Could you please pull the microphone to you so that you're talking right into it.
Okay. I was diagnosed with multiple sclerosis in April of '96. After being diagnosed with MS, I started taking an injectable drug called Avanax (ph.) in August of '96, which was covered 100 percent after a letter was submitted by a physician, Dr. Fred Loveland. In his letter Dr. Loveland states why it is necessary for me to receive the injection. One reason was fewer and less severe exasperations (sic) than patients who are not on drug treatment. The second was fewer episodes of physical and psychological trauma. The third reason was the economic impact of multiple hospital admissions on an annual basis is significantly reduced. When learning of the new plan in 215 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 December 9th of '97, I contacted a Miss Laurie Davey, who advised me to write a memo to our Personnel Director, Miss Linda Seyda, advising her of my situation. On December 19th, I received a letter from Mr. Lee White, Benefits Administrator, stating insulin coverage is generally an included item probably because it is common and the cost is modest and known. Other injectables are not common, they can be very expensive, and the cost can be hard to project. I also received a copy of a letter sent from Mr. Lee White to Eagle Managed Care requesting Rite Aid to administer on a plan fee-service basis for coverage of injectables, which would cover 75 percent of an employee's injectables, up to $10,000, and thereafter, 100 percent. The new plan was put in place as of January 1st. My last injection was on February 5th of this year due to changes in our plan. The new plan lists insulin and syringes in a separate category from other injectables. It was only covered 75 percent on injectables and covers 100 percent on insulin and syringes. 216 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 The cost of Avanax is $892.98 a month. Under the new plan, I would be required to pay 4 percent of the cost, which would total $223.25 a 5 month. I will not be covered at 100 percent until 6 the first 10,000 in claims per year. My cost for 7 the year is $10,715. 8 If injectable insulin is covered for 9 diabetics at 100 percent, why can't an injectable 10 like Avanax be covered for treatment of multiple 11 sclerosis? 12 Based on information that I have found 13 out through research in the Americans with 14 Disabilities Act, your employment rights as an 15 individual with a disability, that an employer 16 provide employees with disabilities equal access 17 to whatever health insurance coverage is offered 18 to another employee. Why is a diabetic injection 19 covered at 100 percent and no one else? The ADA 20 makes it unlawful to discriminate in and in all 21 employment practices such as benefits. 22 As a clerk-typist II, my net income is 23 $1,205 a month. I am a single parent with a 24 daughter in college, and I cannot afford to pay 25 $223.25 for this injection plus a $5 copay. 217 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 This treatment was preventing further deterioration on my physical capabilities. I stopped taking the Avanax on February 5th because I could not afford to pay for it. Since then, my condition has deteriorated. I have experienced bowel and bladder problems, it has become extremely difficult to control my balance while standing and walking, and there are times when I cannot drive my car because I have difficulty with my foot. When I was taking Avanax, the only problem I experienced was a problem with my balance, for which I used a cane. I am only asking that I be granted the same prescription coverage for treatment of multiple sclerosis as those who receive injectable insulin for diabetics. Insulin for diabetics is covered at 100 percent. It seems only fair that an injectable drug for the treatment of MS or any other illness that requires an injectable treatment be covered at 100 percent. Thank you.
Thank you very much for your testimony. Let me just ask you a couple quick questions. 218 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
You indicated that your treatments, the total full cost of it is $892 a month.
Times gets you 8 to -- I think you indicated about $715. 9
I'm sorry $10,715. 11 The new plan allows for 75 percent of up to 12 10,000, and 100 percent thereafter.
So in your situation, you pay the $223 a month which, for you, amounts to $2,676.
And somewhere at the tail-end of the year, you cross the $10,000 threshold.
I would assume, I'm not sure because -- 219 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
No. There would be 100-and-some dollars still that would be debatable because the prescription is 892, so the 715 -- I don't know what would happen come December, if they would cover the last injection 100 percent or not.
Right. Now, again, by way of your testimony, apparently, by way of the plan at the time --
-- the City believed and demonstrated that your condition warranted 100 percent coverage.
Because in August of 1996, by way of a letter from your doctor, he or she indicated that you needed this medicine for the laid-out purposes, and the City at that time, based on the plan that we had, agreed to cover it 100 percent.
