Panel: Independent Pharmacies Need Changes to PBM Relationship

Change is needed to create a better working relationship between pharmacy benefit managers (PBMs) and independent pharmacies, according to a panel of experts at the American Pharmacy Purchasing Alliance (APPA) conference in Orlando, FL. The 5 professionals appeared to share a common sentiment that current PBM practices are hurting the business of independent pharmacy, as well as the patients they serve.

Independent pharmacy owner James Wright, PharmD and former president of the Florida Pharmacy Association (FPA) president, discussed some of the issues his business experiences. To start, he said PBMs are often run by large companies that are in competition to independent pharmacies. The system creates an environment in which it is very difficult for an independent pharmacy to survive.

“Your competition controls how much you’re reimbursed, they control audits, they control providers, whether or not you can accept insurance,” Wright said. “The challenges are very significant. They (the PBMs) can completely wipe you out.”

In some incidences, where he was reimbursed for less than what he paid for the medication, his business lost money in the transaction. The complaint is common among independent pharmacists.

Wright said his solutions include cutting costs, trying to be more efficient, and selling more medications for cash, rather than utilizing insurance plans. “That’s pretty solid. With cash, there’s less uncertainty,” he said.

Panelist Allen David Knee, RPh, said PBMs impact patient decisions with insurance plans that restrict where customers can receive lower rates. “PBMs try to limit their networks,” Knee said.

According to panelist Tom Coumo, RPh and former FPA president, politics plays a large role in how PBMs do business. He indicated that pharmacists need to pay lobbyists to make their voices heard in Congress. “No one takes pharmacy seriously,” he said.

Panelist Jeff Davis, a health care attorney and lobbyist, said there are indeed questions being raised in Washington regarding PBMs. Pharmacy rebates is an area of concern. “There are rebates that are paid between manufacturers and PBMs, but very little transparency,” he said. “Is the patient even benefiting from that rebate? We’re seeing these issues being raised on a federal level.”

Transparency is key, said both Davis and Daniel Sternthal, a panelist and attorney.

Sternthal said integration between providers and payers is often unclear. For example, a clinic may be owned by a parent company that also has a PBM venture. He said independent pharmacies simply don’t have the ‘numbers’ that larger companies have established. In that respect, he encouraged independent pharmacists to band together through professional organizations, such as APPA.

The panelists said major changes are needed overall in the way PBMs do business with independent pharmacies, and that they do appear to be on the horizon. “Until a year ago, you were not allowed to tell a patient that cash was cheaper,” said Coumo.

Davis said pharmacists need to continuing making their voices heard, and to address the issues with politicians. “If policy makers aren’t hearing about it, they can’t take action,” he said.

Panelists also said pharmacists should be working with other health care professionals that deal with insurance policies and have similar payment issues. “I believe the next generation of pharmacists will be in the doctor’s office,” said Coumo.