(RepublicanView.org) – Despite the Biden administration’s attempt to help pharmacies and consumers by placing limits on pharmacy benefit managers, some pharmacists are now saying the rule change could be more hurtful more than helpful, according to a CBS News report.
Pharmacy benefit managers, also known as PBMs, are companies that were created to help insurers and employers pick medications for their plans. They began in the 1960s, and shortly after, the industry rapidly expanded due to prescription drug spending increasing significantly in the last 50 years. PBMs are basically the middlemen between drug manufacturers, pharmacies, insurance companies, and patients. They can negotiate discounts with drug manufacturers as well as setting payment terms for the pharmacies that dispense medicine to patients. Although there are about 70 PBMs in America, three companies control more than three-fourths of the prescription drug market.
While many groups have complaints about PBMs, one prevalent issue that has beleaguered pharmacies is that PBMs can collect a fee from pharmacies weeks or months after medication is dispensed. These costs have increased exponentially, going from approximately $9 million in 2010 to more than $12 billion in 2021. Many of these costs are passed on to consumers, yet insurance companies claim the fees are what allow them to charge lower premiums.
The new rule imposed by the Biden administration is supposed to go into effect on January 1, but already, pharmacies are seeing issues. While most pharmacist groups supported the rule change, they didn’t realize PBMs would respond by demanding new contracts that cut payments to pharmacies for dispensing medication. According to CBS News, pharmacists said that Express Scripts revealed in contracts that next year, it will be paying 10% less than what it usually pays for wholesale drugs, meaning pharmacies will be losing money on nearly every prescription they fill.
Some pharmacies, especially small, local ones, are worried they’ll need to close their doors—and some already have. A recent study from Drake University reported that nearly 100 pharmacies in Iowa have closed since 2008, with many respondents claiming they will likely need to close their business within the next 12 months.
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