Independent Pharmacies and PBM Reimbursements
Amid PBM mergers creating less competition and growing drug shortages, some independent pharmacies are being forced to make the choice to keep the lights on or turn away patients who need certain medications.
According to a recent article by WWLTV Channel 4 out of New Orleans, customers who are loyal to independent pharmacies are being forced to fill some brand name prescriptions at chain pharmacies.
“It’s disheartening because I believe in shopping local and, you get, I find they give you better treatment here, because they get to know you over the years,” pharmacy customer Denise Schmidt said.
“The patients are pleading with us, ‘Please, I don’t want to go to another store. I have rapport here. We don’t want to leave,’” Diane Milano, Chateau Drugs and Gifts, owner and pharmacist said.
At her drug store, they are having to turn away customers for certain medications. The same is happening at Majoria drug store.
“We’ve been treating and taking care of these people for years, and years, decades, and the hard part is having to walk out there and tell them I’m not getting reimbursed nowhere near to keep treating you,” explained Dennis Bodungen, Majoria owner and pharmacist.
Why the Independent Pharmacy is struggling with PBM Reimbursement
Pharmacy benefit manager companies, or PBMs, are the middlemen between medical insurance companies and pharmacies. They negotiate prices, or the amount of reimbursement to drug stores for filling a prescription. There have been mergers, so three PBMs own around 90 percent of the market, creating less competition. On many high priced drugs, like ones for diabetes, or attention deficit disorder, they reimburse the pharmacy less than their cost. So the drug stores are losing money each time they fill that prescription.
“They’ve gotten so bad this year that we’re underwater on almost every brand name. So, we’re all having to turn them away. We can’t stay in business like this,” Milano said.
“So when you (drug store) spend $1,000 on the drug, and they (PBMs) want to pay you $900 for it, it’s hard to stay in business doing that,” B.J. Guidry, a Majoria pharmacist said.
And that extra cost, they’re not allowed to pass it on to the customers even though some of them ask them to.
“If you do that with Medicaid, you know, you’ll be under the jail,” Milano said.
So to stay open, and pay employees, and keep the lights on, they are no longer filling certain medications.
“These issues aren’t just affecting the independent (pharmacies) you know, I’m getting calls from hospitals, retail pharmacies, and hospitals. I mean, this is very, very far reaching,” Milano said.
Local pharmacies say customers may have to get the high priced medications from mail order pharmacies. The PBMs also own them, but people like Denise don’t want to do that. They want to be able to talk directly to a pharmacist about their personal health needs.
Eyewitness News asked the attorney for the pharmacy benefit manager companies for a response, but he said we was not able to give one. He forwarded our questions for a corporate response. Eyewitness News did not hear back.
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