Closed DSPs – an unfair business practice

ICPA has been engaging with CMS on this matter and the feedback from CMS is that the closed DSP / unfair business practice issue is on their list of priorities and is receiving attention. The CMS has limited skilled human resource capacity to deal with the volume of submissions and the legal ramifications of the appeal and they are working to finalise the matter as expeditiously as possible. This is a crucially important matter for independent pharmacies and ICPA will continue to closely monitor this matter and pursue it to its end.

ICPA has been vociferous in its objection to the closed DSPs, especially those that impose unfair and unreasonable penalty co-payments on their members for using non-DSP service providers. In the light of this ongoing battle, it is highly regrettable to see yet more players entering the already embattled community pharmacy space offering what may seem like lucrative DSP arrangements with medical schemes.

Take care before handing over your Chronic Medicine Patient profile to ANY 3rd party

With reference to a proposal that is currently being circulated to independent community pharmacies, ICPA advises our members to exercise extreme caution if considering any closed DSP arrangement for the following reasons:

  • These arrangements run totally contrary to the long battle that you have so bravely fought to declare closed DSPs and penalty co-pays as an unfair business practice and will negate all of the efforts and costs already incurred
  • Some of the DSP proposals, especially those that are wholesaler driven, will require you to transfer ownership of your patient’s prescriptions to a 3rd party. This has serious implications with regard to the POPI Act and you could face litigation which your liability insurance may not cover
  • You will lose control of your patient database and claims as this function will be transferred to the 3rd party. This means that your pharmacy could be switched off at the discretion of the 3rd party and you will have no recourse (and the 3rd party will continue to service your patient via another outlet as they have the prescription and patient history)
  • The validity of claiming a dispensing fee on a “parcel” of medicine dispensed and claimed for by another pharmacy could have legal implications for you
  • You and your patient will have no control over the generics you dispense/ substitute. Any request by your patient for a change of product at the time of collection of their “parcel” cannot be facilitated as that power has been wrested away from you.
  • You will in fact be reduced to a collection point with no discretionary powers – not a position of strength or influence!
  • Any legal fee outside of dispensing that you may have access to will now be paid to the third party.
  • According to ICPA’s intelligence gathering and reliable industry information sources, no new DSP arrangements have been negotiated or concluded with the major administrators. If any, these arrangements and contracts would have been concluded prior to Jan 2018 as they would have had to be written into the Schemes’ rules and signed-off by CMS

A word from a highly respected pharmacist…

  • DSPs are contrary to public interest,
  • destroy the strategic pharmaceutical healthcare footprint,
  • promote unacceptable oligopolistic supply and
  • undermine the delivery of primary healthcare at community level

“Service providers must be re-integrated back into society at the point of delivery.  Cherry picking chronic medicine supply is unacceptable. The public is entitled to a comprehensive healthcare service and direct access to healthcare providers of their choice.

Further, it impacts negatively on current job creation at community
pharmacy level and on many others in the pharma space such as your company rep-force.

Overall, the practice is anti-community and not in the patients’ best interest. It must be stopped immediately”.

Date: February 9, 2018