(Washington, D.C) – Several state legislatures and some federal lawmakers have considered a dangerous policy, known as “Forced Pharmacy Closure,” that bars integration between pharmacy benefit managers and pharmacies. If implemented, the result – shutting down hundreds or thousands of pharmacies – would inflict grave economic consequences and put the health of patients at risk, according to a new academic research paper, “PBM-Pharmacy Divestiture: Projected Costs and Health Consequences,” authored by Moiz Bhai, PhD., Associate Professor of Economics at the University of Arkansas at Little Rock.

Dr. Bhai’s research quantifies how a policy mandating pharmacy benefit managers (PBMs) to divest from affiliated pharmacies, including mail-service and specialty pharmacies, would lead to higher prescription drug costs and increased hospitalizations for patients. Specifically, Dr. Bhai’s research estimates that mass pharmacy closures could increase drug costs nationwide by nearly $32 billion and lead to 44,000 more hospitalizations.

Dr. Bhai writes that:  “While intended to address concerns regarding market concentration and conflicts of interest, this structural intervention represents a binding constraint on the market that may produce significant unintended consequences… When drug prices rise, patient adherence declines—particularly for chronic conditions.

This analysis suggests that mandatory PBM-pharmacy divestiture is not a costless intervention. While PBMs exert significant market power, PBM affiliation with pharmacies also generates measurable efficiencies in logistics, inventory management, and price negotiation.”

Key Findings from the Research

• National drug spending is projected to increase by an estimated $31.7 billion (a 3.6% increase).
• Higher costs are estimated to trigger an estimated 44,000 additional avoidable hospitalizations annually, due to reduced medication adherence.

David Marin, President and CEO, Pharmaceutical Care Management Association, released the following statement on the research paper and legislation forcing pharmacy closures.

“This research confirms that policies that force pharmacies to close will create barriers to access, raising costs and making people sicker. It’s very difficult to see how the patient benefits from shutting down pharmacies, especially in areas already short on providers. The impact it would have on home delivery of specialty and chronic care medications is also dire. Specialty and mail-order pharmacies provide convenient and affordable access to care for people with complex chronic conditions like cancer. It should be clear that policies like this would not only be disruptive to patient care, but also potentially put them in great danger.”