Lynne Fruth, president and chairman of Fruth Pharmacy, shares her insights on the current state of the pharmacy business.
On October 31, 2022, a judge blocked the proposed merger of Penguin Random House and Simon & Schuster, which represents two of the larger U.S.-based publishing houses. This news caught my attention because the decision was based on concern for authors’ compensation and the possible decrease in the diversity of stories that would be published.
Weeks later, another huge company was thrust into the media spotlight after Taylor Swift fans were crying foul over the Ticket Master fiasco. Federal lawmakers jumped into the fracas, and the House Energy and Commerce Committee sent a letter to Live Nation’s CEO Michael Rapino asking the executive to clarify Live Nation’s ticketing process for the upcoming Swift tour and provide a list of actions the company will take to ensure consumers will have better access to live entertainment in the future. Live Nation is the parent company of Ticketmaster.
I love music and good books as much as anyone, and I support the notion that authors, readers, and concertgoers should have equal treatment and access to purchase the products and services they want. What I cannot get past is the idea that overseeing the publishing industry or the event ticket-selling industry should be more important than providing patients in the U.S. with access to safe, affordable pharmacy services in their community. Music and books are great, but medication access is a life-or-death necessity.
Over the past years, patients and pharmacies have seen prices go up for consumers while many pharmacies receive reimbursement so low that their businesses are no longer viable. Large and small retail pharmacies are seeing shrinking payments while PBMs (pharmacy benefit managers) and vertically integrated health companies such as CVS/Caremark/Aetna, Cigna/Express Scripts, and United Healthcare/Optom are experiencing record profits. These three monster corporations are all listed in the top 15 companies in the Fortune 500. Yet, there has been no sense of urgency by government agencies to save pharmacy access as there has been to ensure our teenagers can see a pop star in concert.
When will the FTC, the public, and our federal lawmakers realize that we are on a pathway to disaster? In the past three years, many pharmacies have closed. Bartell Drug, a family-owned chain for 125 years sold out in 2020. Rite Aid announced plans to close 145 stores in 2022 alone. Walgreens has closed 200 stores since 2019 and CVS announced plans to close 900 stores over the next three years. Kroger also announced in September of 2022 that it was ending negotiations with ESI and Kroger has been dropped from ESI Networks. In a public release statement, Kroger President, Colleen Lindholz, stated that the ESI proposal being offered to them was “far out of line with comparable terms Kroger has with all other pharmacy providers, and far outside the industry standard.” This decision will displace thousands of patients who have relied on their local grocer to meet their medication needs, but is it fair to ask Kroger or anything other retail pharmacies to provide services below their cost?
As the president of a family-owned regional chain that operates all 28 of our stores in Appalachia, I see firsthand the impact of these closures. I receive calls every month from smaller communities asking if Fruth Pharmacy can come into their town. The story is always the same; either a small Independent pharmacy can no longer survive and has sold the files to a large chain store located miles away, or the longtime CVS/Walgreens/RiteAid store closed because it “no longer fits their business model.” “No worries,” the chains will tell the patients, “you can drive 15 miles to one of our nearby pharmacies where the records have been sent.”
The fact about closures of retail pharmacies is very simple. Profitable stores in affluent America will not be the ones that will be closed. I believe the pharmacy closures will impact two distinct areas, the urban poor, and the rural communities in America, and this will disproportionately impact black, brown, and poor communities creating an even bigger health disparity. I also see the reality of what happens when a patient living in a rural community no longer has access to a local pharmacy. Many patients cannot afford the expense to travel to another town for the medications, or they don’t even have transportation. These patients rely on family or friends to help them and often hold off getting refills because “they can only make so many trips.” Retail pharmacies have been a safety net in these underserved areas, and the impact of closing stores here will be far-reaching. Less adherence, less oversight by a local pharmacist, and more adverse outcomes that end up at the emergency room.
If you think healthcare is expensive now, just wait until our oldest and poorest patients no longer have access to care in their communities. PBMs and vertically integrated healthcare companies claim they exist for the purpose of lowering healthcare and prescription costs. If that is true, then why are pharmacy costs to patients, employers, and health plans going up sharply while the net cost of medications has gone down?
The proof is in the results. West Virginia passed legislation that has led to reference-based pricing and transparency in commercial plans. Many of the state’s employers have seen a huge drop in their prescription costs while pharmacies are being compensated fairly.
So what is the value in ensuring that local pharmacies survive? In West Virginia, you can see the results of what local pharmacies accomplished during Covid. The state was the first state to vaccinate all nursing home and assisted living patients, and led the way in vaccinating patients over the age of 90, 80, and 70 years old. This was completed largely by local pharmacies working shoulder to shoulder with state agencies and the communities. I know that what Fruth Pharmacy did during the Covid 19 Pandemic saved lives. Fruth did mass testing and events as often as 2-3 times a week, and I am very proud to say that in the first 6 months of the vaccination period, Fruth administer thousands of doses and did not waste a single dose. Not one. Where would Appalachian Ohio and West Virginia have been without Fruth and other local community pharmacies? It is easy to say that Appalachia would have been hit even harder with hospitalizations and deaths.
Even after all this, retail pharmacies find themselves begging for a level of reimbursement that will allow our stores to stay in business. Many pharmacies believe that their stores will not survive even two years without relief.
Now is the time for state and federal governments, agencies, the FTC, and the Department of Justice to consider what America will look like without the local pharmacy. It isn’t pretty. It is time to act while the trend can still be altered. Healthcare belongs in the community, in every community, even if the large PBMs and vertically integrated healthcare companies don’t agree.
The article is originally taken from Pharmacy Times here.