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This is the fourth in a series of Bio.News articles looking at the need for pharmacy benefit manager reform through the lens of the patient. Middlemen too often act in ways that pad their bottom line, but this is not simply a narrative about how money is diverted into PBM coffers. Examining the larger story about the ways that patients are left vulnerable is critical in understanding why changes are required.
Across the United States, a community fixture is quickly disappearing: local pharmacists are increasingly closing up shop, leaving patients with a set of unenviable and potentially harmful choices.
Patients can travel, often great distances, to pick up their prescriptions and see the pharmacist—a key member of the care team—in person. Or they can use mail-order pharmacies, losing a face-to-face relationship and putting them at risk of orders that are damaged or have been sitting in broiling delivery trucks.
So patients are harmed twice: once by the strained logistics of getting their medicines and again by the painful loss of what is often a community institution.
The death of the retail pharmacy isn’t an accident. It’s being determined by a PBM industry that has driven reimbursement so low as to threaten the viability of an entire industry, sending patients to options—such as mail-order pharmacies—that are often controlled by the PBMs themselves:
- The Federal Trade Commission’s expansive July report on PBMs focused largely on the way that the industry was “squeezing main street pharmacies.”
- The New York Times suggested there are 800 new “pharmacy deserts”—ZIP codes that have lost all of their pharmacies—created since 2015.
- One analysis of Washington State pharmacy reimbursements found that PBMs sometimes marked up medicines in the pharmacies they owned by as much as 35 times as compared with independent pharmacies, capturing the attention of the Wall Street Journal.
That abuse of market power harms the consumer and underscores the need for PBM reform that makes sure that retail pharmacies, and their patients, are protected. Among the legislative measures being discussed in the House and Senate:
- Bans on spread pricing, in which PBMs pay pharmacies less than they are paid by the health plans, raising questions about where those profits flow.
- Pharmacists, too, have called for reforms that do away with any link between PBM compensation and the list price of the medicine, a topic that “Putting Patients First” tackled earlier.
BIO’s View: Patients are at the center of a fragile web of care providers, and a business environment that puts those providers at risk puts patients at risk. That’s why PBM reforms aimed at ensuring that pharmacists are not taken advantage of by powerful PBMs are so important and why a robust PBM reform effort must put the protection of pharmacies at its core.