So the only change 220 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 here has not necessarily been one of your condition, although, hopefully, at least from August of '96 until February or so of '98, you either maintained yourself or possibly improved, but because of a change in our plan, not in your condition, someone decided somewhere that now you were not eligible for 100 percent coverage.
Well, I'm stunned. The City is quarreling with Miss Gallagher over what, from the City's point of view, as best I can figure out, involves something like 2500 to $2750 in the course of the year. Now, that amount of money to Miss Gallagher is a huge portion of her total salary. To the City, it is not even -- I can't even say it's not even a drop of a -- it's not even a particle of a drop, and I just can't understand -- we -- I guess we have -- I'm wrong, Miss Seyda, I apologize. I assume there are about 5,000 people in her condition, so we have to multiply the 2500 or so that it would cost the City to give her the 221 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 same coverage before. How many people are involved?
Miss Seyda, at this point, because we were going to lead into you and Rite Aid, you might as well come forward.
Yeah, come forward 'cause I would like to find out what -- you know, maybe this is where City government money is wasted.
While Miss Seyda's coming to the table, I think it's important to note that if Miss Gallagher I think, indicated that she, by way of salary, receives $1200 a month take-home pay --
At $223 a month for her prescription, a fifth of her salary, 19 percent of her salary is going just towards -- 20
That would be plus the $5 copay and my other medication that I take.
Yeah. How many employees would be involved in this particular 222 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 medicine? How many others have asked for coverage at the 100 percent level for injectable -- I don't know what the specific thing is here.
As I recall, and I'm going from memory, when we looked at this, that for this particular drug, the cost to the City, based upon usage last year, was something in the neighborhood of to $30,000. Something in that neighborhood 10 is what I recall. 11
But we'd like you to 12 check it but that sounds like 10 to 15 employees. 13
I don't recall the number 14 of employees. But, as I recall, the cost of those 15 -- of that particular drug was somewhere in the 16 neighborhood of, I think, 25 to $30,000. I just 17 don't remember how many -- 18
Well, how do you 19 justify putting an employee in jeopardy of her 20 health, spending all your time -- I assume you are 21 at the generally commissioner's level of pay -- 22 your time, this Miss Laurie Davis's time, this 23 fellow who wrote the letter, I don't know whether 24 it's a man or woman, Lee White. 25
He's a gentleman. 223 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
A gentlemen, all right. I didn't know by the name. And making us spend all this time. I think we've far expended more than all the employees would require. Why does the City paint itself into such a horrible corner? What are you trying to teach her, that government can be real tough and ignore the needs of its employees? I don't know what you're doing here.
Actually, the plan that the City has in place, the original intent of that plan was to eliminate injectables entirely. What we have been trying to do is to come up with a policy that will be equitable for our employees. And I think that I have indicated to you and to Councilman Nutter that we are committed to addressing this problem and will do so.
Well, I think it ought to be addressed right away. I think it's a terrible thing that's she's been compelled to stop using this back in February. 224 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 There is a human cost as well as a financial cost. You keep talking about financial costs. I think you fail on that, and you certainly totally fail on the human cost. I don't understand that. I think she ought to be repaid every penny if she's paid anything out of her own pocket under this now policy, that ought to be repaid. She ought to be authorized before this day is over to get that injection and to continue to get it for as long as she needs it. I don't understand the City playing with that. They give bonuses -- top-level employees in the City government got high bonuses that totalled far more than what we're talking about here for just a couple of employees. You know, I don't know what guides -- do you do anything other than a cost analysis. Is there some such thing as a human analysis, or do you ignore that totally?
I think the fact that we have been attempting to come up with a humane way to deal with this --
Well, there are 225 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 humane ways to pay the bill and say, Sure, we'll do it, we'll work out how it's going to be done. Why take six months to say no and then finally say, Well, maybe we'll try to work out something. Why weren't you concerned when she told you right away that she can't afford to take it anymore? Why didn't you call her call to find out what the circumstance was and authorize it month to month until you determined your policy? Why did you make an employee suffer? And not only her, but the family, the daughter's that in college who needs her support not only financially but as a family member. You know, I don't know what's happened to this city. You know, government used to be considered as the model for determining how people ought to treat other people and working relations. And the lesson this case teaches us is that the City of Philadelphia wants to be regarded as the lowest-level employer there is, unconcerned about health needs of its employees. And I'm stunned that you've participated in doing that. Could we get an answer, Mr. Chairman, by the end of the day? 'Cause if not, I think 226 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 we've got to do something quickly.
