Pharmacies Struggle to Survive as PBMs Squeeze Reimbursements

Pharmacists across Pennsylvania have been hit with a significant blow to their reimbursement rates for certain drugs dispensed to Medicaid patients. The changes, implemented on October 1st, have left many pharmacies struggling to stay afloat, with some even losing money on the medications they provide. This complex issue involves a tangled web of managed care organizations, pharmacy benefit managers, and state regulations, leaving pharmacists feeling powerless in the face of these financial challenges.

Pharmacists Caught in the Crosshairs of PBM Practices

Reimbursement Rates Plummet, Putting Pharmacies at Risk

The recent changes in reimbursement rates have had a significant impact on pharmacies across Pennsylvania. In some cases, pharmacists are now losing money on the very drugs they are dispensing to Medicaid patients. Rob Frankil, the executive director of the Philadelphia Association of Retail Druggists, provided a stark example, stating that a 2% reduction on an HIV medication costing ,000 can translate to a loss of per prescription. This seemingly small change can have a devastating effect on the financial viability of these pharmacies.The root of the problem lies in the complex web of relationships between managed care organizations, pharmacy benefit managers (PBMs), and the state's Department of Human Services. Amerihealth Caritas and Keystone First, two of the largest Medicaid managed care providers in Pennsylvania, have partnered with the PBM PerformRX to implement these reimbursement rate changes. However, the Department of Human Services claims that it did not approve these changes, as required by the state's contracts with the managed care organizations.

Pharmacy Closures on the Rise: A Troubling Trend

The impact of these reimbursement rate changes is not limited to individual pharmacies. Over the past year, the pharmacy trade groups in Pennsylvania have reported that more than 140 pharmacies have been forced to close their doors. This alarming trend has been largely attributed to the untenable pharmaceutical reimbursement rates imposed by PBMs and managed care organizations.Pharmacists are often at the mercy of these powerful middlemen, with "take-it-or-leave-it" contracts that leave little room for negotiation. The complex web of contracts and agreements between pharmacies, PBMs, and insurance companies has created an environment where pharmacists feel powerless to influence the terms of their reimbursement.

Regulatory Oversight Lacking: A Failure to Protect Pharmacies

The Department of Human Services' failure to approve the reimbursement rate changes implemented by Amerihealth Caritas and Keystone First highlights the lack of regulatory oversight in this industry. A recent report by the state's Auditor General, Tim DeFoor, accused the Department of Human Services of failing to properly oversee PBMs and monitor its contracts with Medicaid managed care organizations.This lack of oversight has allowed PBMs and managed care organizations to exploit the system, prioritizing cost-savings over the well-being of the pharmacies that serve Medicaid patients. Governor Josh Shapiro has recognized the need for reform, championing a bipartisan bill aimed at reining in the power of PBMs.

Network Leasing: A Loophole Exploited by PBMs

The practice of "network leasing," where PBMs like PerformRX effectively take over the contracts of other PBMs, such as OptumRX, has further exacerbated the challenges faced by pharmacies. This allows PBMs to leverage more favorable contract terms and pay pharmacists less for the same drugs, all while maintaining the appearance of a competitive market.Frankil, the pharmacist trade group leader, expressed his bewilderment at this practice, stating that it "shouldn't work that way" and is "very, very wrong." The lack of transparency and the complex web of agreements between these entities have made it increasingly difficult for pharmacists to navigate the system and advocate for fair reimbursement rates.

Federal Scrutiny Intensifies: A Glimmer of Hope for Pharmacies?

The struggles faced by Pennsylvania pharmacies are not unique. Across the country, federal regulators have been investigating the practices of PBMs, with some lawmakers calling for an expansion of these probes. This increased scrutiny may provide a glimmer of hope for pharmacists, as policymakers and regulators begin to recognize the need for greater oversight and accountability in the pharmaceutical supply chain.As the battle for fair reimbursement rates continues, pharmacists in Pennsylvania and beyond remain steadfast in their commitment to serving their communities. The future of independent and community pharmacies hangs in the balance, and the outcome of this ongoing struggle will have far-reaching implications for the accessibility and affordability of healthcare for millions of Americans.