Reporter: Savannah Tryens-Fernandes
Since 2018, about 350 pharmacies in Alabama closed their doors. That’s more than one a week.
Now a coalition of independent pharmacies based mostly in northern Alabama are taking on the companies they say are to blame.
Star Discount Pharmacies in Huntsville, C&H Pharmacy in Fort Payne, Hunnington Pharmacy in Huntsville, Propst Discount Drugs in Huntsville and Reeves Drug Store in Pulaski, Tennessee filed a federal lawsuit in November. They argue that the companies that control prescription drug plans are fixing prices to increase their profits while paying independent pharmacies less.
“Things have changed and trended in such a negative direction over the last eight years that it’s just become untenable,” said Trent McLemore, director of pharmacy at Star in Huntsville. “If I’m doing things the right way and I’m a good business person, I should be able to make a living doing that. But that’s not even an option anymore.”
The lawsuit focuses on a specific setup involving GoodRx, a telemedicine company that lets you track prescription costs and provides discounts on drugs.
The company, in partnership with Pharmacy Benefit Managers, or PBMs, have allegedly engaged in “a conspiracy to fix prices paid to pharmacies,” according to the lawsuit.
But pharmacists say the suit only addresses one part of a much larger, more confusing problem.
“The whole system is convoluted and confusing… and I’m sure there’s a lot of intentionality to that — you keep it confusing so no one can really understand what you’re doing or try to challenge it,” said McLemore.
‘Pretty Big Money’
McLemore’s father was an independent pharmacist in Moulton, a small town in north Alabama, when he was growing up. Back then, the more scripts you filled, the more money you made.
“You didn’t look at reimbursement rates. You just knew you got paid more than it cost you. Sometimes you got paid a lot more, sometimes you got paid a little bit more, but you always made money,” he said.
But in recent years, McLemore says pharmacists are “filling more scripts than ever and there’s no money in their bank account.”
That’s because of Pharmacy Benefit Managers, or PBMs, according to the lawsuit. Bobby Giles, the government affairs director for the Alabama Pharmacy Association, has other names for them, including: “Pretty Big Money.”
PBMs are essentially middlemen that manage prescription benefits between insurance companies and employers, said Giles. They decide which drugs are covered, how much a patient’s copay is, where you can get your prescription filled and how much pharmacies are paid for medications and clinical services, according to the Alabama Pharmacy Association.
“They determine every aspect of how a prescription is filled for patients,” said Giles.
The three largest PBMs are Fortune 50 companies that process over 80% of the prescriptions filled in the U.S. each year — CVS Caremark, Optum owned by United Healthcare and Express Scripts owned by Cigna, according to the lawsuit. Their profits rank them alongside — and sometimes above — companies like Microsoft and Exxon Mobil, according to the Fortune 500 list.
According to the complaint, PBMs “operate in a highly concentrated market” and have “integrated themselves” in every step of the drug distribution process — they are subsidiaries of healthcare conglomerates and own mail-order pharmacies and retail pharmacies.
“The resulting behemoths have vast market power over prescription drug access and pricing in the United States,” the lawsuit says... CONTINUE READING
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