Thank you, Mr. Chairman. I was just going to offer that. Miss Seyda, it's about 3:15. I know you've had maybe not an opportunity to leave the room, but I did see you using the phone. I think we have an agreement between ourselves and you that we would have an answer to this issue by the end of the day. I think what I'd like to do is to again encourage you to try to get this nailed down and be able to report to us. We have some additional questions to ask the Rite Aid representatives. I think I would also point out to you that given the nature of this testimony, and we do have a representative from the City Solicitor's Office, although I would not put her in this particular situation, this is a freebie for you. But we could get into a longer discussion, and I think it would be pretty serious on the City's part about the prospect of an ADA claim or suit. And I would venture to guess, and Councilman Cohen is the attorney on the panel but I always try to take the full opportunity to 227 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 practice law from here. I would venture that that claim, even just its defense, could very well take us beyond $25,000. And so I think someone needs to do so that analysis as well. And that has a fiscal impact also. So why don't we try to, for the moment, excuse you from the table. We really do want to get this resolved today. I'd like to get the Rite Aid representatives back up to the table, but I am hopeful, very shortly, that you might be able to give us a much more positive response in this particular matter.
Okay, you're welcome. Thank you. 228 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
Mr. Gurson and Mr. Hushen, when Mr. Brog was at the table earlier, do you have any information to indicate what the -- again, if we're even close on the disbursement rate at an average of 2 per employees, 9,000 employees, 12 months a year, $5 copay, that amounts to $1,080,000 in copay amounts generated. And that would also give us, it appears, 216,000 prescriptions filled. Do you have any estimate on the number of prescriptions filled out of that universe by independent pharmacies versus the Rite Aid corporation?
Yes, Mr. Chairman. I can give you and we can extrapolate from it, but within the scrips for the entire plan, it was, we believe, 225,000 claims in round number, and 193,000 of those approximately were filled by Rite Aid or at Rite Aid stores.
The participants of the plan are choosing where to go, and approximately 85 percent are coming to our stores. 229 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
Okay. And the participants in the plan are choosing to have 85 percent of their prescriptions filled at Rite Aid, notwithstanding the fact that I believe Miss Seyda's testimony was, in conjunction with yours, you have 96 stores, and there are how many independents participating?
If I recall the City representatives testimony, I think it was something in excess of 200 slightly.
So there's a 3-to-1 ratio between eligible independent pharmacies participating versus Rite Aid stores. Yet, Rite Aid is filling 85 percent of the prescriptions.
You know, I'm sure you're very pleased by that. Do you have any explanation for that beyond the great and wonderful, bright, accessible, full-service, milk-juice-eggs-candy stores that you operate? I mean, is there any explanation for why the entity with the smaller number of stores takes 85 percent of the business? 230 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
We don't force anybody into our stores. I assume they find it more convenient and a better shopping experience. It costs them the same thing in our store that it costs them in somebody else's store to get their prescription filled, so I assume the consumer is making the choice.
Well, that may also have come as a result of the consumer having virtually no choice when it started, as you well know. You may not have been here at the time, but I think you heard the earlier testimony. When Rite Aid started, it was 80-some or 90-some stores plus 10 independents. So you grabbed the business at that point in time. Since then, obviously, the network has opened, although, to be honest with you -- and we certainly can't expect you to do this, but I don't think we've done a particularly good job of letting people know that they have more choice. I mean I just -- I find that interesting.
Well, as I say, we can't force people into our stores. If they're -- we 231 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 hope they're not dissatisfied with our service. We know, as there has been evidence today, that there are times that they are. But the numbers seem to indicate that the overwhelming majority are satisfied and find the experience and the service to their liking.
