Factors associated with independent pharmacy owners' satisfaction with Medicare Part D contracts

Su Zhang, William R Doucette, Julie M Urmie, Yang Xie, John M Brooks
Research in Social & Administrative Pharmacy: RSAP 2010, 6 (2): 121-9

BACKGROUND: As Medicare Part D contracts apply pressure on the profitability of independent pharmacies, there is concern about their owners' willingness to sign such contracts. Identifying factors affecting independent pharmacy owners' satisfaction with Medicare Part D contracts could inform policy makers in managing Medicare Part D.

OBJECTIVES: (1) To identify influences on independent pharmacy owners' satisfaction with Medicare Part D contracts and (2) to characterize comments made by independent pharmacy owners about Medicare Part D.

METHODS: This cross-sectional study used a mail survey of independent pharmacy owners in 15 states comprising 6 Medicare regions to collect information on their most- and least-favorable Medicare Part D contracts, including satisfaction, contract management activities, market position, pharmacy operation, and specific payment levels on brand and generic drugs.

RESULTS: Of the 1649 surveys mailed, 296 surveys were analyzed. The regression models for satisfaction with both the least and the most-favorable Part D contracts were significant (P<0.05). A different set of significant influences on satisfaction was identified for each regression model. For the most-favorable contract, influences were contending and equity. For the least-favorable contract, influences were negotiation, equity, generic rate bonus, and medication therapy management (MTM) payment. About one-third of the survey respondents made at least 1 comment. The most frequent themes in the comments were that Medicare Part D reimbursement rate is too low (28%) and that contracts are offered without negotiation in a "take it or leave it" manner (20%).

CONCLUSION: Equity, contending, negotiation, generic rate bonus, and MTM payments were identified as the influences of independent pharmacy owners' satisfaction toward Medicare Part D contracts. Generic rate bonus and MTM payment provide additional financial incentives to less financially favorable contracts and, in turn, contribute to independent pharmacy owner's satisfaction toward these contracts.

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