COVID-19 continues to spotlight the importance of pharmacies for communities across Minnesota. From the first days of the pandemic, pharmacists understood their role as many patients’ closest and most trusted health care provider. From providing patients with COVID-19 tests to dispensing prescriptions and giving critical medical advice, they sprang into action.
Now, independent pharmacies have been added to the Minnesota vaccine provider pool, and this change has been immensely helpful in getting doses out faster and more efficiently, especially to rural and underserved populations.
Unfortunately, despite their importance, independent pharmacies struggle to compete against big-box stores, declining reimbursements, and the ever-changing prescription-drug market. One in eight independent pharmacies closed between 2009 and 2015.
Minnesota has seen more pharmacies close in the last decade than any other state, and the strain on the remaining businesses has only grown during the pandemic. It’s particularly concerning when underserved and rural communities lose access to their closest, most reliable provider.
While there are a number of factors leading to the decline in community pharmacies, the biggest threat is pharmacy benefit managers, or PBMs. Unfortunately, PBMs’ unchecked influence has led to them controlling nearly all parts of the prescription-drug market, at the detriment of community pharmacies, plan sponsors, and patients.
Pharmacy benefit managers remain one of the most mysterious entities within the health care industry, despite being larger than companies like General Motors and Bank of America. For a really long time, they have capitalized on this unfamiliarity, distorting the prescription-drug market, driving up medication costs for consumers, and forcing community pharmacies to close.
Pharmacy benefit managers are middle men who oversee prescription-drug programs for commercial, employer, and government plans. Once created to lower prescription-medication prices, these entities now have the power to decide which medications are covered by insurers and which pharmacies a patient can access. This not only puts pharmacies at a disadvantage but patients too. And because PBMs control whether a pharmacy can care for certain patients, contract negotiations are one-sided, leaving small pharmacies at a major disadvantage.
Independent pharmacies know they cannot compete against multibillion-dollar corporations, so many look to pharmacy services administrative organizations for representation. These organizations, while relatively unknown, help pharmacies navigate the complexity of the prescription drug market, representing them during contract negotiations to strengthen their voices against PBM contract terms. These organizations also communicate with pharmacy benefit managers on behalf of pharmacies and handle the administrative burdens of running a business so pharmacies can concentrate on patient care.
Despite the best efforts of these organizations, pharmacy benefit managers still have the upper hand. The fact is, pharmacists are forced to work with PBMs, and PBMs use it to their advantage.
It is welcome news to see our lawmakers finally beginning to not just understand pharmacy benefit managers, but to crack down on them.
Moving through the Minnesota Legislature is a bill (SF 2178) that would give the state more oversight into PBM bidding information. This would create transparency and competition within the market and be a positive step toward lowering drug costs.
However, I would caution lawmakers against pharmacy benefit managers. In an effort to detract from the increased scrutiny, PBMs are already trying to complicate things for lawmakers, pinning pharmacy services administrative organizations as middle men with influence in the prescription drug market. The truth is, the organizations have no power over the price of medications, and PBMs are simply showing just how deceitful they can be.
Local pharmacies play a fundamental role in improving public health, and that is more important than ever. I hope lawmakers continue fighting to improve the health care system for patients while also protecting pharmacies and the entities, like pharmacy services administrative organizations, that help them to do their jobs effectively.
Sarah K. Derr of Maple Grove, Minnesota, is a doctor of pharmacy and the executive director of the Minnesota Pharmacists Association (mpha.org).