Congress Must Give Pharmacies Negotiating Power Against Pharmacy Benefit Managers to Preserve Patient Access to Prescription Drugs
To: HEALTH/MEDICAL EDITORS
Contact: Crystal Wright, +1-202-829-0848, for Association of Community Pharmacists Congressional Network
WASHINGTON, May 10 /PRNewswire-USNewswire/ — Pharmacy Benefit Managers’ (PBMs) persistent under-reimbursement to independent pharmacies for Medicare D drugs threatens to destroy patient access to medication counseling and care. Since the Medicare D benefit began, many independent pharmacies have closed because PBMs have under-paid them to fill prescriptions at a loss to their businesses. The Association of Community Pharmacists Congressional Network (ACP*CN) urges Congress to pass H.R. 971, giving pharmacies collective bargaining rights under the US antitrust law to band together and negotiate fairer contract terms with PBMs.
“Neighborhood pharmacies have zero negotiating power with PBMs. They offer us take it or leave contracts that routinely reimburse us $2.00 or less for dispensing a Medicare D prescription — this is less than the cost of a Big Mac! Adding insult to injury, the PBMs then often pay us below the cost we incur for acquiring life-saving prescription drugs to stock our pharmacy,” said Mike James, pharmacist and VP Governmental Affairs, ACP*CN.
“This economic situation has forced many independent pharmacies out of business and when a pharmacy closes, particularly in a remote, rural town, everybody suffers, not just seniors on Medicare. Congress must level the playing to allow pharmacies to have negotiating power against PBMs to ensure patients continue to have convenient access to prescription drug care in this country,” added James.
The Community Pharmacy Fairness Act of 2007, (H.R. 971) co- sponsored by Reps. Anthony Weiner (D-NY) and Jerry Moran (R-KS), would allow for an exemption in the antitrust law, giving independent pharmacies collective bargaining rights to negotiate fairer contract terms and reimbursement rates with PBMs. Presently, independent pharmacies have NO avenues to negotiate with PBMs. They must accept the PBMs’ contract terms or lose the ability to serve life-long patients. H.R. 971 would not increase costs to Medicare or private payors, unless PBMs do as they always do and shift costs to patients in an effort to pocket more profits for their shareholders.
PBMs act as middlemen between drug companies and health insurers, administering the drug benefit for private and government insurance plans, including Medicare D. Giant unregulated corporations, PBMs earn their profits from kickbacks or rebates received from pharmaceutical companies, which drive up drug costs, and by under- reimbursing pharmacy providers.
On average, PBMs reimburse independent pharmacies about $1.50- $2.00 for every Medicare D prescription dispensed. According to a 2007 study conducted by Grant Thornton, the overall cost for a pharmacy to dispense a prescription in 2006 was $10.50. The dispensing fee goes toward paying for the pharmacy’s overhead costs such as rent, utilities, and computer systems. So, for every Medicare D prescription an independent pharmacist fills, he or she incurs a $9.00 loss.
Pharmacists are healthcare professionals just like doctors and nurses. They attend six years of professional school to become experts in medication counseling and care, yet, PBMs regard them as nothing more than retail clerks, ringing up orders. In 2005, 70% of all prescriptions filled in the US, more than 2.3 billion prescriptions, were dispensed by chain and independent drug stores.
If the healthcare paradigm between pharmacies and PBMs doesn’t change soon, there will be a profound negative impact on patient access to medication counseling and care. Congress may even find that some Medicare D prescription drug plan (PDP) sponsors may not be currently fulfilling patient access provisions, as outlined in the Medicare benefit law, particularly for seniors living in rural parts of the country because pharmacies have been driven out of business. It is not unusual to find one pharmacy serving a single town in rural parts of America. If that pharmacy goes out business, all residents may have to travel as far as 30-60 miles to the next nearest pharmacy.
About the Association of Community Pharmacists Congressional Network (ACP*CN)
Based in Raleigh, NC, the Association of Community Pharmacists Congressional Network consists of 20,000 independent pharmacists nationwide dedicated to serving the communities in which they live. ACP*CN is dedicated to the survival and growth of the independent pharmacy owner, who often times is the only pharmacy operating in rural towns across America. For more information visit http:// www.acpcn.org.
Contact: Crystal Wright
202/829-0848
SOURCE Association of Community Pharmacists Congressional Network
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