New regulations could benefit local pharmacies
‘ It’s been a tough, tough time’
Mark and Cissy Clark of Clark’s Family Pharmacy in Earle had a customer recently come in needing to get some prescriptions filled.
The woman had two children sick with the flu and she herself was also sick with flu.
When they ran the children’s prescriptions through the insurance company everything went through fine. But when they submitted the mother’s prescription they were only paid $36 for the drug, which was $55 below their actual cost for the prescription medicine. Thinking it was a mistake, they called the pharmacy benefit manager which handles the claims for the insurance company and were essentially told ‘ too bad.’ They had a contract and had to fill the prescription at that price.
When they called the insurance company, they were told by the insurance company that they had paid the pharmacy benefit manager (PBM) $132 for the drug.
Clark said low reimbursement rates by PBMs for prescription drug costs to pharmacies in Arkansas – and all across the country – are hurting their ability to serve their communities and in many cases are forcing small and independent pharmacies out of business because they are losing money and can’t afford the loss.
“It’s been a tough, tough time for pharmacies,” Mark Clark said. “These pharmacy benefit managers are paying pharmacies below their cost and reimbursing themselves more. “
As it stands now, there is no law or agency regulating PBMs. Insurance carriers hire PBMs to negotiate lower drug costs with the drug makers and handle payments to pharmacies.
The PBMs charge a fee to handle each transaction, but in some cases the PBMs actually own their own pharmacies and are paying higher reimbursement rates to their pharmacies than they are to the small, independent pharmacies.
The Arkansas Pharmacists Association complained to the state in January about the low reimbursement rates, specifically by CVS Caremark, which is the PMB used by the state’s largest insurer Arkansas Blue Cross and Blue Shield. Most of the state’s 285,000 residents who get their healthcare coverage through Arkansas Works, the state’s subsidized Medicaid insurance plan, are covered by Blue Cross and Blue Shield.
They claim PBMs are trying to put small pharmacies out of business with these unfair pricing practices.
And that’s not good for a rural state like Arkansas where local pharmacies often serve as the only health care provider in the community.
“They have no regulations,” Clark said. “Nobody is watching them. They bill insurance companies huge amounts then give the bulk of the money to their own pharmacies and give independent pharmacies only as much as they can get by on. It’s an effort to drive the independents out of business.
The end game is to get everybody to use their pharmacies and to deny the independent pharmacies.
But what it’s really doing is denying access to health care not only in Earle, but in small cities all across the country. If I have a contract. And you have a contract, we should be getting the same amount. But that’s not what’s happening.”
Cissy Clark said of the 270 most commonly used generic drugs, PBMs are paying their own pharmacies $60 more per prescription than they are paying other pharmacies.
“In January and February I’d say we were paid below our cost for the medication for 21 percent of our prescriptions,” Cissy said.
“And we did that because we need to take care of our people. But it can’t go on.
It will come to a point where we will have to tell a patient we can fill these drugs, but can’t fill others.
So they will have to get those filled somewhere else because it will take me all day to make up for that loss. That’s heartbreaking when you’ve been taking care of people for 21 years.”
The Clarks said without a change in the law more and more small pharmacies will go out of business Arkansas could become the first state in the country to regulate PBMs.
Governor Asa Hutchinson called a special session of the legislature this week to address a number of issues, including pharmacy reim- bursement legislation.
A legislative committee on Tuesday overwhelmingly approved a bill that would allow the Arkansas Department of Insurance to regulate pharmacy benefit managers, requiring them to obtain licenses to do business in the state.
“If the bill passes, they will be put under the insurance commission where they will be made to follow laws,” Mark Clark said. “If you’re a minister, if you’re a plumber, if you’re a barber, if you’re a pharmacist, you have to be licensed.
You have boards and people that see to it that you act in a certain way. These pharmacy benefit managers have flown under the radar. They have nobody who tells them what’s right and wrong. They do what they want to do.”
Mark said they have had a really good show of support from the legislature.
All of Crittenden County’s representatives – Deborah Ferguson, Milton Nicks, and Sen. Keith Ingram support the change in the law.
Earle City Council also passed a resolution backing the legislation.
“It’s not just an Arkansas problem,” Clark said. “It’s a national problem. We want to take care of our people. That’s every small town pharmacy in America.
It’s been increasingly difficult. The end of last year was the first time we realized what was going on.”
[ Editor’s Note: Arkansas Governor Asa Hutchinson did, indeed, sign the Pharmacy Manager bill into law late last week. Licensing of PBMs will begin Sept. 1]
By Mark Randall