PBM Industry’s Anti-Competitive Practices Hurting Independent Pharmacies in Oregon
By Consumers for Quality Care, on June 20, 2024
Independent and family-owned pharmacies across Oregon are struggling to stay in business due to monopolistic practices of pharmacy benefit managers (PBMs), according to OregonLive.
Brooklyn Pharmacy, owned by Pat Hubbell in southeast Portland, is one of the few remaining independent pharmacies in Oregon. As a pharmacist, Hubbell provides a vital service to the community and to the thousands of patients who depend on his store to get their medications. “I still believe independent pharmacies are a critical part of a community and that there’s still that one-on-one connection needed in a community to provide essential pharmaceutical care,” said Hubbell. But now, he believes “the powers on top of us” are making it increasingly difficult to survive.
His concerns are proving to be accurate, as Oregon has the second fewest retail pharmacies per 100,000 consumers, according to data from the National Council for Prescription Drug Programs. Furthermore, nearly two-thirds of counties in the state have fewer than two pharmacies per 10,000 residents. More than 70 percent of retail pharmacies are owned by big-box retail chains, making it even more difficult for independent pharmacies to survive.
Community pharmacists like Hubbell believe the main culprit for their hardships are PBMs. Independent pharmacies sign a contract with a PBM that then acts as the middleman between health plans and drug manufacturers. The PBM is responsible for negotiating prices with the manufacturers and setting reimbursement rates for the pharmacy. The three largest PBMs – Optum, Express Scripts, and CVS Caremark – have incredible, almost monopolistic market power, controlling roughly 80 percent of the prescription drug market. This leaves independent pharmacies with little leverage to negotiate fair contracts with PBMs. They say that PBMs are abusing this leverage, using it to charge them high fees while also forcing them to accept low rates for reimbursement. These practices, according to independent pharmacy owners, are effectively running them out of business, and there’s nothing that they can do to stop it.
Melissa Netland co-owns an independent pharmacy with her husband. Increasingly, they find themselves caught between a rock and a hard place: either they accept PBM contracts that they believe are unfair or they give up on their business altogether. “They control everything. They are the strong giants,” she said, speaking of PBMs, “They’re literally squeezing us out of business.”
If left unchecked, PBMs will continue to engage in anticompetitive business practices, forcing independent pharmacies to shut their doors and limiting consumers’ access to medications. CQC urges lawmakers and regulators to continue to scrutinize PBM activities and take action to ensure access to affordable care for all consumers.