Well, don't break your arm, now. I mean, your earlier -- it wasn't your testimony, it was Mr. Hushen's testimony that also indicated that you closed 60 stores in the City and transferred those prescriptions over. So, I mean let's again be honest with each other, you have shrunk the universe of potential participants. And if -- I mean, look, if I lived in East Falls and I used to go to Tilden Pharmacy and you bought Tilden, and now I have to go to Rite Aid, I don't have any choice unless I decide to go to an independent up in Roxborough somewhere 'cause that was the only pharmacy in East Falls. So that is also a way to capture the business. You cut down on what's available to people. Is that fair?
It happens. 232 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
Okay. I mean, it's a part of the practice, the game plan, it's a part of the program.
Well, in the words of one much smarter than myself, you make them an offer that they can't refuse.
Do we have any location of these 200 places? Because up in my portion of West Oak Lane, in my portion of West Oak Lane, there were two independent pharmacies, one is Esquire, at Broad and Chew; the other was Bookbinder's on the 1400 block of west Stenton. Esquire's is still there, it's been there for many, many years. Bookbinder's, we suddenly saw in the Rite Aid in the Champlost Mall a sign saying that all of the Bookbinder prescriptions now are here in this Rite Aid store, and the Bookbinder place was closed. Now, I know of no other pharmacy in that area at all other than Esquire. I'm talking 233 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 about private independents. There's CVS, there's Walgreen's, there's a new Rite Aid at Broad and Hunting Park, you know, that exists. There's a CVS up on 66th Avenue, there's a Walgreen and an Eckerd down on Broad Street, but I don't know of any independent pharmacies. Could we have a list of those?
Miss Seyda had indicated earlier that there was an updated list as of April '98, and that the Personnel Department was going to take some extraordinary steps to get that information out.
I have an old list. And that's why I say, on our behalf, I think that we as a city government have not done a particularly good job of getting that information out to employees.
And maybe he deserves the ability to pat himself on the back without breaking his arm. If get information out and the statistics are still the same -- incidently, Mr. Chairman, my thought is, is there 234 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 any way of checking the 85 percent figure? From where we look, it looks to me much more like 90 or 95 percent.
Yeah, well, I don't think on the math. I think he's exact on the math. But from whom do we get the information as to the number of prescriptions filled by independents?
Yeah. I only asked the gentlemen what the total universe of prescriptions filled is. I mean, they would naturally have that information through their wholly-owned subsidiary, Eagle Managed Care.
How would they know about the number filled by independent pharmacies?
Oh, we know that because when you go into a non-Rite Aid pharmacy and have your prescription filled, they submit -- that independent pharmacy submits the bill, if you will, for payment to Rite Aid, and Rite Aid pays that independent pharmacist. That's how we know 235 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 so we know how much paid.
Right. And then they're also on a computer-linked network.
Well, yes, it's done -- it's done over a -- it's adjudicated is what the word is called immediately over a network. So there's two levels of this. There's what the City pays us, and then we put together the network of pharmacies which are Rite Aid and these independents, and we pay the independents, in effect, for the City.
This kind of goes back to that service area again. It's just kind of a minor sticking point. But as we talk about computer links, and I think when Ed was in my office, you were even talking about satellite transmission and all kinds of stuff. The fax machine issue, are you going to get a fax machine in all of the stores?
That's generally a corporate decision. I can find out for you, but 236 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 at this point in time, to my knowledge, there's no 3 plan to --
Well, let me ask you this question, then. Just from an operations standpoint and a customer-service standpoint, you think that would be a good thing to have?
Well, if I may respond, it would probably be very helpful in some instances, maybe the instances of new prescriptions. But for refills, anybody in the City can pick up a touchtone phone and have their prescription refilled through the phone. I use it. Anybody --
I understand that. If you want to proceed down that path, how many new -- in your 225 for last year, how many were new and how many were refills? I mean, you must get new prescriptions every day, right?
Absolutely. 237 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
Well, the doctors call prescriptions in. I mean, the fax machine would -- typically what the doctor does is he calls the prescription in, and then the customer comes in with the prescription to the store and picks up the prescription. I mean, there is no necessity to --
I understand how things operate. Think about it. Do you have any protocols on how quickly a prescription has to be filled? Do you have any customer service standards on that? If I call you at 10 o'clock in the morning with my refill, when should I expect it to be done? If my doctor calls you with a new prescription at 11 o'clock in the morning, when should I be able to pick that up? I mean I've had situations where a prescription was called in. They did not attempt 238 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 to fill it until I physically walked into the store and then reached into a pile of prescriptions and looked for it. That would seem to totally negate the purpose of calling it in in the first place.
