Cost reform would benefit pharmacies and consumers
As a practicing pharmacist in Virginia and a member of the Virginia Pharmacists Association (VPhA), I would like to offer my take on the plight of Virginia pharmacies and pharmacists.
In her Feb. 11 column (“Legislative proposals may save Virginia pharmacies”), VPhA Executive Director Jamie Fisher spoke of pharmacy benefits managers (PBMs), the middlemen who negotiate drug prices between insurance companies and drug manufacturers and set reimbursement rates for pharmacies. On the surface, their function sounds innocuous enough, but there is a dark side.
Fisher speaks about how a PBM negotiates with drug companies and receives rebates from them, and she talks about how this process is opaque to payers such as employer-sponsored plans, Medicaid, Tricare, Medicare Part D, etc. Additionally, three PBMs control 80% of the pharmacy benefits market (CVS Caremark, Express Scripts and Optum Rx).
It goes without saying that drug costs are skyrocketing. The rebate scheme, as mentioned by Fisher, determines which drugs appear on a PBM’s “formulary.” Others are excluded or require “prior authorization.” This ploy increases the costs to consumers … and profits for the PBMs. Further, the rebates are not passed down to the employers/covered patients to reduce their premiums and out-ofpocket costs. A pharmacy’s reimbursement for dispensed prescriptions are so laughably low that many community pharmacies (independent drug stores in particular) are finding it almost impossible to survive.
Today, to dispense life-saving prescription drugs to the public is a money-losing endeavor. As an example, whenever a local community pharmacy dispenses Victoza, Ozempic, Wegovy or Mounjaro diabetes injectables (whenever they are available to stock), the pharmacy will receive from the combined patient copayment/PBM reimbursement between $20 to $30 below the acquisition cost per prescription. For other expensive diabetes drugs, my employer has experienced losses of $30 to $50 below cost per dispensed prescription depending on days-supply quantity. Our pharmacy also was recently reimbursed $100 below cost on a dispensed prescription for Xarelto (no generic available).
Pharmacy contracts with PBMs are a take-it-or-leave-it affair. As pharmacies, we either do not participate — refusing a PBM’s contract conditions — and die a certain death, or participate and slowly die a “death by a thousand cuts.” Pharmacies can neither administer enough clinical tests and immunizations, nor sell enough greeting cards, over-the-counter drugs, and sundries to make up for that shortfall.
VPhA is fond of saying to its members, “If you don’t have a place at the table, then you’re on the menu.” Folks, we community pharmacists are on the menu. Those of us who are involved in direct daily patient care have little clout in the pharmacoeconomic arena — directly or politically. A disturbing fact that I discovered is that the Congressional Budget Office relies on a panel of industry advisers from the PBM industry to guide its policy making decisions. Talk about the fox guarding the hen house!
This problem did not occur overnight and it will not be solved overnight. There is a long road ahead for the profession of pharmacy to right the wrongs that PBMs are committing against it. I echo the call by Fisher by asking that you act now by contacting your state delegates/senators to support budget amendments 288#34S and 288#31H. These measures would provide full transparency in fees and rebates, reduce administrative costs and help local Virginia pharmacies participating in Virginia Medicaid to receive adequate reimbursements to help them continue to serve their communities. This is but one step in the right direction.