If you've ever walked into a pharmacy, used a prescription drug coverage, and walked out a short time later, paying only your copayment, you've been impacted by a small but powerfully influential industry group by the name of NCPDP.
The National Council for Prescription Drug Programs (NCPDP) is a standards organization that quietly has shaped much of the patient experience at pharmacies across the US. How does your pharmacy know for sure you have prescription insurance coverage when you walk in? How do they know your copayment, or how much they will be paid? If it's your first time visiting a particular pharmacy, how can the pharmacist be alerted to potential drug interactions with drugs you've filled elsewhere?
The answer to all of the above questions is, at least in part, NCPDP.
NCPDP is a voluntary organization comprised of members from pharmacy providers (CVS, Walgreens, etc), pharmacy payers (health plans and pharmacy benefit managers (PBMs)), software vendors who provide management software to stakeholders in the industry, and anyone else interested in participating.
Through controlled procedures that ensure order and prevent even the appearance of any illegal or improper activity between competitive entities, NCPDP brings together perspectives and opinions from all across the pharmacy industry. Normally somewhat adversarial competitors and trading partners (people paying the bill and people being paid) come together to develop and implement standards for operating in the pharmacy space. The altruistic goal of the organization is to standardize pharmacy-related business processes between trading partners in order to bring efficiency and benefit to all involved.
In most industries, absent governmental mandates, standards are generally voluntary, and only fully embraced when there is a benefit to all involved. With somewhere around 80,000 pharmacies in the US today and hundreds (if not thousands) of payers, it would be improbable that, without an industry standard for telecommunication between these partners, efficient or even effective communication could occur. For this reason, the vast majority of pharmacies and payers have, over time, voluntarily adopted the NCPDP standards.
The Health Insurance Portability and Accountability Act (HIPAA) brought any straggler into line. Basically, HIPAA governs the controls and protections for health information. Since transactions to share information regarding prescriptions involve, unavoidably, personal health information, HIPAA would understandably be concerned about pharmacy transactions. For that reason, HIPAA recognized the NCPDP telecommunications standard as approved under HIPAA.
Recognition under HIPAA gives the industry-based standard a unique position, in that it has binding power under law. The standard is, in effect, no longer voluntary. In addition, the Centers for Medicare & Medicaid Services (CMS), who greatly increased their presence in the pharmacy market in 2006 through the Medicare Part D benefit, has also begun to use the NCPDP workgroups as a sounding ground for new ideas, and to gain industry perspective on the limitation, benefits and impacts of new policies being considered.
Through the years, NCPDP has steadily increased in reach and influence, and now represents one of the premier cross-functional industry-wide groups of individuals impacting pharmacy today. Those who want to understand the reasons for or driving forces behind pharmacy industry changes, or the solutions being considered, argued and implemented to address industry issues and needs should watch NCPDP closely, study their activities, and get involved. Anyone can participate, and all are welcome. The best thing that can happen in such an industry organization is the infusion of new participants with new ideas.
Next time you visit your drugstore and get your prescription filled, know that NCPDP made the experience (whether good or bad) possible, and continues to work to improve the way the pharmacy industry goes about the important business of taking care of patients.
www.ncpdp.org for more information
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