I believe our standard is to have the prescription filled within minutes. 9
Isn't filling 13 prescriptions really largely today taking from a 14 larger container and putting it in a smaller 15 container? I mean, I don't see anymore, you know, 16 the stirring and the ball, you know, and actually 17 preparing something. I think everything comes 18 prepackaged now. 19
Right, so I don't 239 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 know -- you know, I've had that experience of waiting. They ask me to wait and I wait. You know, I figure, well, they've got something to do. And then, finally, they call me, and as they call me, they start emptying from a larger jar into a smaller. Sometimes the jars are packaged. I take -- I'm trying to think of what it is. I call it "Fantastic," but it's not. It's Pentassa (ph.) for Crohn's condition. And they come 240 'cause you have to take many of them in the course of a day. Each jar comes -- it's 13 already with 240, and my prescription monthly is 14 two of these little packages. 15 Now, why wait the 20 minutes? Then 16 when my turn gets called, all they do is remove 17 the two, you know, and present it in front of me. 18 Now, you know, I don't know why a system can't be 19 developed so that when the stuff is there over the 20 counter, okay, you need this, fine. In a moment, they're back with the thing. So what takes the 20 minutes?
Councilman, I think that may be a function of volume of prescriptions versus the impact on, in many instances, one 240 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 pharmacist. One pharmacist can only fill so many prescriptions, answer so many phones, and respond to so many people at a particular counter. And I think that that's a -- I mean, in our terminology, it's a deployment issue. I mean, you go into a bank, you know at noon, and 8 sometimes there are two tellers. Now, I've never 9 been able to understand why they do that since 10 that's the greatest rush hour at the time in the 11 bank versus at 3 o'clock in the afternoon when 12 there are six tellers.
Yeah. Well, I investigated it. They said, Well, our people, like everybody else, like to have a lunch at 12 o'clock.
And there's hardly any answer you can give to that. And we have three to four pharmacists in back in the Champlost store that I'm talking about, but they need five or six at least, you know, with their volume of work. But, basically, they're still only 241 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 pouring from one jar -- one container to another container. Now, I know they've got to examine it carefully to make sure, you know, that you're not getting something that doesn't mix with something else you've ordered.
There was a question about, and we've gone back and forth on this. We started with the capitated plan, we went to fee for service when the network opened. Are we presently on a capitated plan, or are we on a fee-for-service plan, or are we on a hybrid plan that's capitated for you and fee for service for independents? What kind of plan do we have?
You are on a capitated plan with us, and we reimburse the pharmacists -- the independents on a fee-for-service basis.
Well, no, you have a capitated plan because the amount the City pays per member per month is fixed.
Right. 242 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
All right. So let us just -- let me see if I can give you an example. Let's assume that the rate that the City --
But you're doing something else as it relates to the independents. Is that -- as I recall in the '93 and '95 discussions, everything was about "it's not liability, it's risk." It was the spreading of risk.
And I believe that you did not want a capitated plan with a large network of independent pharmacists. You were willing to accept it with, I believe, the 10 or 12 243 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 designated because of geographical coverage, but the moment anyone started talking about totally opening up the network, the risk issue came in, and the only way you wanted to deal with that was by going to the fee for service. Is that accurate?
Well, because in a cap -- if the City only paid -- as I explained before, Chairman, the City only pays us; it does not pay 244 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 the independent pharmacies.
We take the risk on a capitated plan. Let us assume that the capitated rate is -- the number today is 65.
