Pharmacy benefit managers ‘use practices that create access barriers for patients and administrative challenges for pharmacists’
New Jersey is home to nearly 850 independent community pharmacies, which together employ over 10,000 professionals. Some 88.9% of the U.S. population lives within five miles of a community pharmacy, making local pharmacy professionals a critical source of information about patients’ health care. But these vital community institutions are becoming less and less common — in 2023, there were over 300 net closures of independent pharmacies across the country. At the same time, patients in the Garden State continue to face barriers to the medications they need to manage complex and chronic conditions.
In 2022, 57% of New Jerseyans reported struggling to access and afford their prescription medicines. Across the health care system, middlemen known as pharmacy benefit managers (PBMs) impact everyone from patients to pharmacists. Often left unchecked, PBMs use practices that create access barriers for patients and administrative challenges for pharmacists. PBM practices don’t only threaten the ability of patients to access and afford their treatments, but also negatively impact the ability of local independent pharmacies to provide essential health care treatments, resources and information to their communities.
Recognizing this, New Jersey leaders have been at the forefront of efforts to rein in PBM practices. In 2023, Gov. Phil Murphy signed legislation to promote transparency throughout the pharmaceutical supply chain and establish greater oversight of the business practices of PBMs. Justin Zimmerman, acting commissioner of the New Jersey Department of Banking and Insurance, underscored the need for this reform, noting that the legislation will enable more meaningful steps toward reducing patient costs.
Operating with little to no transparency, PBMs negotiate drug rebates and discounts with biopharmaceutical manufacturers that boost their own profits while creating barriers for patients. The three largest PBMs in the nation are owned by for-profit health insurers and together control 80% of the prescription drug market, enabling them to exert significant influence over how both pharmacies and patients access and pay for prescription medications.
Addressing the opaque practices of PBMs is essential to helping more patients access the treatments they need — in New Jersey and beyond our state lines.
PBMs make decisions on prescription drug formularies — the list of drugs an insurer covers — that often steer patients toward drugs with higher out-of-pocket costs. Additionally, PBM contracts can incentivize use of their own vertically integrated pharmacies, which enables companies to profit further through other entities within the health care supply chain that they own and supply. These practices financially penalize and restrict independent and community pharmacies from providing care for their local customers.
Pharmacy owners are faced with difficult financial decisions that may require them to either merge with larger pharmacy chains or shut down. Alarmingly, nearly 1 in 3 independent pharmacy owners may be forced to close their doors this year — in part due to the practices of PBMs. New Jersey patients already face additional barriers to access care due to an ongoing shortage of primary care facilities, which would only be compounded by a lack of access to trusted community pharmacists.
Across our state, there are countless stories of how the hundreds of independent community pharmacies meet the needs of our neighbors every day. Pharmacists deliver essential vaccinations to young and old, help patients adhere to medications for their chronic conditions, and answer patient questions about their health. Without care nearby, patients may be forced to travel longer distances and pay higher costs to seek care or even forgo treatments and care due to access barriers.
New Jersey’s more than 800 community pharmacies play an essential role in helping patients access affordable treatments. To ensure pharmacists can continue to provide trusted insights and information to their communities, policymakers must advance policies that protect independent and local pharmacies from onerous PBM practices and support patients in accessing treatment.
Gov. Murphy and our Legislature took a critical first step in 2023, and New Jersey should continue to lead by example to put patients and the pharmacists they rely on first.
Authors: BRIAN OLIVEIRA, DEBBIE HART
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