Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
I am a registered pharmacist and the owner of Southwest Pharmacy and Advanced Medication in Carlsbad, New Mexico. I am also the Chairman of the New Mexico Pharmacy Business Council, which is the advocacy arm of American Pharmacies and speaks for independent pharmacists in New Mexico. I am also the incoming president of the New Mexico Pharmacist Association and served on the New Mexico Board of Pharmacy for 13 years. I am writing concerning a problem that plagues New Mexico community pharmacies and increasingly impedes our ability to serve our patients. Pharmacy Benefits Managers (PBM's) are about to drive me out of business. PBM's dictate the cost they will reimburse me at that are increasing below what I can buy for and dispensing fees have eroded to such a low level that I actually often dispense prescriptions at a loss. We are forced to accept what they dictate and challenges mostly are rejected. The cost they reimburse at are not justified by facts or based on market prices available to our pharmacy. PBM mergers and acquisitions have created a market place monopoly where the 3 largest control about 70% of the marketplace. About 90% of my patients are covered by a healthcare plan that utilizes a PBM to manage their pharmacy benefit. PBM contract offers are aggressive and force pharmacies to agree with what they offer or lose access to large populations of patients. It really is take it or leave it and to our own detriment and commitment to our patients that we have had to accept the reimbursement offered. The difficulty is that the payers get to determine my cost using formulas and MAC values that are not based on real market data and they operate without transparency and accountability. If PBM's continue to monopolize, Health plans and large chain pharmacies continue to control and dictate the cost below what independent community pharmacies can buy for it will be the death of the local independent community pharmacy community and that will be a tragedy. My patients come to me, depend on my help and stay with me because they don't get the services they need at the big box. PBM's process claims, collect rebates and make a ton of money off the backs of the industry, the patient, and the community pharmacy. Thanks Danny Cross RPh.