Marsha K. Millonig
Marsha K. Millonig B.Pharm., M.B.A.

EARLIER THIS YEAR, THE Centers for Medicare & Medicaid Services (CMS) Office of the Actuary’s estimated that national health expenditures may reach $6 trillion in the next eight years, which would equate to health expenses reaching 19.4 percent of gross domestic product (GDP). The move of baby boomers into Medicare and an increase in medical goods and services prices are key factors in the estimate. Of significant concern to me is that medication-related problems, including nonadherence to medication regimens and nonoptimized medication therapy, may be as much as $672 billion.

Pharmacists have an important role to play in addressing medication use by providing comprehensive medication management services. Yet, increasingly, policies employed by the nation’s pharmacy benefit managers (PBMs) are negatively impacting pharmacies around the country, and a new study has shown that patients’ adherence to their medications decreases when pharmacies close.

In the study, published April 5 in the Journal of the American Medical Association, the authors conclude that pharmacy closures led to a significant drop in adherence to essential cardiovascular medications among older Americans that persisted for a full year of follow-up. How significant? Rates of nonadherence were nearly 6% for patients taking statins and over 5% for those taking beta blockers and anticoagulants, among patients at all pharmacies. The decline in adherence was even more pronounced for patients using independent pharmacies, nearly 8%.

The retrospective cohort study included 3.1 million men and women age 50 and older who were prescribed statins, beta blockers, or oral anticoagulants. Researchers found no differences in monthly adherence between the cohorts until pharmacy closures impacted 3% of the study population.

In the majority of cases, medication adherence declines reflected a complete discontinuation of medicine rather than worsening or partial adherence. The authors note, “Declines in adherence were most pronounced among older adults using independent pharmacies, purchasing from a single store to fill all their prescriptions, or living in low-access neighborhoods with fewer pharmacies and were consistent across several classes of cardiovascular medications.”They conclude that“Efforts aimed at reducing barriers to prescription medication adherence should consider the role of pharmacy closures, especially in patients at highest risk.”


Doug Hoey, CEO of the National Community Pharmacists Association (NCPA), noted in a recent newsletter that the impact of this finding is “a big deal.” He notes that the CDC Foundation says cardiovascular disease is the number-one cause of death in the United States and results in healthcare costs of $1 billion each day. “That makes the results of the new study a very big deal,” says Hoey. “Nonadherence to cardiovascular medications leads to more people dying and higher costs. In the JAMA study, 46.7% of the patients were covered by either Medicare (43.4%) or Medicaid, so declines in adherence not only have an impact on those patients’ health, but a detrimental impact on taxpayer dollars used to subsidize those programs as well.”

As many of us in the profession are aware, PBM policies regarding preferred pharmacy networks; inappropriate use of quality measures and performance metrics in direct and indirect remuneration fees (DIRs) under the Medicare Part D plan; gag clauses keeping patients from paying the lowest cost for their medication and other pricing tactics; and steering beneficiaries to mail order, specialty, and other pharmacies in which they have an ownership interest are having a huge negative impact on patients, pharmacies, and the government.

Let’s go back to Doug Hoey’s recent remarks, where he notes, “Medication affordability is often the first place people go to try to solve nonadherence.” But in the JAMA study 59% of the co-pay amounts were under $5, and 75% were under $10. Doug says that the study cited value-based insurance plan designs with low patient cost sharing increasing adherence by 5% to 6% and preferred networks increasing adherence by 1% to 2%. “Both of these tactics have been manipulated by PBMs to steer patients into their own retail and mail-order pharmacies and to pay pharmacies significantly below their cost to dispense the drug.” He points to resulting pharmacy closures: “3,622 between 2011 and 2016. Many assume those closures were limited to independent pharmacies, and 42% of them were; however, big-box and grocery store drug stores were also affected. In the last 12 to 18 months, Walgreens closed 750 of the Rite Aid stores it purchased. Fred’s will close 159 stores by next month. Shopko auctioned its 146 pharmacies. Kmarts continue to close. Regional chains in Missouri and Ohio were sold to CVS, which then closed most of those locations. Those are just some of the notable recent market exits.”

The negative practices that are contributing to these closures are being addressed around the country by state legislators based on growing media reports of inappropriate spread pricing and other tactics. Prescription drug benefit manager reform is spreading across states and is also being addressed as part of the Trump administration’s 2018 blueprint for lowering drug pricing.

And these efforts cannot come soon enough. Pharmacies have seen the retroactive DIR fees climb through the roof, and correcting these ills is part of the National Association of Chain Drug Stores’ (NACDS) campaign for change highlighted at its annual meeting in April. Mark Panzer, NACDS chairman and Albertsons senior vice president of pharmacy, health, and wellness, and NACDS president and CEO Steve Anderson said that achieving results on relief from DIR fees; fair pharmacy reimbursement; opioid abuse prevention; and enhancing pharmacies’ scope of business are the four most crucial issues that are part of that campaign.

NCPA and NACDS have both worked tirelessly to educate the administration, and those efforts continue in spite of recent disappointments in the lack of DIR reform. Recent exposés on PBM behavior have made reform reach the tipping point, with Ohio firing its PBM in the last year and West Virginia carving out and managing its own drug benefit with millions in savings. The JAMA researchers discuss several suggestions to address the decline in adherence related to pharmacy closures, including:

  • Policies that ensure sufficient pharmacy reimbursement for prescription medications.
  • CMS mandating minimum standards for pharmacy reimbursements.
  • Conversion by health plans to an open pharmacy network.

Most in the pharmacy community would welcome such policies. In my home state of Minnesota, this study helped add more fuel to the fire that caught on in our legislature this past year and resulted in the passage of comprehensive PBM reform, including licensure and regulation. Providing proof of the impact of these negative policies often produces jaw-dropping exclamations from policymakers, who simply cannot believe these types of business practices continue at the expense of patients, pharmacies, and payers, including in every state.

While the dust settles on many state legislative sessions, I look forward to reviewing forthcoming analyses of how much progress was made to address this nontransparent and murky part of the healthcare arena. CT

Marsha K. Millonig, B.Pharm., M.B.A., is president and CEO of Catalyst Enterprises, LLC, and an associate fellow at the University of Minnesota College of Pharmacy Center for Leading Healthcare Change. The author can be reached at