A Third of Independent Pharmacies May Close
/By Pat Anson, PNN Editor
These are tough times for many retail pharmacies and their customers. Big chain pharmacies like CVS, Walgreens and Rite Aid are closing over 1,500 stores, as they grapple with declining sales, higher debt, drug shortages, fallout from opioid litigation, and an overworked, demoralized workforce.
For many patients who had trouble getting their prescriptions filled for opioids and other controlled substances, small independent pharmacies became a welcome refuge from the big chains.
“I'm fortunate to have a compassionate, independent pharmacy that bends over backwards to ensure I have the meds my doctor prescribes. If I was stuck with a chain pharmacy like Walgreens or CVS, my experience would be completely different. Those pharmacies treat pain patients like criminals,” one patient told us.
But now even the independent pharmacies are threatened. About a third of them could close in 2024, according to a dire prediction from the National Community Pharmacists Association (NCPA), a trade group that represents nearly 20,000 independent pharmacy owners in the U.S.
“Nearly a third of independent pharmacy owners may close their stores this year under pressure from plunging prescription reimbursements by big insurance plans and their pharmacy benefit managers,” says B. Douglas Hoey, RPh, NCPA’s CEO.
At issue is a new rule by the Centers for Medicare & Medicaid Services (CMS) that requires insurers and pharmacy benefit managers (PBMs) to implement discounts and price concessions at the point of sale, where a drug is dispensed. The rule is intended to make pricing more transparent for patients, but it’s hurting the bottom line of pharmacies who say the discounts are being unfairly forced on them by insurers.
Part D Prescriptions at Risk
In a recent survey of NCPA members, 32% said they may have to close by the end of the year due to the CMS rule and 93% said they’d consider dropping out of Medicare’s Part D prescription drug program. Most say they are losing money on Part D prescriptions, which don’t compensate the pharmacies for rent, taxes, payroll and other costs of doing business.
“Cash flow for many pharmacies remains in a precarious state, leading to dire concerns for beneficiary access. Our members continue to experience significant harm from egregious Medicare Part D PBM practices,” Hoey wrote in a letter to CMS, which faulted the agency for doing little to stop the PBMs.
Asked which PBMs are causing the most financial stress in the Part D program, almost half the NCPA members identified Express Scripts, with CVS/Caremark coming in at 35 percent.
Hoey says CMS already has the legal authority to change reimbursement practices, but wants Congress to intervene if CMS doesn’t act soon.
“This is an emergency. And if Congress fails to act again, thousands of local pharmacies could be closed within months and millions of patients could be stranded without a pharmacy,” Hoey said in a statement.
NCPA says there are about 2,200 fewer retail pharmacies today than there were four years ago. This has created hundreds of pharmacy “deserts,” primarily in low-income rural and urban areas, where access to a pharmacy is limited or non-existent. Alabama alone has lost 300 pharmacies in recent years.
“With every closure, 5,000 Alabamians are left without a critically important health care provider. This is a major issue for every community in our state, but rural Alabama is hit the hardest. In many cases, that local pharmacy is the only healthcare provider in that rural community,” Alabama State Rep. Phillip Rigsby, a pharmacist, wrote in an op/ed published in AL.com.
“In other businesses, if an operating cost increases, the company’s prices increase to compensate. In pharmacy, that just is not possible. A pharmacy cannot pass on that cost to a patient because the contract doesn’t allow for that.”
