And now:Ish <[EMAIL PROTECTED]> writes:
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Indian Tribe Builds Drug Business
.c The Associated Press By BRIGITTE GREENBERG 6/18/99
MASHANTUCKET, Conn. (AP) - An Indian tribe that has made a fortune from
casino gambling has quietly built a profitable sideline business in
mail-order prescription drugs.
As gamblers feed quarters into the slot machines at the Foxwoods Resort
Casino, a half-dozen pharmacists in white coats work nearby on tribal land,
filling pill bottles bound for patients all over the country.
Under federal regulations, Indian tribes recognized by the government can
buy prescription drugs at a deep discount and resell them. As a result,
Mashantucket Pequot Indians can undercut HMOs and pharmacy chains.
Started 10 years ago as a small health service for members of the tribe and
their employees, the Pequot Pharmaceutical Network today is a $15 million
business, handling 250,000 prescriptions annually.
About 2 million people are enrolled in the network, and its customers
include General Dynamics, Connecticut College, AAA Connecticut Motor Club
and about 40 other Indian tribes around the country.
Even the state of Connecticut, looking to cut its pharmaceutical
expenditures for 85,000 elderly and disabled Medicaid patients, is
considering becoming a customer.
``When we met with the Pequots, they described their purchasing power,''
said Michael Starkowski, deputy commissioner of the Department of Social
Services. ``They described to us a pricing schedule that would be 40 to 50
percent less than what we would be paying otherwise.''
The Pequots refused to disclose profit figures and insisted they are not
looking to put independent pharmacies or national chains like Walgreen or
Rite Aid out of business.
Yet industry executives are jittery. Mark Grayson, a spokesman for the
Pharmaceutical Research and Manufacturers of America, said his organization
fears the government has given the Pequots an unfair advantage.
``We don't believe that the federal supply schedule can be utilized in this
way,'' he said.
Shelly Carter, spokeswoman for the U.S. Bureau of Indian Affairs, said the
Pequots' use of the discount is perfectly legal.
Here's why the Indians have the edge: Drug manufacturers, in an effort to
capture market share, created different price schedules for different
customers. Hospitals typically get a lower price than drug store chains. As
the biggest consumer of pharmaceuticals in the world, the federal
government gets the lowest price of all. Indian tribes are entitled to the
same discount the government gets.
Other Indian tribes also obtain cheap prescription drugs for their
reservation health centers. But the Pequots are the first to set up a
health care business that extends beyond their reservation.
The Pequots get the government discount only for prescription drugs that go
to people on federal assistance, such as Medicaid. For all other patients,
the Pequots pay the HMO rate for drugs, which is still cheaper than what
drug store chains pay.
By law, the Pequots are not allowed to charge the patients on federal
assistance a markup on the drugs. They make a profit by imposing a handling
fee of about $9 per prescription. The Pequots' other customers can be
charged a markup.
About 70 percent of the Pequots' business is in mail-order prescriptions
that are shipped directly from the reservation to patients, most of whom
have chronic conditions, like diabetes.
The tribe also has a pharmacy on the reservation that serves about 600
tribal members and about 13,000 employees. And it has alliances with 35,000
pharmacies across the country, enabling patients to go to drug stores to
pick up some prescriptions.
In addition, the tribe performs claims processing for large employers and
has customer service representatives and pharmacists on call nearly 24
hours a day to answer questions and check patient histories for allergies
or drug interactions.
``We're focused mainly on discrete populations that are homebound, the
elderly poor, for example,'' said Matt Uustal, president of the network.
``We think we give them a competitive price.''
Steven J. Valiquette, an analyst with Warburg Dillon Read in New York, said
mail-order is one of the fastest-growing market segments. He said small
pharmacies are more likely to suffer than large chains.
``The whole prescription drug pie is growing 5 to 6 percent annually, and
the independents are the ones who are losing,'' he said. ``Mail-order is
just lower overhead overall.''
The tribe's main source of revenue remains its casino. Though the tribe
will not divulge profits, it reports its slot machine take to the state,
which keeps 25 percent. With slot revenue topping $600 million in 1998, the
state's share exceeded $150 million.
Although pharmaceuticals may seem like an odd side business, the tribe has
a long history in health care, said Marjorie Colebut, a tribal member and
former nurse who leads the network's board of directors.
She noted that many in the tribe are descendants of shamans, or medicine
people, and that the tribe's current medicine woman, named Laughing Woman,
holds a revered position on the Council of Elders.
``Health care is something that we normally do. It is a part of our
culture,'' Ms. Colebut said. ``It just comes naturally for us.
Reprinted under the fair use http://www4.law.cornell.edu/uscode/17/107.html
doctrine of international copyright law.
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Tsonkwadiyonrat (We are ONE Spirit)
Unenh onhwa' Awayaton
http://www.tdi.net/ishgooda/
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