Over greater than a decade, independent pharmacist Jay Patel has built close and lasting relationships along with his customers who come to him for help with illness and health issues.
But now there are intruders: drug middlemen, firms referred to as “pharmaceutical benefit managers” (PBMs) that influence what drugs may be purchased where and at what price.
Patel and other independent pharmacists say their business is threatened by the growing influence of those firms, that are tied to large health care conglomerates. In an opaque and complicated system, they are saying, patients are being steered to affiliated pharmacies reminiscent of CVS and mail-order pharmacies. Pharmacists face high fees and low reimbursement rates, and subsequently cannot cover their costs.
This could mean destroy for Patel and other pharmacies in the world.
“I want to do what is important for the community. But how long can I keep this up?” said Patel, 48, owner Savco Pharmacy within the West San Carlos district of San Jose. “We are at their mercy.”
PBMs counter that their conclusions are based on incomplete evidence. According to the industry group Pharmaceutical Care Management Association, they protect consumers from high drug prices by negotiating price reductions, referred to as rebates, with drug firms.
The disappearance of independent pharmacies could limit consumer selection and access to health care – especially in low-income or rural communities.
On Telegraph Avenue in Oakland, Selam Pharmacy owner Michael Gebru called PBMs a “big black box,” saying, “They charge me whatever they want and they can charge it back. It's pretty scary. It's like the Wild West.”
In the coastal village of Point Reyes Station, the small West Marin Pharmacy recently lost its contract with the PBM company Express Scripts, which is utilized by the insurance company Cigna, amongst others. Now residents who’re insured by Cigna will need to have their prescriptions sent by mail or drive 20 miles to search out one other pharmacy.
“When one of us, our children or our families is sick with fever, vomiting, diarrhea or worse, we may have to drive an hour or more to San Rafael, Novato or Petaluma just to fill a prescription,” said concerned pharmacy customer Christine Cordaro of Inverness Park.
PBMs were created within the Nineteen Sixties as a approach to process prescription drug claims. They are answerable for paying pharmacies on behalf of insurance firms, employers and the federal government. The three largest firms are operated by CVS Health, Cigna and UnitedHealth Group, which manage prescriptions for greater than 200 million Americans.
In 2012, when San Jose pharmacist Patel bought his modest store, PBMs filled lower than 50 percent of prescriptions.
A series of mergers in 2018 created the present system through which healthcare groups are vertically integrated and own the insurer, the PBM and the pharmacy. Giant health insurer Aetna merged with drug distributor CVS. Another major insurer, Cigna, bought Express Scripts. UnitedHealth built its own PBM. All three firms operate mail-order pharmacies.
“It’s like they’re taking money out of one pocket and putting it in the other,” said Zsuzsanna Biran, pharmacist and owner of West Marin Pharmacy.
Despite consumer opposition, the FTC approved the mergers. But now there are concerns concerning the economic importance of the PBMs. The smaller, locally run pharmacies feel they’re being pushed out of the market.
CVS describes the situation of independent pharmacies as “exaggerated.”
“Contrary to the rhetoric of the independent pharmacy lobby, independent pharmacies are not in a crisis,” CVS announced this in a press release.
“What the independent pharmacy lobby has long coveted is a world without price controls or the competitive pressures of PBMs negotiating on behalf of paying customers and consumers,” CVS said.
According to Express Scripts“If we didn’t provide significant value to our thousands of partners, we wouldn’t exist.”
The PBMs work by negotiating discounts on the “list price” of medicine. Some of those savings are passed on to insurers and employers. But some remain with the PBMs. This is enormously profitable.
There is evidence of anti-competitive behaviour that illegally distorts the market, harms consumers and threatens the survival of independent pharmacies, in accordance with recent reports from the US Trade Commission and a House Committee on Oversight and Accountability Investigation.
According to reports released last month, PBMs are pushing patients toward dearer drugs by creating “formularies” of preferred drugs that discourage them from using cheaper alternatives. Because these high-priced drugs have the next discount, the profit is higher.
Sometimes in addition they restrict patients' access to mail-order businesses they own, thereby limiting the role of the local pharmacy.
Independent pharmacies complain they’re being charged unnecessary additional fees. When he opened his business in 2012, Patel paid $15,000 to $20,000 in PBM fees; this 12 months, his fees could exceed $110,000.
High fees and low reimbursements can deter a pharmacist from filling a prescription. If he loses money on a prescription, “I have two options,” Patel said. “I can take the loss or tell the patient I can't fill it.”
“On the one hand, reimbursements for prescription drugs are falling, on the other hand, there are higher fees. Many pharmacists are thinking about throwing in the towel,” says the National Association of Pharmacists, which represents greater than 19,400 independent U.S. pharmacies.
Almost a 3rd of independent pharmacy owners could close their businesses this 12 months, it was said.
But in Sacramento and other state capitals, lawmakers are taking a more in-depth look.
State Senator Scott Wiener has drafted a bill Senate Bill 966that might impose recent rules on PBMs and higher regulate the businesses. It would require PBMs to be licensed by the California State Board of Pharmacy and to pass drug rebates on to consumers.
And there are rewards which can be priceless, reminiscent of gifts of fruit, chocolate and homemade cookies from grateful customers.
“He's the best,” said customer Rob Souza as he picked up a prescription for his sick wife. “He's like a small-town pharmacist who always takes care of everything.”
Originally published:
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