A few years ago major pharmacies announced plans to move into healthcare by incorporating clinics in stores. However, today some of those plans are unfulfilled and those that were attempted are either abandoned or curtailed. In addition, the pharmacies themselves are disappearing.
Approximately one in three pharmacies have closed across the country since 2010, according to a joint study by researchers at the University of California – Berkeley (UCB) and the University of Southern California (USC).
Public Health
According to the report, those closures have a significant impact on public health, including the cost of treatment. Fewer pharmacies make it more difficult for patients to fill prescriptions. In addition, it limits access to essential healthcare services including:
- Medication therapy management, which involves a review of a patient’s medication regimen to optimize its effectiveness and safety.
- Vaccines and immunization for the flu, shingles, pneumonia, and other common diseases.
- Compounding, where a pharmacist customizes medications to meet specific patient needs.
- Basic health screening such as blood pressure checks, cholesterol tests, and glucose monitoring.
“At the same time many states are making efforts to expand the scope of pharmacy services beyond dispensing drugs to include the provision of preventive and emergency care, we found that there are—for the first time for at least a decade—fewer pharmacies available to provide them,” said USC’s Dima Mazen Oato, PharmD, MPH, PhD, senior author of the study. Oato is an associate professor at the USC Mann School of Pharmacy and Pharmaceutical Sciences.
“Our findings suggest that closures may widen health disparities in access to prescription and other essential pharmacy services, such as vaccinations and pharmacist-prescribed regimens, including contraceptives, medications for HIV prevention, and treatments for opioid use disorder,” said first author Jenny Guadamuz, PhD., MSPH, assistant professor of Health Policy and Management at UCB.
Beginning of a Trend
There were 77,510 pharmacies in existence between 2009 and 2015, according to a 2019 study published in JAMA Network. Of that number, 9,568 closed while 14,614 new pharmacies opened. As a result, only one in eight pharmacies closed during that period.
The new study covers six more years than the 2019 research. It is during that time closures accelerate to reach one in three.
The new UCB-USC study pinpoints 2018 as the year the net decline in pharmacies began. Notably, that decline coincides with an increase in ties between pharmacy benefit managers (PBMs) and large health insurance companies.
What PBMs Do
Pharmacy Benefits Managers have been around since the 1960s. They administer the prescription drug benefit of health insurance plans.
One of the primary functions of a PBM is to negotiate drug prices with manufacturers. By agreeing to sell their drugs below the list price, pharmaceutical makers get their products included in an insurance drug plan’s list of covered prescriptions, called a formulary.
PBMs also negotiate with pharmacies. A pharmacy gets placed in a drug plan’s network if it agrees to dispense drugs at prices set by the PBM.
Among other things, PBMs also process pharmacy claims.
PBMs Impact on Pharmacy Closures
“As highlighted in a recent Federal Trade Commission (FTC) report, a key factor contributing to the higher risk of closure for independent pharmacies may be their frequent exclusion from preferred pharmacy networks,” said Guadamuz.
PBM’s control of drug pricing and reimbursement has led to the creation of preferred pharmacy networks. These networks steer patients to specific pharmacies by offering lower prices.
Large chain pharmacies benefit the most from preferred networks because they can pay the prices dictated by the middlemen. However, local independent pharmacies find it hard to compete. As a result, independents are twice as likely to close as their big store counterparts.
However, the pharmacies do not reap all the benefits. PBMs get a large cut of the pie because they charge insurers a higher price for a drug than they pay in reimbursement to the pharmacy. That practice is called “spread pricing”. The difference between the price PBMs charge insurance companies and what they pay pharmacies is the spread and it goes into the pockets of PBMs.
You might think that spread pricing would put PBMs and pharmacies at odds. It does for independent pharmacies. However, the big chains have not only embraced these intermediaries – they have climbed into bed with them.
Who Controls Your Prescriptions
Three PBMs dominate the pharmaceutical industry, according to the Federal Trade Commission. Caremark, Express Scripts, and OptumRX manage 80% of drug claims in America. They are also owned by insurance companies.
- Caremark is owned by CVS, which is owned by Aetna.
- PBM Express is owned by Cigna.
- PBM OptumRx is owned by UnitedHealth Group. It also operates a prescription mail-order business.
Disproportionate Impact
The UCB/USC study found that one-third of counties across 41 states saw a decline in pharmacies between 2010 and 2021. As a result, 96.6 million people were affected.
Many of those patients were minorities and people covered by Medicare and Medicaid.
Pharmacy closings in Black neighborhoods totaled about 37%. Latinx neighborhoods represented roughly 35% of closures while predominantly white areas accounted for around 27%.
“Our findings suggest that closures may widen health disparities in access to prescription and other essential pharmacy services, such as vaccinations and pharmacist-prescribed regimens, including contraceptives, medications for HIV prevention, and treatments for opioid use disorder,” said Guadamuz.
“Without safeguarding pharmacies in marginalized neighborhoods, expanding health care services at pharmacies may enhance convenience for more affluent populations while failing to address the health needs of communities disproportionately affected by pharmacy closures, particularly Black and Brown populations in low-income urban areas,” she added.
Congressional Action/Inaction
After two years of hearings and talk about reforming PBMs, Congressional leaders announced Tuesday the 27th that they were going to take action. Measures that would have ended spread pricing and improved transparency of PBMs were included in the original spending bill. However, the bipartisan agreement that would have made that happen was scrapped at the urging of President Donald Trump and Elon Musk. Trump and Musk did not specifically object to the PBM reforms. They objected to the cost of the overall bill.
Trump wanted a stripped-down spending bill that included an increase in the nation’s debt ceiling. However, Republicans joined Democrats to slap that down and eventually pass a bill that will keep the government operating until March.
Read More:
- These Are The Top 3 Most Expensive Pharmacies and 2 Of The Cheapest
- Caffeine May Impact Gut Health Unexpected Discovery Finds
- Fighting Rising Prescription Drug Prices
Read the full article here
