Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
Our family lost the community pharmacy we had owned for 28 years because of the relentless attacks of the PBMs against independent pharmacy. When over 90% of a pharmacy's cash flow can come from prescriptions, and ultimately nearly 70% of those prescriptions are filled at a financial loss, it doesn't take a PhD economist to figure out what the result will be. The PBMs claim cost savings...my experience is quite the opposite. The increasingly lower reimbursements, claw-backs, obstructive formularies, prior authorizations, behind the scene deals with drug manufacturers, complicated and one-sided contracts and a total lack of transparency, regulation and ethics has only increased the cost burden to our health care system. Add to this the fact that the PBMs are the owners of the major competition to community pharmacies- mail order and their own retail pharmacies, many of us have closed, or will be forced to close or sell out to them. This causes less competition, but also causes the closure of pharmacies in rural areas where health care is becoming harder and harder to sustain in these trying times. This glaring conflict of interest has been a matter of desperate debate for a long time, but something needs to be done to address it. Don't get me wrong...I hate over-regulation. But this is one place where regulation is long overdue. For example, pharmacies are required to complete fraud, waste and abuse training every year. In fact, they also must submit verification to the PBMs of this as well. What form of FWA training and compliance do the PBMs train for or practice? I have long wondered who made the PBMs the arbiter of community pharmacy in this subject, among others. Throughout my career, patient outcomes have been a priority. However, in order to continue helping patients to positive outcomes, a health care provider must make a decent profit in order to stay in business and make a living. Now community pharmacists are spending much of their time doing the PBMs dirty work for free (or at a loss). Please consider carefully the task with which you are entrusted. Thank you for your attention.