PBMs Forcing Kansas City Area Independent Pharmacies to Close
By Consumers for Quality Care, on November 27, 2024
Around Kansas City, Kansas and across the country, independent pharmacies are shutting their doors due to the anticompetitive practices exerted by the pharmacy benefit manager (PBM) industry, according to KCUR.
When Kansas City’s Duschesne Clinic closed this summer, it upended how more than 1,000 patients receive their prescription drugs. Nationwide, since 2019, more than 7,000 pharmacies have closed, creating pharmacy deserts and forcing consumers to travel longer distances to obtain their medications.
Health care mergers initiated by insurance behemoths have caused consolidation in the PBM industry. The three largest PBMs are owned by some of the largest health care corporations – CVS Health, Cigna, and UnitedHealth Group – which collectively control 80 percent of the prescription drug market. Because of their size and influence, they exert extraordinary power over the price of medications, ultimately raising the costs of prescription drugs for consumers while pocketing a handsome share for themselves.
This market power leaves independent pharmacies with little leverage to negotiate fair contracts with PBMs. On the other hand, PBMs to abuse their leverage, charging independent pharmacies high fees while also forcing them to accept low reimbursement rates. With their margins increasingly squeezed, independent pharmacies struggle to keep their doors open.
Health Reporter Reed Abelson of The New York Times says that the PBM industry prospers because its role in the health care system is hard for consumers and policymakers to understand. “These companies thrive in the lack of transparency and the fact that the system is so convoluted that it’s very difficult to tell why you’re paying, what you’re paying, even how much you’re paying compared to other people; how much the pharmacy benefit manager is pocketing,” Abelson said.
If left unchecked, PBMs will continue their anticompetitive practices, forcing independent pharmacies to shut their doors, limiting consumers’ access to medications. CQC urges lawmakers and regulators to continue scrutinizing PBMs and to take action to ensure access to affordable care for all consumers.
