Chairman | Publisher
AS 2023 COMES TO A CLOSE, MY TAKE IS THAT it was a productive year for community pharmacies in their fight to bring down the PBMs (pharmacy benefit managers) a peg or two.
The PBMs have considerable leverage with the manufacturers to have their drugs on the formularies and the rebates that result for their clients. But the PBM clients may not be getting all the rebate dollars they are entitled to. From what I have read, PBMs have devious way of skimming off rebates for themselves. And I also learned that it is not beyond the PBMs to work a deal to get a slice of the downstream prescription revenue. Is that ethical? I don’t think so.
There is little doubt that the PBMs have quite a grip on the money flowing from prescription drugs. Are consumers on the winning side? No. And pharmacies certainly are not on the winning side either. What really bothers me is the way the PBMs continue to claw back revenue from the pharmacies. This is an egregious example of how PBMs are lining their pockets at the expense of pharmacies. Moreover, pharmacies have no idea what their reimbursement is going to be until well after the prescriptions have been adjudicated. This is scheduled to change to real-time reporting come January 2024, but it will not surprise me to see PBMs say they need more time to implement a real-time system.
PBMs got their start by harnessing the purchasing power of many employers and insurers to negotiate lower prescription prices. Since then, the PBMs have been able to use this power to enrich their own coffers.
However, there has been progress made against “steering,” low reimbursement, and other issues with the PBMs. But Congress and the Federal Trade Commission have not been a help here. They have been paying a lot of lip service to the PBM issue, with nothing coming from this to rein in PBMs. The states therefore are taking the initiative. And now there is a class action suit initiated by a community pharmacy against CVS Health, CVS Caremark, and Aetna.
That said, I see progress in community pharmacy’s favor, but there is still a long way to go to neutralize the PBMs.
What’s also worth noting about 2023 is that Walgreens and CVS are seeing a decline in profits from the prescriptions dispensed. This has resulted in shorter hours that the pharmacies are open, store closures, and layoffs of pharmacy staff to reduce costs.
And Rite Aid declaring bankruptcy this year is resulting in the closing of quite a few Rite Aid pharmacies. This is an opportunity for community pharmacies to scoop up this business.
On the technology side, the FDA’s one-year extension for enforcement of the DSCSA
(Drug Supply Chain Security Act) has given pharmacies breathing room. I doubt there will be another extension, so pharmacies should give this a priority and decide on the solution they want to use well before the November compliance date next year.
In summary, 2023 was an interesting year. CT