In case you missed it, a recent study conducted by Dennis Carlton, Ph.D., professor emeritus at the University of Chicago Booth School of Business and former chief economist at the U.S. Department of Justice Antitrust Division, debunks misconceptions that pharmacy benefit managers (PBMs) are putting independent pharmacies out of business. Among other findings about the value of PBMs, the study also disproves the notion that PBM-affiliated pharmacies somehow increase prescription drug costs.

A strong relationship between PBMs and pharmacies means a better experience and more affordability for patients, which is why pharmacy benefit companies work closely with pharmacies of all sizes to support patients’ access to prescription drugs.

Key findings from Dr. Carlton’s report include:

PBMs do not put independent pharmacies out of business: 

• Independent Pharmacy Locations Have Increased: According to industry data analyzed by Dr. Carlton, the number of independent pharmacy locations increased by 9% between 2011 and 2021.
• Gross Margins Remain Stable: The gross margins of independent pharmacies have not fallen over time, holding at roughly 23% from 2011 through 2021.
• Reimbursement Rates Higher to Independent Pharmacies: Data shows that reimbursement rates paid to independent pharmacies are generally higher than the reimbursement rates paid to non-affiliated chain pharmacies, for both non-specialty branded drugs (4% higher for independents) and non-specialty generic drugs (24% higher for independents). 

PBM-affiliated pharmacies are not increasing costs:

• PBM-Affiliated Pharmacies Receive Lower Payments: The data contradicts the claims that PBMs are using their affiliated pharmacies to raise costs for plan sponsors and members. When comparing the total payments by plan sponsors and members, payments for all drugs dispensed at affiliated pharmacies are roughly 4% lower than payments for the same drugs at non-affiliated pharmacies.

The analysis provides further evidence that PBMs work to provide patients with a higher quality, lower cost pharmacy experience. Pharmacy benefit companies are committed to partnering with pharmacies to increase patient access to prescription drugs. As just one example, PBMs offer innovative programs to support rural pharmacies through higher reimbursements, tailored rural pharmacy networks, and programs to advance clinical services.

Lawmakers should consult Dr. Carlton’s study when considering policies to lower prescription drug costs and recognize the critical role that PBMs play in creating access for patients and supporting independent pharmacies.

Read Dr. Carlton’s full report HERE.

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PCMA is the national association representing America’s pharmacy benefit companies. Pharmacy benefit companies are working every day to secure savings, enable better health outcomes, and support access to quality prescription drug coverage for more than 275 million patients.