Prescriptions for Profit: Why Pharmacists are calling for reform

KOAM News

Reporter: Samantha Walker

The Brief

• Three companies control a majority of the pharmacy benefit manager market, creating what pharmacists call an unfair oligopoly that forces patients away from local pharmacies

• Local pharmacists say they're losing money on prescriptions, with some patients forced to drive 20-100 miles to find an in-network pharmacy

• Kansas recently passed new legislation to reform PBM practices, while Missouri has advanced similar bills and filed a lawsuit against 19 PBM companies over insulin price manipulation

Pharmacists across the Four-State region say their livelihoods are under threat as major companies tighten their control over the prescription drug market, forcing patients away from local pharmacies and putting independent businesses at risk of closure.

Pharmacy benefit managers, known as PBMs, are supposed to negotiate lower drug prices and determine pharmacy reimbursements for insurance companies. However, local pharmacists say these middlemen companies now wield unfair power that is driving independent pharmacies out of business while inflating drug costs.

"I never thought in my 39 years of being a pharmacist that my conversation would be with a patient and saying, hey, I can't fill your medication," said Brian Caswell, a pharmacist at Wolkar Drugs in Baxter Springs, Kansas.

The emotional toll extends beyond business concerns. Caswell described a patient who had been coming to his pharmacy for 50 years but was forced to leave due to PBM restrictions.

"She left here actually crying. It hurt me," Caswell said.

For pharmacists like Caswell, turning away patients has become a near-daily occurrence as PBMs reimburse pharmacies below the cost of medications.

"I can't justify spending $1,000 on a prescription to lose $150. But what do I do? I mean, I've got a patient here that needs a medication," said Tim Mitchell, pharmacist and owner at Mitchell's Drug Store in Neosho, Missouri.

Three companies control majority of market

While there are many PBMs, three companies control a majority of the market: Caremark RX, Express Scripts and OptumRX. All three are facing backlash from locally owned pharmacies and the Federal Trade Commission for what they consider anticompetitive practices.

The problem has worsened as PBMs evolved from independent administrators to vertically integrated corporations that own insurance companies and pharmacies.

"They started realizing they could make money off of not only the individuals that hired them to do it, but also the drug manufacturers, the pharmacies, the patients," Mitchell said. "And suddenly they're bringing in money from all around and their profits have skyrocketed."

CVS Health Corporation is an example of this vertical integration. The company owns the Caremark RX PBM, thousands of CVS pharmacies, and insurance company Aetna.

"An oligopoly is a great example of what we've created here," said Bill Osborn, owner and pharmacist at Osborn Drugs in Miami, Oklahoma. "Now they're self referring. So now CVS Caremark pays me a claim. Well guess what. I'm competing with CVS Caremark on the retail side. So they're going to write all their plans that push or create different opportunities for patients to go to their pharmacies."

Patients forced to travel farther for medications

The consolidation creates barriers for patients who can only fill prescriptions at PBM-approved pharmacies, often forcing them to abandon their local pharmacy... Continue Reading