The future stability of small-scale, local pharmacies across the nation hangs in the balance, Robert Annichario, proprietor of Delco Drugs store in Eltingville, declared on Thursday. Unless the conditions enveloping these vital community lifelines change, the demise of Destro Drugs may be imminent. He didn’t stand alone in this declaration, accompanying him was a consortium of fellow Staten Island drugstore owners, along with advocates for their enterprises, who had assembled alongside Rep. Nicole Malliotakis (R-Staten Island/South Brooklyn). The objective was clear – to explore viable strategies to ensure these small pharmacies continue operating.
The primary cause of contention during this assembly was unmistakably the role of Pharmacy Benefit Managers (PBMs) in the pharmaceutical landscape. PBMs, the entities responsible for overseeing prescription drug plans, were initially created to streamline the process of drug distribution. Astoundingly, these organizations have morphed into forces commanding a significant stake in the financial turnover of health service industry, causing perturbation to lawmakers and the local pharmacy owners.
Congresswoman Malliotakis identified the ‘vertical integration’ of PBMs into larger health corporations as particularly disconcerting. This mechanism essentially means that a PBM, such as CVS Caremark – the market leader with a dominating 34% share as per FTC records, is an integral part of a broader entity, in this case, the CVS Health Corporation. This composition includes retail pharmacies, healthcare providers, and the insurance behemoth, Aetna.
Adding to the CVS empire are other prominent PBMs like Express Scripts and Optum Rx, owned by Cigna, and UnitedHealth Group respectively. Their capacity to influence pricing and guide customers away from neighborhood pharmacies plants these local businesses at a colossal disadvantage. As Malliotakis duly noted, ‘It’s truly predatory. No two ways about it.’.
Documenting an instance of this destructive predatory mechanism, Mayank Parikh, owner of Super Health Pharmacy where the gathering took place, narrated the case of a Type-2 diabetic patient in need of Trulicity. The drug’s cost to the store was a whopping $1,000, however, the reimbursement offered by the patient’s PBM merely covered $900. Parikh hesitated to fill the prescription, given the immediate loss.
His original suggestion to the patient was to seek help from a CVS pharmacy. However, upon discovering the patient would be charged a $100 co-pay instead of the $4 co-pay at Super Health, the local pharmacist felt obliged to step in. ‘Our foremost obligation is towards the patients,’ Parikh stated, ‘To uphold our commitment, we had to proceed with the order. It’s just indicative of how if we keep bending, we’ll soon break.’
The demise of local pharmacies is not just a chapter in the Staten Island story. It’s a nationwide epidemic, with an approximate daily closure of one independent pharmacy, according to estimates from Katie Krell from the National Community Pharmacists Association. The association is a vanguard for these independent pharmacies, pressing for change and relief in these unfavorable circumstances.
To mitigate the sweeping impact of PBMs, Malliotakis has aligned herself with multiple legislative measures, intent on reining in their influence. These could be the national differential for community pharmacies, offering a lifeline in turbulent times. The inaugural proposal, named Protecting Patients from Middlemen Act, seeks to abolish excessive patient charges by drug plans and PBMs attached to Medicare Part D and Medicare Advantage.
The Protecting Patients Against PBM Abuses Act is another important legislative step. It aims to curtail the money PBMs can amass from contracts related to Medicare prescription drug benefits or Medicare Advantage. Additionally, this Act enforces greater transparency in the mechanisms of healthcare companies.
The DRUG Act, akin to the Abuses Act, is directed towards halting unscrupulous practices perpetuated by PBMs. The Act particularly aims to lessen preferential treatment and augmented payments to pharmacies affiliated with PBMs, a practice that clearly undermines the prospects of independent pharmacies.
Further combating these pressing issues, the Drug Price Transparency in Medicaid Act aspires to enforce stringent pricing guidelines on PBMs interacting within the Medicaid sphere. The Act also seeks to escalate funds allotted for pharmacy surveys while promoting their public accessibility.
In the face of the pandemic, the Equitable Community Access to Pharmacist Services Act proposes extending certain temporary Medicare payments to pharmacies for services such as administering COVID tests and vaccines. This financial relief in the midst of a global health crisis leads to better preparedness and public health response.
The aforementioned bills are currently threading their way through the legislative process. Their endorsement by the Senate and President Joseph Biden is crucial if they are to become law and bring about tangible change to the current predicament.
Though navigating through the politically charged atmosphere of Washington D.C. may seem daunting, Rep. Malliotakis feels optimistic that bipartisan agreement may indeed be within reach. ‘There is substantial interest seen across party lines’, she stated, ‘This collaboration is needed to keep these PBMs in check and introduce significant transparency measures and restrictions streamlined to curb unethical practices.’
She further asserted that these strategic steps aren’t merely policies, rather are measures dedicated to safeguard communities and citizens. They reflect collective, bipartisan effort to tackle the blatant predatory practices of PBMs. She maintains optimism that these significant measures might take shape before year-end.
The repercussions of these actions would be felt beyond regulatory circles – they have the capacity to truly alter the landscape of health provision across the United States. The successful enactment of this legislation could mark the starting point of restoring the balance and preserving the invaluable service of local pharmacies to their communities.