Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
I am a community pharmacist serving in a rural population where the closest large chain pharmacy (CVS,Walgreen, etc) is over 35 miles away. Our pharmacy has served the local population for over 25 years, working with our community to keep drug costs down for everyone, and delivering prescriptions and vaccines to those in need. PBMs are compromising the trust that we have developed through the years with our patients by requiring that pharmacists keep silent (via "gag clauses" in their contracts) when we see less expensive, but equally effective alternatives to their "preferred"" status brand or generic drug. Our pharmacy is being charged excessive fees by the PBMs, even as they are reimbursing non-PBM owned pharmacies at rates drastically below costs, virtually causing the pharmacy to pay for the patients' medication. This brings up the obvious conflict of interest arising from PBMs who administer drug benefit plans, mandate that plan enrollees utilize the pharmacies they own or pay a higher co-pay, and reimburse their competitors at a lower rate. Many people across America cannot coordinate the complicated, impersonal mail order systems, and have no way to get to a pharmacy many miles away. These people rely on their community pharmacies to provide medications and personalized medication advice. The large PBMs are not the altruistic, cost-saving administrators that they portray. They are industry middlemen profiting at every stage of the prescription drug supply chain, from the manufacturer rebates that they keep rather than passing on to the consumer, to the preferential drug reimbursement for their PBM-owned pharmacies. Just recently, CVS/Caremark made unannounced cuts to reimbursement rates that were already below cost. If these PBM behemoths continue on without proper regulation, drug costs will continue to rise for consumers, while their access to trusted pharmacists and practitioners will disappear. On behalf of the patients who rely on these small businesses, please regulate these PBMs and break up the out-of-control power that they have on America's health care costs.