Independent Pharmacies Say Drug Middlemen Are Making Them Sick

Published by Bloomberg Health Care Blog

Independent pharmacy groups in several states are sick of the low insurance reimbursement rates that middlemen, known as pharmacy benefit managers, or PBMs, pay them after drugs are dispensed and they’re pushing for greater oversight of the drug middlemen.

PBMs include companies like Express Scripts Holding Co., CVS Health Corp.’s Caremark, and UnitedHealth Group Inc.’s OptumRx, and independent pharmacies say those companies’ practices may threaten the survival of nonchain pharmacies.

The PBM reimbursement rates and post-sale fees they charge pharmacies are challenging the survival of independent pharmacies, according to the Alexandria, Va.-based National Community Pharmacists Association, a trade association for independent pharmacies, more than 80 percent of which are located in small population centers.

Moves are afoot in state legislatures, including Arkansas and Kentucky, to increase government regulation of PBMs.

In Kentucky, for example, a state Senate committee approved a bill Feb. 14 that would end state Medicaid payments to pharmacy benefit managers for managing the state program and let the state use the money to administer its own pharmacy benefits program.

“[PBMs] currently set all the rules with little to no government oversight,” Kentucky state Sen. Max Wise (R) said in a statement. “As a state senator, taxpayer, I don’t think that’s right.”

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