Local pharmacies are historically central to community life and have been for generations. If they offered a soda fountain counter with round swivel stools, so much the better.
Today’s family pharmacists throughout the area, however, are struggling under an oppressive pharmaceutical insurance middleman system that strips away profit from their prescription counter.
Beginning in the 1960s, Pharmacy Benefits Managers (PBMs) came upon the scene to process drug claims for insurance companies. By the 1970s they were serving as middlemen between manufacturers, insurance companies and pharmacies, adjudicating prices.
Today, PBMs not only adjudicate claims, but now they develop and manage pharmacy networks, determine the list of drugs to be covered by insurance, set co-pay amounts and serve to channel the patient to a particular choice of pharmacy.
According to the Pharmacists Society of the State of New York (PSSNY), PBMs can own their own pharmacies, retail and mail order, and profit from sales and services. The work of the PSSNY is to propagate and protect community pharmacies.
The effect of this progression as PBMs have become “invisible middlemen” has been devastating to local family-owned pharmacies in area towns in New York and Connecticut, endangering their existence and the invaluable service they provide to their patients and the communities they serve.
Today, the three largest PBMs control nearly 80% of the prescription benefits market share in the U.S., according to the PSSNY.
“We are so lucky to have this pharmacy. It’s a blessing,” said Pine Plains resident Ann Noone, a regular customer of the Pine Plains Pharmacy, commenting on Monday, April 8 about the local business and its pharmacist. “He’s done a lot for this town.”
Pharmacist at the Pine Plains Pharmacy since 1989, and owner of the historic corner drug store since 2006, Nasir Mahmood has witnessed the financial squeeze on area pharmacies with some forced to close their doors, victims of the PBM system.
It is the PBMs that pre-determine how much each drug covered under the plan should cost, and this is the amount it reimburses all pharmacies except the large-chain ones they own. Often the reimbursement rates are well below the cost of the drug, putting pharmacies in the position of having to fill a prescription at a loss.
“We cannot wait for PBM reform,” said Mahmood on Wednesday, March 27, describing the current tenuous status of bi-partisan federal legislation awaiting vote in Washington, D.C.
Having served as president of the PSSNY for two years in 2008-09 and having finished a two-year term as chairman of the PSSNY Board in March, Mahmood now continues as a member of that board. He also serves on the National Legislative Committee within the National Community Pharmacists Association (NCPA) working with other pharmacists’ professional organizations promoting new legislation to place limits on PBMs and create an equitable structure of reform and accountability.
Bipartisan bills have passed out of committee and are awaiting floor vote that would provide strict regulation and transparency to the work of the PBMs, improve patient access and lower costs, Mahmood said. The NCPA has achieved some recent success in the long process of bringing bills to the floor for a vote.
A series of Senate and House bills received bipartisan support and convincing vote margins as they emerged from committees. With passage, the various pieces of legislation would bring lower drug costs, greater transparency in the process, require the Centers for Medicare and Medicaid Services (CMS) to define their contract terms, and require PBMs to operate with greater transparency.
The legislation was attached to the government funding package that was passed in late March to avoid a government shutdown, but Mahmood said that at the last minute the PBM bills were stripped out of the package.
Continuing their commitment to PBM reform, however, Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) pledged to press on with efforts to enact the legislation before the end of this congressional year.
The NCPA further reported that on Friday, March 22, a bipartisan group of 21 senators and 51 house representatives signed a letter to their respective leadership, asking for immediate action on PBM reform measures.
Advocacy groups are actively pursuing passage of the legislation having arranged a conference drawing pharmacists from across the U.S. to the national headquarters of the NCPA in Alexandria, Virginia, for a two-day meeting to begin on Wednesday, April 17.
“We’ve come a long way with continued advocacy year after year,” Mahmood said, contemplating his participation in the upcoming meeting. Senators and representatives will be reporting to the conference and encouraging continued advocacy strategies to promote passage of the bipartisan PBM legislation.
One bill would bring transparency to Medicaid drug pricing with annual savings of $1 billion. Another would remove PBMs from negotiating CMS services, and the third would provide for greater transparency, oversight and enforcement through the Federal Trade Commission (FTC).
Independent pharmacies throughout the area have expressed their concern about the issue and joined in the hope that the current efforts toward passing legislation will be successful.
Meanwhile, local and area pharmacists remain in the balance, squeezed by the PBM system and locked out of the price negotiation process. During an interview, Mahmood noted that there is not one independent community pharmacy left open in Columbia County.
“It’s not fair,” he said.
