retail news in context, analysis with attitude

CVS Health, the nation's largest chain drug store chain, said yesterday that it no longer will be a member of the National Chain Drug Association (NACDS), the nation's largest retail drug store trade association.

Politico notes that "CVS pharmacies made up almost a quarter of the nearly 40,000 pharmacies NACDS says it represents, and the company’s departure will also cost the trade group a nice chunk of change. CVS Health reported paying $1.6 million in dues to NACDS last year, less than only its membership dues for America’s Health Insurance Plan, Better Medicare Alliance and the Pharmaceutical Care Management Association."

Company spokesperson Matt Blanchette tells Politico, "“While we have made the decision to step away from the association, we are fully committed to advancing and supporting the value of pharmacy and the critical role that pharmacists play as health care providers in their communities."

Politico writes that while "Blanchette did not explain the reason behind CVS’ split with NACDS," the CVS decision "comes amid a broader push in the pharma ecosystem to blame rising drug costs on PBMs, which health insurers, employers and the government hire to manage prescription benefits for their health plans. CVS Caremark controls the largest chunk of the market among PBMs, one of three companies that controls 80 percent of the PBM market, according to Health Industries Research.

"NACDS has applauded state legislation to regulate PBMs and last month, it praised an announcement that the FTC would probe PBM practices as contributing to momentum for PBM reforms.":

KC's View:

We've been writing here for some time about how CVS has been redefining its role within the health care business, with what I would describe as being inconsistent and varying degrees of success.  But the intention clearly is there, and so perhaps it is not surprising that the company would decide that the goals of a traditional retail-centric trade association are not in synch with its interests.

I have to think that this scenario has to be of some concern to every trade association with members that are trying to redefine themselves outside the traditional lanes in which they've traveled.  If they do so to a sufficient degree, these members may see trade associations as defending the status quo as opposed to helping to clear the trail for disruptive interests;  and if the association does facilitate disruption, then the more traditional members may seem under-served.  I'm not saying that this bifurcation cannot be accounted for in associations and by association leadership that are savvy enough to do so, but it has to be a challenge.  And, in its own way, disruptive to a traditional business model that has focused on lobbying and education.