OHIO, USA — One by one they are closing. Small independent pharmacies are becoming a thing of the past, as more than 250 have closed across Ohio since 2014.
“When independent pharmacies close, they are leaving a pharmacy desert,” said Ronna Hauser, senior vice president of policy for the National Community Pharmacist Association.
A study in the Journal of American Medical Association showed that those without easy access to pharmacies are more likely to fall behind in taking medications and they see more medical problems than those with easier access to medications via local pharmacies.
Nowhere is that more evident than in Plain City in Madison County, about a half-hour drive northwest of Columbus.
Joe Craft used to own Plain City Druggist and three others in central Ohio until February when he said he was forced to sell to Walgreens.
“It's really sad, and it's angering because I had plenty of customers. My wife and I have done this together for 25 years. It's all I've ever wanted to do, and it's all over because of greed. We've been struggling for the past three years. Last year we lost $311,000,” he said.
Craft walked us through the barren shelves and empty pharmacy counter.
He blames his demise on PBMs or Pharmacy Benefit Managers.
“We've got a crisis in America right now. America needs to wake up if they want to keep this vital healthcare pharmacy infrastructure, the government needs to get some money out to pharmacy,” said Craft.
The Pharmaceutical Care Management Association is pushing back on the contention they are to blame for rising drug prices, instead pointing the finger at pharmaceutical companies themselves and arguing that PBMs are helping to drive down the price of medications.
Congress is currently considering various proposals to "delink" pharmacy benefit company compensation from the list prices of drugs, an action that would have a huge impact on prescription drug rebates.
Pharmacy benefit companies use rebates as one tool to help control drug costs for health plan sponsors. As such, policies that put those rebate dollars at risk also risk harming the downstream users of rebates: health plan sponsors and patients.
For example, economist Casey Mulligan concluded that a “delinking” policy in Medicare Part D would raise costs for patients and Part D plan sponsors up to $18 billion annually. As was aptly pointed out recently by Matrix Global Advisors, “The desire to control or restrict PBMs stems from a misconception about the role they play in the pharmaceutical supply chain.”
Pharmacy benefit managers are entities that administer prescription drug insurance benefits. Their key functions include negotiating prices with drug manufacturers and pharmacies, establishing drug formularies and pharmacy networks, and processing drug claims. PBMs are currently attracting critical attention from policymakers.
“I need $12 or $13 per prescription,” said Craft.
Instead, he said he was getting half that in reimbursements from his PBM.
“There's no negotiating. It's take it or leave it,” he said.
Last year, Reuters reported a group of pharmacies filed a proposed class action lawsuit accusing Cigna Group pharmacy benefit manager unit Express Scripts Inc. of conspiring with another company to charge higher fees and reimburse pharmacies at lower rates.
"We are committed to reimbursing network pharmacies fairly and will vigorously defend ourselves against the baseless allegations in this complaint," Express Scripts said in a statement.
In February of this year, Ohio Attorney General Dave Yost joined a bipartisan coalition of 39 attorneys general in urging the U.S. Senate and House of Representatives to engage in meaningful debate and reform of the current practices of pharmacy benefit managers.
Nearly a year earlier, Yost filed the first of its kind lawsuit accusing pharmacy benefit managers Express Scripts and Prime Therapeutics of using a little-known, Switzerland-based company to illegally drive up drug prices and ultimately push those higher costs onto patients who rely on lifesaving drugs such as insulin.
“PBMs are modern gangsters,” Yost said in a statement. “They were designed to protect and negotiate on behalf of employers and consumers after Big Pharma was criticized for overpricing medications, but instead they have absolutely destroyed transparency, scheming in the shadows to control drug prices on all sides of the market.”
Craft said running an independent pharmacy is akin to pulling a one-armed bandit at a slot machine. He said he doesn’t know from one prescription to the next whether he will make a profit on the drug or not until it’s sold. The reason has to do with clawbacks from the PBM, especially when it pertains to filling prescriptions under Medicaid Part D.
Craft showed his spreadsheet to illustrate the problem. He said that since 2016, he lost nearly $2 million in clawbacks.
“Ultimately the pharmacy becomes a purveyor of a casino and what do we know about casinos? The house always wins. So from a pharmacy perspective, it becomes very unpredictable whether or not a certain claim sitting in front of you will be a winner or a loser,” said Antonio Ciaccia, president of Three Axis Advisors which studies prescription drug pricing. "The PBMs lower the cost of drugs that they pay for, but the rub has always been whether or not they are passing along the savings they are negotiating back to the end payer whether that's the patient; the employer; or a combination of both. The PBMs are setting the price of the drug at the check-out counter, they can be artificially low or artificially high. When it's high, the patient is overpaying for medicine."
The closing of Plain City Druggist is like a funeral for a friend. For many of its customers, it’s the only pharmacy they’ve known for more than two decades. The closing means there are now just two independent pharmacies for all of Madison County.
“We've come to Joe's for 20-some years. When we heard he was closing, I panicked because I didn't want to go Walgreens because that's further away from me," said resident Jody Lentz.
“I've been coming here for 24 years every day,” said Steve English, who comes to the pharmacy to fill 20 prescriptions for himself.
The closing of independent pharmacies is not over, according to a recent survey by The National Community Pharmacist Association.
“32% said they are considering closing their doors this year because of the pressures from these pharmacy benefit managers,” said Hauser.
The death of Plain City Druggist is more than a loss of a pharmacy, it's a loss of community too.
“It's just a shame. It's just a shame we don't have a pharmacy anymore,” said English.
In March, Republicans and Democrats attempted to pass legislation to reform PBMs under a $1.2 trillion government funding bill, but the measure failed to receive a majority vote. Lawmakers in both chambers said they are not giving up.
The last opportunity to pass the reform package in this Congress likely won’t happen until after the November election.
A White House roundtable was held to discuss reforming the drug supply chain including the power of PBMs.
“PBMs say that they help bring down drug costs. But the stories we hear from patients and healthcare workers instead describe PBMs as dominant gatekeepers who have outsized power to decide how people do or don’t receive the life-saving prescription drugs they depend on,” said Lina M. Khan, chair of the Federal Trade Commission.