Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
The impact of Pharmacy Benefit managers on the industry is abhorrent. In no other business model of which I am aware does your chief competitor set the price as to what you are paid. Imagine Chevron setting the price for Exxon at the gas pump. Chevron says that Exxon has to sell gasoline for $.10 per gallon. Totally unrealistic. Yet CVS pharmacy sets the price which I and every other pharmacy gets paid for the medicine which we sell. These prices are very often far below our actual purchase price. It has become very common to lose $40.00--$50.00 and more on each prescription. CVS pharmacy is very happy to set these low reimbursement rates for their competition knowing that we cannot survive. They also exclude themselves from these low rates and pay themselves much higher. They also have access to the patient records (name, address, phone, insurance etc) and the list of medicines which OUR patients are taking. They then mail our customers letters and make phone calls to them to have them switch to a CVS retail pharmacy or CVS mail-order pharmacy. CVS is not alone in these strategies. Optum Health, Express Scripts and every other PBM does the same thing. THIS SHOULD BE AGAINST THE LAW AND IT REEKS OF UNFAIR COMPETITION.