$65, okay. And let's just, for hypothetical, say it cost us, say, $64 a month to service that. We take risk for one prescription, just for argument sake. We take the risk that you come and have four prescriptions. It doesn't cost the City any more if you have many more prescriptions than we anticipated you would have. All right, we were willing to do that at the time the plan was first put into place because we got an exclusive network. In this business, if you get exclusive networks, the charge to the plan is less than if you have a preferred network; and less again than if you have an open network. When the independents came in, we were no longer having an exclusive network, so we went to a fee-for-service basis. 245 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586
But what is your concern and what do you believe this additional risk to be? Do you think that because the independents are in that somehow employees are going to go hog-wild crazy and start getting more prescriptions --
No, but the economics for us are different if more people come to our store than if they go to someplace else.
Could you be specific with that? Because now I understand the testimony of the fellow representing the independent groups; I didn't understand what he was really aiming at but now I see 'cause this gives you -- you are the one that sets the amount of the fee that they get?
Well, we set the amount of the fee in the sense that based upon what we charge the City, in calculating what we're going to charge the City, we calculate and take into account how much we will have to pay the 246 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 independent pharmacists.
And does the City have anything to say about that figure that you're setting?
And no matter what the capitated rate goes to, you still have determined that the dispensing fee will stay at $1.25? I mean, you had an 8 percent increase last year, you've asked for 10 percent increase this year, now we've got this balancing act going on between the per-month per-employee amount, what you wanted based on 10 percent, now it's been dropped because the copay has been increased. So no matter what your increases are that come by way of you exercising your right under the contract provisions, you're keeping the dispensing fee of $1.25; is that right?
The dispensing fee -- I mean, we're talking about a lot of -- you know, you've talked -- heard and talked about a lot of different things.
But tell us 'cause 247 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 we don't know. We're expecting you to tell us what are the different elements.
Well, let me take you to the example that was given to you before where the -- it was suggested that the State pays AWP minus plus a dispensing fee of $4. So if you had, on 8 a particular medication, just to make the numbers 9 work, a $100 AWP, that's a cost. The City would 10 be paying, if the City -- if that was the City's plan, would pay 100 minus 10, or 10 percent, plus $4, or $94 for that prescription. If the City plan on a fee-for-service basis is AWP minus 15, plus $1.25, then the City would be paying $100 less 15, or $85, plus $1.25 -- $86.25. So what you said before was correct. The better deal for the independents is a worse deal for the City. Somebody has to pay for prescription medication being delivered not only to City employees and City retirees but to the public generally. And that's -- that's -- it's all in the mix of the economics.
Now, tell us about 248 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 the $5 copay. Where does that go?
The per-member per-month of $65 is a fixed fee, and the $5 is a fee that the customer, the City employee, pays every time he has a prescription filled, $5 in that situation.
That's in the cost. When he has that filled -- when he has that prescription filled at an independent pharmacy, taking -- let's just take the example of $100 for the prescription minus 10, with a $5 copay.
Minus 15 and a $5 copay, then the price for the drug to the independent pharmacist, what he's going to get pay for the cost of the drug is $85, of which $5 is represented by the copay, $80 is represented by what Rite Aid pays to them out of the capitated pot of money that it has gotten, plus $1.25 for each prescription that he fills.
So in the independent pharmacy example, the $5 is already 249 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 calculated in the reimbursement.
In the cost of the drug. What happens when I pay the $5 at the Rite Aid store? Where does the $5 go?
To Rite Aid. But Rite Aid -- you're -- the City is paying Rite Aid exactly the $65 and the $5 copay. There's 100 percent of money that goes to Rite Aid $70.
I don't know the answer to that question. I'm sure we pay a lot of different prices.
Can you get us some 250 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 information on that?
On what the independent pharmacist gets, I was not able to follow you. Right now, when -- over the counter, the customer will pay that $5 copay.
Right, how much 251 COMMERCE & ECONOMIC DEVELOPMENT - BILL NO. 970586 would he get?
In $100 with AWP minus 15, he'd get 80 from us, plus another $1.25.
Well, he'd get 80 because you're figuring he's getting the other 5 from the copay. GURSON: Right, the $5.
By raising the copay, it doesn't affect what he gets. He's only interested in -- he's interested in what the discount from the AWP is because he has to buy the drug, so he's interested in what he discount from the AWP is and what the dispensing rate is.
So he winds up paying -- getting the cost minus 15 percent.
Correct. Not necessarily his cost, but a published cost that's called "average wholesale price," that's what "AWP" is, and the industry standard.