Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
I am a small business owner of four independent pharmacies in the state of Idaho. I have been in the pharmacy business for over 20 years. In those short years I have seen first hand the negative impact PBMs have had on my small business, the cost of health care, and on the health of individuals in my state. As a small business owner I can compete with big chains like Walmart and others in the industry to deliver quality health care. I CAN NOT however, compete with "BIG BULLY" PBMs and their anti-competitive contracts that are destroying healthcare and raising costs. PBMs have not contained costs, they are instead costing the healthcare system more money through their lack of transparency. They continually pay non PBM owned pharmacies, like the ones I operate, less money than is reimbursed to the pharmacies that they own. They have "take it or leave it" contracts that I have no ability to negotiate and they can change their reimbursements at any time and for any reason. The worst part is they do not have to offer any justification for their actions. These Business practices are unfair and should raise concern with the FTC, especially as PBMs scramble to get bigger and try to acquire a bigger piece of the health care pie. I constantly have to decide whether to turn away patients because reimbursements from PBMs are below my cost to purchase items. Refusing to fill prescriptions at a loss is against my contract according to the PMBs. I am expected to fill prescriptions for less reimbursement than what I bought the item for. When I contact PBMs for information on where I can purchase an item that would meet their reimbursement standard, or ask them for justification on why the reimbursement price is so low, or ask them to up the reimbursement based on my acquisition, I get the following response "request denied". A good example is on October 26th CVS/Caremark slashed their reimbursements on most of their generic drugs by over 50% with out any warning and with out any justification. I have now filled over half of my Caremark claims at a loss for the month of November. When I ask for justification on pricing and for an increase in pricing, i get no response from this unregulated PBM. Why did this PBM do this and jeopardize the health of the patients involved, I can only guess it centers around money and lack of transparency. Patient health will ultimately suffer and health care costs will increase if patients do not have a competitive market from which to select their healthcare. IF transparency laws were enacted for PBMs that would force them to operate in the sun light instead of behind closed doors, the cost of health care would go down, patients health would be better, and my pharmacies that serve an important function in the lives of so many people may still be in business tomorrow. PBMs are not the helpful, cost-savings third-party administrators they portray themselves to be. They are industry middlemen profiting at every stage of the prescription drug supply chain from the manufacturers and the dispensers to the plan payers and patient. They are driving up drug prices, promoting the use of certain drugs over others, forcing medical providers to remain silent, including myself, and costing patients and taxpayers tens of millions of dollars every year. The FTC's mission is to protect consumers and prevent anti-competitive business practices. On behalf of patients, drug plan sponsors and small business pharmacies who depend on trusting relationships with their patients, please intervene in these unregulated entities and break up the enormous power PBMs have over the out-of-control cost of healthcare.