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PBM AntiTrust Observations

Nov 22, 2023

As incoming President of the New Jersey Pharmacists Association. I view this period in our profession’s history as critically important. We’ve reached an inflection point and if we are to advance the profession of pharmacy, we must rise to meet this moment with bold ideas and actions.

I have watched recent events unfold with a clear recollection of the pre-PBM era (the late 70s to early 80s,) the PBM arrival in the 80s, the PBM-Pharma "alliance" that began with Merck-Medco, and the growing PBM dominance of the last two decades. This has given me a unique perspective on the genesis of today's crisis as well as the simplest (but admittedly most politically difficult) solution.

The focus in regard to recent chain closures and walkouts should be on the fact that chains have become victims of the very reimbursement and economic models imposed by their complicit PBM partners. When a pharmacy is only being paid a $1.50 dispensing fee, the only way to survive is to fill as many scripts as possible for as little cost as possible. That may have been a viable alternative when the pharmacy department could serve as a loss leader (or break-even) for a lucrative front end. Now, however, competition in the OTC grocer market has gutted the pharmacy’s bottom line.

So, welcome to the “club,” chain pharmacies! Fortunately, most independents who have managed to survive have pivoted away from the old model that was decimated by the PBM/Chain alliance. With their partner PBMs under scrutiny and poised to take big regulatory hits, one can expect to see contraction even in the chain market. While they certainly deserve these consequences, this is an important inflection point because even the chains, with all their buying power and resources, cannot remain financially solvent within the current reimbursement structure. This is no longer a matter of "free market" forces – this is about the predatory, monopolistic policies of the PBMs and their deleterious impact on a patient's access to pharmaceutical care.

How do we fix it? The solution is simply a matter of "resetting the clock" back to a time when PBMs were fulfilling their sole intended role as an insurance processor.

We can solve 90% of the affordability problem, as well as countless other issues, with one very simple action – a federal law that prohibits PBMs from owning, or being financially affiliated in any way with, any entity that has a role in dispensing medication. The conflict of interest in the current dynamic is undeniable, and all published data proves it. Patients, pharmacists, and prescribers are all damaged by this practice. Most states prohibit prescribers from owning pharmacies because of potential conflicts of interest. PBM ownership of, or interest in, their own pharmacies is exponentially more egregious. Most of the problems in our healthcare system can be solved by this simple, yet bold action of PBM regulation. There is no way to “reform” the current model. PBMs should not be permitted to have any relationship with any dispensing entity. Period

We need to pivot away from the idea of PBM reformation because there is no such thing. Instead, all efforts should be focused on highlighting the anti-trust nature of what has evolved as a result of the PBM-Pharmacy cartel. Insurers should be nothing more than administrators of insurance. Pharmacies should be pharmacies. Nowhere in the insurance sector does the insurance company own the entities to which it writes the checks. This is the definition of blatant self-dealing. What we did not realize when Merck-Medco "crossed the Rubicon" was the downstream result of allowing this dynamic. With retail pharmacies beginning to collapse at an alarming rate, while shares of PBM stocks soar to record highs, it is time to bring this failed model to an end.

PBMs must be decoupled from the pharmacy distribution chain. This simple action is bold (and some might argue impossible) but it is an action we must take. For me, impossible is not a possibility, and I encourage everyone in our profession to be vocal in support of this cause.

Antonio V. Minniti, RPh FACA
President, New Jersey Pharmacists Association
Bell Rexall Pharmacy, RPIC
1201 Haddon Avenue
Camden NJ 08103

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