Independent Pharmacies Closing as PBMs Continue Anti-Consumer Practices   

By Consumers for Quality Care, on February 21, 2024

Independent pharmacies in rural communities around the country are closing, due to the monopolistic practices of pharmacy benefit managers, also known as PBMs. This wave of closures has hurt small cities and rural areas in both Kansas and Kentucky, according to​ reports by​ NPR Kansas and WKYT. 

​​​There are 16 percent fewer independent pharmacies in rural areas than there were just 20 years ago. ​As a result, ​pharmacy deserts​ are proliferating nationwide,​ ​forcing​​ ​consumers ​to​​ ​drive ​more than​ 15 minutes to the closest drugstore.  

Kansas has been hit especially hard, with nearly 12 percent of independent pharmacies in the state closing between 2010 and 2019, reducing access to pharmacies.  

PBMs are squeezing these independent pharmacies from both sides. Some independent owners noted that they get charged high and unpredictable fees by PBMs. Others called reimbursements “very unfair” and “insufficient.” 

The Lexington Herald-Leader has found that nearly 70 independent pharmacies in Kentucky are closing. Dr. ​Ben ​Mudd​, the Executive Director of Kentucky Pharmacist Association,​ highlighted PBMs’ growing and devastating effects on independent pharmacies, stating, “The PBM or the middleman continues to pay pharmacies less than they paid for the drug…now it’s just becoming so rampant that there’s so many underwater claims or pharmacies losing money.”  

​​Dr. Clarence Sullivan​,​ a 27-year independent pharmacy owner,​ was forced to pay $142,000 in fees to PBMs last year. Sullivan calls the PBM industry a “broken corrupt system” that requires lawmakers to rein in their heavy-handed practices.  

If left unchecked, PBMs will continue to engage in anticompetitive business practices, forcing independent pharmacies to shut their doors and limiting how consumers access their medications. CQC urges lawmakers and regulators to continue scrutinizing PBMs’ activities.