baccalaureate class was admitted in Fall 1996 with an anticipated graduation of 1999 and the first Pharm.D. class was admitted in Fall 1997 with an anticipated graduation of 2001, then there will be no graduates or very few graduates in 2000. The few graduates in 2000 would likely be late finishers of the baccalaureate program.

The transition to the entry-level Pharm.D. degree has also impacted class size. Some colleges/schools have focused on maintaining total enrollment during the transition. However, this has resulted in fewer graduates per class. For example, given 100 students per class in the three-year professional baccalaureate program for a total enrollment of 300 students. In the four-year professional Pharm.D. program, these 300 students are divided among four classes, yielding 75 students per class, which is a 25 percent reduction in the annual number of graduating pharmacists.

Adequate funding has also been an issue at many colleges/schools of pharmacy. The Pharm.D. program is a resource intensive program. Colleges/schools need additional faculty, experiential training sites and physical facilities, namely classrooms. Numerous state-supported institutions of higher learning have shared their struggles with the transition to the entry-level Pharm.D. without additional funding from state legislatures for the additional year of education.

The American Association of Colleges of Pharmacy's Profile of Pharmacy Students found that, in 1992 there were 75 schools of pharmacy with 8,664 student enrolled in the first professional year of an entry-level program. In 1998, there were 81 schools of pharmacy with 8,346 students enrolled in the first professional year of an entry-level program. Thus, even with an increase in pharmacy schools, there has been a decrease in the number of students enrolled in pharmacy professional degree programs. Without a net increase in enrollment, there cannot be an increase in the number of pharmacy graduates.

The four colleges/schools that opened in Fall 1996 will graduate their first classes in May 2000. We estimate that these new colleges/schools of pharmacy will only "fill in" the gaps created by the transition of the existing colleges/ schools of pharmacy. Not until 2005, when the transition is complete, do we estimate that the number of graduates will increase slightly and level off. (Tab 4)

II. Policy Suggestions to Alleviate the Pharmacist Shortage

NACDS believes that a multi-faceted approach should be taken to alleviate the pharmacist shortage and assure that consumers have access to prescription medications and pharmacy services. Both Federal and state policymakers have an important part in alleviating the shortage. NACDS has identified several ways in which the Federal government could help alleviate the pharmacist shortage:

Increase funding for pharmacy education, including student loans or grants and financial assistance to universities to start schools of pharmacy, or expand existing ones. Moreover, several new pharmacy schools are in need of important start up or seed funding for computers, training aides, laboratories, teaching facilities, or recruitment of faculty;

Encourage states to update their pharmacy practice laws and regulations, allowing the maximum use of contemporary technologies and efficiencies available to fill and deliver prescriptions helping to improve productivity among the pharmacist workforce.

Encourage Federal payors such as Medicare, Medicaid, FEHBP, DOD to adopt a uniform pharmacy benefit card using the NCPDP standard - to replace the various cards currently used under health insurance plans. This could bring enormous efficiencies to the delivery of pharmacy services, freeing pharmacists to interact with patients to a greater degree. Regulations to implement the Health Insurance Portability and Accountability Act (HIPAA) may provide a good opportunity to include a uniform pharmacy benefit card format;

Establish a new temporary visa program allowing pharmacists from foreign countries to practice pharmacy in the United States until the shortage is alleviated. We appreciate your consideration of these comments as the study moves forward. Please contact John M. Coster, Ph.D., R.Ph., Vice President, Federal and State Programs, or Laura Miller, NACDS Senior Economist, (703-549-3001) if you need any additional information about this issue or have any questions about the data that we have provided. Thank you.

Sincerely,

S. Lawrence Kocot Senior Vice President and General Counsel