August 23, 2012

Inquiries into Improper Medicare Billing, Drug Diversion, and Drug Shortage Activities Raise Serious Questions

Recent Congressional hearings and government investigations have raised serious questions about opaque business practices and pricing strategies within the independent drugstore industry, which now generates $93 billion in annual sales from 23,000 stores nationwide and ranks among America’s most profitable small business sectors. At independent drugstores, the owner, cashier, and book keeper are often one and the same. However, recent reports note that independent drugstores are significantly more prone to improper behavior than other pharmacies.

Accordingly, policymakers are asking three basic questions:

  • Why are independent drugstores eight times more likely than other pharmacies to submit questionable bills to Medicare?
  • Are independent drugstores exploiting the drug shortage crisis?
  • Why are independent drugstores fighting bipartisan efforts to reduce drug diversion?

Some suggest that independent drugstores may need more, not less, accountability. The question is whether policymakers will confront the problem or, take the opposite approach and pursue new policies that would make improper pharmacy practices even more difficult to detect.

The answer matters greatly to those who pay 2/3 the cost of prescription drugs: employers, unions, and the taxpayers who fund federal and state health programs.

Read the complete report.