Independent pharmacies are facing increased challenges as a result of a new rule implemented by the Biden administration that aimed to impose limits on pharmacy benefit managers (PBMs). The rule, which governs Medicare’s drug program, requires PBMs to take most of their “performance fees” at the time prescriptions are filled, rather than weeks or months later as they have done in the past.
PBMs have been notorious for their clawbacks, where they would deduct fees from pharmacies long after a drug has been dispensed. These clawbacks have become a major financial burden, with the cost ballooning from $9 million in 2010 to a staggering $12.6 billion in 2021, according to the Medicare Payment Advisory Commission.
While pharmacist groups initially supported the Medicare rule change, they were taken aback by the response from PBMs. Instead of complying with the new regulations, PBMs have demanded that pharmacies accept new contracts with significant payment cuts for dispensing medications. This puts independent pharmacies in a difficult position, as refusing these contracts could result in the loss of Medicare customers, who would likely turn to the larger PBM conglomerates.
PBMs play a central role in the U.S. drug supply chain, negotiating lower prices for insurers, employers, and workers. However, they have come under fire for draining money from the already expensive healthcare system without providing any additional value. Even national pharmacy chains like Rite Aid, Kroger, and Walgreens have felt the pressure from PBM practices, with CVS Health even closing stores or reducing staff.
The impact of these challenges is felt by in-store pharmacists and technicians, who have been overwhelmed by tight staffing and increased workload. CVS and Walgreens employees have staged walkouts to protest against burnout and patient safety concerns.
The new Medicare rule was intended to address the issues caused by PBMs, but it seems to have backfired, placing additional strain on independent pharmacies. As the healthcare landscape continues to evolve, finding a balance that ensures fair compensation for pharmacies while improving patient access and affordability remains a critical goal.
Frequently Asked Questions (FAQ)
1. What are pharmacy benefit managers (PBMs)?
Pharmacy benefit managers (PBMs) are entities that negotiate drug prices and manage prescription drug benefits on behalf of health insurance plans, employers, and government programs.
2. How do PBMs affect independent pharmacies?
PBMs often require independent pharmacies to accept contracts with lower payment rates for dispensing medications, which can significantly impact their financial viability and sustainability.
3. What is the purpose of the new Medicare rule?
The new Medicare rule aims to address the financial burden caused by PBMs by requiring them to take most of their “performance fees” at the time prescriptions are filled, rather than delaying payments.
4. How have independent pharmacies responded to the new rule?
Independent pharmacies are faced with a difficult decision of either accepting contracts with reduced payment rates or risking losing Medicare customers to larger PBM conglomerates.
5. What challenges do in-store pharmacists and technicians face?
Tight staffing and increased workload have led to burnout among in-store pharmacists and technicians, ultimately affecting patient safety and care.
6. Is there ongoing discussion about finding a solution to these challenges?
Yes, the impact of PBMs on pharmacies and the healthcare system as a whole continues to be a subject of debate, and stakeholders are seeking ways to strike a balance that ensures fair compensation for pharmacies while improving patient access and affordability.