In the past few years, big pharma has announced plans to enter the health care industry by installing in-store clinics. However, today some of those plans are not realized and those that were tried are abandoned or reduced. In addition, the pharmacies themselves are disappearing.
Almost One in three pharmacies have closed nationwide since 2010, according to a joint study by researchers from 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 medical costs. Few pharmacies make it very difficult for patients to fill a prescription. In addition, it limits access to essential health care services including:
- Medication management, including reviewing patient medications to improve efficacy and safety.
- Vaccines and immunizations for flu, shingles, pneumonia, and other common illnesses.
- Compounding, where the pharmacist customizes the medication to meet the specific needs of the patient.
- Basic health checks such as blood pressure checks, cholesterol checks, and glucose monitoring.
“At the same time that many states are making efforts to expand the scope of pharmacy services beyond drug dispensing to include the provision of preventive and emergency care, we have found that there are—for the first time in at least a decade—fewer pharmacies available. give 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 increase health disparities in obtaining prescriptions and other important pharmacy services, such as vaccinations and pharmacist-prescribed medications, including contraceptives, HIV prevention medications, and opioid disorder treatment,” said first author Jenny Guadamuz. , PhD., MSPH, assistant professor of Health Policy and Management at UCB.
The Beginning of a Trend
There were 77,510 pharmacies between 2009 and 2015, according to 2019. Research published in JAMA Network. Of that number, 9,568 were closed while 14,614 new pharmacies were opened. As a result, only one of the eight pharmacies was closed at that time.
The new study covers six years more than the 2019 study. That’s when closures accelerate to one-third.
A new UCB-USC study identifies 2018 as the year pharmacy’s overall decline began. Notably, that decline coincides with an increase in relationships between pharmacy benefit managers (PBMs) and large health insurance companies.
What PBMs do
Pharmacy Benefit Managers have been around since the 1960s. They handle prescription drug benefits for 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 cost, drugmakers get their products on the drug insurance list of covered drugs, called the formulary.
PBMs also negotiate with pharmacies. A pharmacy is included in the 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 Contribute to Pharmacy Closures
“As highlighted in a recent report by the Federal Trade Commission (FTC), an important factor contributing to the high risk of closure of private pharmacies can be their frequent exclusion from popular pharmacy networks,” said Guadamuz.
PBM control of drug pricing and reimbursement has led to the creation of preferred pharmacy networks. These networks direct patients to certain pharmacies by offering lower prices.
Larger pharmacies benefit greatly from preferred networks because they can pay wholesaler-specified prices. However, local independent pharmacies are finding it difficult to compete. As a result, independents are twice as likely to close as their supermarket counterparts.
However, pharmacies do not get all the benefits. PBMs get a bigger cut of the pie because they charge insurers a higher price for the drug than they pay when they return it to the pharmacy. This practice is called “spread pricing”. The difference between the prices PBMs charge insurance companies and what pharmacies pay spreads and goes into the PBMs’ pockets.
You might think that price spreads would put PBMs and pharmacies at odds. Do it for independent pharmacies. However, the big chains didn’t just accept these middlemen – they climbed into bed with them.
Who Controls Your Orders
Three PBMs dominate the pharmaceutical industry, according to the Federal Trade Commission. Caremark, Express Scripts, and OptumRX handle 80% of drug claims in America. They are also 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.
Uneven Impact
A UCB/USC study found that one-third of counties in 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 closures in Black communities reached 37%. Latinx neighborhoods represent about 35% of foreclosures and predominantly white neighborhoods account for 27%.
“Our findings suggest that closures may increase health disparities in obtaining prescriptions and other important pharmacy services, such as vaccinations and prescription medications, including contraceptives, HIV prevention medications, and opioid disorder treatment,” Guadamuz said.
“Aside from protecting pharmacies in underserved areas, expanding pharmacy health care services may improve the affluent while failing to address the health needs of communities disproportionately affected by the closure of pharmacies, especially black and brown people in low-income urban areas,” he said. added.
Congressional Action/Inaction
After two years of hearing and talking about reforming PBMs, Congressional leaders announced on Tuesday the 27th that they will take action. Measures that would have eliminated price spreads and improved transparency for PBMs were included in the original spending bill. However, a bipartisan deal that would have made that happen was scrapped at the urging of President Donald Trump and Elon Musk. Trump and Musk have not directly opposed the PBM reforms. They are against the cost of all debt.
Trump wanted a scrapped spending bill that included an increase in the national debt. However, Republicans joined with Democrats to strike that down and ultimately pass a bill that would keep the government running until March.
Read more:
- These are the Top 3 Most Expensive and 2 Cheapest Pharmacies
- Caffeine May Affect Gut Health Unexpected Findings
- Fighting Rising Drug Prices
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