CATASAUQUA, Pa. — Pennsylvania’s independent pharmacies are struggling because of revenue decline, under-reimbursement and financial strain.
One local pharmacist said a major part of that problem is prescription drug middlemen.
"Throughout the entire Commonwealth of Pennsylvania, there have been over 50 pharmacies, including some of the chains, that have closed locations," said Vince Hartzell, president of Hartzell's Pharmacy in Catasauqua.
"And if you ask a lot of people, the big reason for that is under reimbursement from the PBMs.”
"We have to remember that the original conception of PBMs is that they had the power to negotiate against Big Pharma. However, we have seen in current practices that that is a real challenge and that the issues around transparency and issues around essentially ensuring that the consumer is doing well at the end of the day is what we have to drive toward.“Neera Tanden, domestic policy advisor to President Biden
Pharmacy Benefit Managers, or PBMs, are separate companies hired by health plans, large employers, unions and government entities to manage prescription drug benefits programs.
The Biden administration this month held a roundtable on lowering health care costs and bringing transparency to prescription drug middlemen.
“PBMs, in this context, can play an important role in negotiating lower drug prices," said Neera Tanden, domestic policy adviser to President Biden.
"We have to remember that the original conception of PBMs is that they had the power to negotiate against Big Pharma.
“However, we have seen in current practices that that is a real challenge and that the issues around transparency and issues around essentially ensuring that the consumer is doing well at the end of the day is what we have to drive toward.“
'Being squeezed out'
Among panelists at the March roundtable was Federal Trade Commission Chairwoman Lina Khan.
“PBMs are supposed to help bring down drug costs, but all too often, the stories that we hear from patients and health care workers instead describe PBMs as dominant gatekeepers who have outsized power to decide how people do or don't receive the life-saving prescription drugs that they need,” Khan said.
Khan also said a probe is under way based on what they are hearing from both doctors and patients. She said they’d like to also hear from community pharmacists who describe what may be unfair and potentially unlawful practices to squeeze them out of the market.
“The problem is the middleman. PBMs are making healthcare costs, especially in the pharmacy world, more expensive for patients."Vince Hartzell, president, Hartzell's Pharmacy
“Despite their popularity with customers, independent pharmacists tell us that they're being squeezed and run out of business due to coercive contracts and punishing fees imposed by PBMs,” Khan said.
Hartzell said he feels just that. He said PBMs often have the power to negotiate prices with drug companies who also offer rebates, but whose rebates are not passed onto the pharmacies.
“The problem is the middleman, PBMs, are making health care costs, especially in the pharmacy world, more expensive for patients and they are severely under-reimbursing pharmacies,” Hartzell said.
The call to action
Hartzell said independent pharmacies, such as his own, often offer more service than the larger chains, including delivery options to more rural areas.
“There are patients out there, especially our most vulnerable, especially our elderly, like our Medicaid and Medicare, that without those services, they would struggle with their health care,” Hartzell said.
“I think that the big difference is the customer service. We will go to probably a level or two, at least, above what most of the chains will to help the customer and that's how we get the business.”Vince Hartzell, president of Hartzell's Pharmacy in Catasauqua
Another locally owned pharmacy is We Care 2 pharmacy in Bethlehem, where Robert Schaffer is a pharmacist.
“It’s kind of sad, because, really, you should be able to go to the pharmacy that provides the best service to you that you're in where, you know, you want to choose your pharmacist and just where you think you get where people treat you the best,” Schaffer said of smaller pharmacies closing.
“I think that the big difference is the customer service. We will go to probably a level or two, at least, above what most of the chains will to help the customer and that's how we get the business.”
Hartzell said the call to action for customers of local shops is for them to advocate for change by calling their congressional representatives and asking for the reform of PBMs and for greater transparency.
“We are all interested in ensuring better transparency in the PBM market so that health plans and their patients can get the best deal possible and lower prescription drug costs,” Tanden said.
In a recent statement, the American Pharmacists Association called Congress’ failure to enact PBM reforms in Medicare/Medicaid a “missed opportunity.”
The organization said it’s a “must-pass” legislation in the 118th Congress.
The American Pharmacists Association has teamed up with several organizations to urge Congress to act before it's too late.
