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Independent local pharmacies at risk as reimbursement environment prompting closures

Updated: Jul 9


Editor’s note: This is the second story of a multi-part series on challenges rural

pharmacies are facing.


Brandi Chane had spent maybe 20 minutes sharing more than a century of

history on the Weatherford Square when a visitor asked how her Davis City

Pharmacy is doing with prescription reimbursements.


She laughed, but not in the funny-haha way.


“So now we get to the meat of the problem,” she said. “Let me show you

something.”


Out came her laptop, an interactive map of Texas on the screen. As Chane

clicked a forward arrow, the state filled with dots as a 10-year span of pharmacy

closures littered the map.


The 28 months from January 2022 to May 1 alone have witnessed the 537 Texas

pharmacies. Of those, 403 were mom and pop shops not affiliated with a chain.


“We all have a story to tell,” Chane said. “But the worst part of this story is our

time is severely limited if things don’t change.”


The lion’s share of prescription drugs distributed through health insurance

policies are priced for the druggists by one of three entities called Pharmacy

Benefit Managers.


“They control 80 to 95 percent of the market when it comes to prescription

benefits,” she said.


As an example, Chane named three popular branded drugs, the Trelegy inhaler

and blood-thinners Eliquis andXarelto.


“If I buy one of those for $500, the PBMs reimburse less money than it costs me

to purchase the medications,” she said. “This isn’t once in a while, it’s every

single day. ... To be in the (provider) network, we’ve got to OK these costs. There

is no negotiating, it is what’s called a take-it-or-leave-it cost.”


The three Pharmacy Benefit Managers are CVS Caremark, Express Scripts and

Optum Rx, she said. The trio of PBMs are respectively owned by Aetna Health

Insurance, Evernorth Health Services and United Health Care.


“Now, they are the middle man where they have absolute control over what

medications a patient can get, how much those medications cost and — even

worse — they also own their own mail-order pharmacies,” Chane said. “So those

PBMs are technically our competitors who are determining what we get paid.”


The dilemma is not exclusive to Davis City Pharmacy and its sister community of

independent drug stores. But chains have more structure to backstop them.


“What I face is what every single other independent pharmacy owner faces,”

Chane said. “And it’s that we are being systematically destroyed by Pharmacy

Benefit Managers.”


In Brock, pharmacy technician Temple Baldridge masked her feelings with a

smile, too, when asked about reimbursements to Clearfork Pharmacy.


“Terrible, terrible. It’s hard to keep the doors open and take care of the

customers,” she said, her husband and store pharmacist, Steve, nodding beside

the backside drive-through window.


“It’s harder when all these new medicines come out and then the doctors

prescribe that,” she continued. “Most of the time, it’s not covered by insurance

without the prior authorization from the doctor.


“Even then, it’s super expensive for the patient or we don’t get reimbursed.”


The fifth-year store owners are well-versed in the PBM problem.


“If you tell a customer you can’t get it because it costs too much, and the

insurance finds out that’s what you’ve been telling your customers, they’ll drop

you,” she said. “So we just eat it most of the time.”


Her husband credited PBMs for that loss, but he added that’s just the way it is.


“The PBM is sort of the middle man,” he said. “You’re obligated to fill the

prescription. We sign a contract with the insurance companies, and the contract

does contain our rates. But even those rates aren’t necessarily set in stone.”


And by that, he doesn’t mean sometimes they get better. The pharmacist then

described DIRs, which is Medicare Part D shorthand for Direct and Indirect

Remunerations.


“If the insurance company decides my reimbursement is more than they

decided, now, that they wanted to (reimburse), if they wanted to they can collect

the fees back,” he said. “Which is more and more common now. It’s very unfair,

but it’s the system we operate in in order to provide medication to patients —

you’re stuck. And you hope you can make enough money to stay open.”


Pharmacist Cathy Bohannon, at Diamond Pharmacy in the Mineral Wells

Brookshire’s, says pharmacies are in a Catch-22 with insurers.


“Because you either sign the contract or ... they won’t put you in their network,”

she said. “Pharmacy Benefit Managers, yes, they are just horrible. They are the

ones that decide what our reimbursements are.”


She doesn’t ask customers to complain about that, though.


“If you call your insurer and say, ‘How come you’re not paying my pharmacy?’

they will drop (me),” she said, but laughed and reflected on the shifting waters

pharmacies navigate. “We’re not millionaires by any means, but we just do the

our best to stay afloat.”


Reporter: Glenn Evans gevans@weatherforddemocrat.com


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