(Washington, D.C.) — The Pharmaceutical Care Management Association (PCMA) released the following statement today responding to another incomplete and unbalanced article from The New York Times, that again made sweeping assertions about pharmacy benefit managers (PBMs), this time distorting the relationship between independent pharmacies and PBMs by relying on anecdotes instead of data.

“It is disappointing The New York Times has chosen to once again advance an incomplete and fundamentally unbalanced narrative relying on anecdotes and leaving interviews and input from academic and industry experts out of their reporting,” said JC Scott, president and CEO of PCMA. “While the article cites anecdotes that should be better understood, it leaves out the story of the millions and millions of patients who go to pharmacies and smoothly get access to their medications at the cost they expect. The reality is that retail businesses in rural America of all types — and pharmacies in America of all sizes, including those affiliated and not affiliated with PBMs — face a variety of economic and business challenges stemming from changes in consumer behavior, new types of business competition, and evolution of their market, none of which have anything to do with PBMs.”

“The truth is, PBMs want a healthy retail pharmacy market. PBMs include independent pharmacies in pharmacy networks and reimburse independent pharmacies at higher rates than the retail chain pharmacies because it is so important to have these access points for patients,” Scott continued. “But policies that mandate even higher reimbursement rates and dispensing fees to pharmacies amount to a tax on consumers and employers, requiring them to pay more for prescription drugs. We can’t ignore the reality that consumers don’t want to pay more, and they have the ultimate decision-making power when it comes to where to fill a prescription.”

Here are just a few important points that The New York Times chose to leave out of their latest article:

1. Pharmacies face a variety of challenges unrelated to PBMs. Specifically in rural areas, many other retail stores and health care providers in these communities are facing challenges for a myriad of reasons. For example, customers are increasingly choosing to use online options to get their prescriptions versus traditional brick-and-mortar stores. This is not specific to the pharmacy industry, but in all sectors, e-commerce has increased. The population in rural communities has also declined. Rural counties experienced population loss between 2010 and 2020, losing around 289,000 people, marking the first decade of net population decline in rural America. If there are not as many individuals residing in rural communities, there are fewer individuals to get their prescriptions from their local pharmacy. Pharmacists are also experiencing burnout, like providers in other health care settings. Rural hospitals and nursing homes continue to face challenges from historic staffing shortages, burnout, and chronic underfunding that have forced many critical health care providers to close. To pinpoint reimbursement for filling prescriptions as the leading factor impacting pharmacies is entirely inaccurate when there are a number of factors at play.
2. Chain pharmacies are generally reimbursed at a lower rate than independent pharmacies.According to a 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, 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 percent higher for independents) and non-specialty generic drugs (24 percent higher for independents).
   
   
3. Nationwide, the market for independent pharmacies is stable. Dr. Carlton also concluded that the profit margins for independent pharmacies have actually remained stable and the number of locations has actually increased between 2011 and 2021. While the data shows closures in some areas, it also shows new pharmacy openings, a fact that is often left out of the narrative when discussing the pharmacy market.

   PBMs negotiate with pharmacies and drug manufacturers to drive down costs. Pharmacy benefit companies work to provide patients with a higher quality, lower cost pharmacy experience, which includes supporting independent pharmacies in rural areas nationwide through innovative programs to increase reimbursements on prescription drugs and expanding payments for clinical services. See how PBMs are supporting rural pharmacies HERE.

4. Independent pharmacies aren’t totally independent. Most independent pharmacies hire large negotiating conglomerates, Pharmacy Services Administrative Organizations (PSAOS), to leverage scale and resources on their behalf. Independent pharmacies do not go it alone and are not the small shops negotiating against PBMs on their own. They have sophisticated relationships with PSAOs that are affiliated with and/or owned by drug wholesalers, which are very large corporations (McKesson, Cardinal Health, and AmerisourceBergen). PSAOs help independent pharmacies achieve scale and keep them competitive. PSAOs leverage their membership (i.e., the pharmacies they contract with) to negotiate contracts with other parties in the pharmaceutical supply and payment chain. More than 89 percent of independent pharmacies across the country use PSAOs to interact with PBMs on their behalf.
5. Proposals targeting PBMs would increase patient and employer costs to boost independent pharmacies’ bottom line. At the end of the day, efforts by the independent pharmacy lobby to justify further government intervention that helps independent pharmacies get paid more would increase costs for patients and employers. Take the example of dispensing fees – that cost is predominantly paid by patients, not PBMs. Ike Brannon, senior fellow at the Jack Kemp Foundation, looked into North Carolina state legislation that would impose a mandatory dispensing fee and concluded that, “mandating a payment rate and a per-prescription fee of $10.24 … accomplishes nothing beneficial for patients, and in many instances patients themselves would carry the burden of paying some or all of this mandated fee. The only beneficiaries of the policy would be pharmacies, who would reap higher income from this government-imposed fee.”

Learn more about the relationship between PBMs and pharmacies 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.