Log in Subscribe

Pharmacists Concerned About Reimbursements


A recent development in the pharmacy industry has local pharmacists very concerned, both for their own livelihood and their ability to serve the patients they have come to know and care for.

A change in the way reimbursements are paid from insurance companies to the pharmacies has left them losing money on many of the prescriptions they fill every day.

“We’re not just talking about a decrease in profits. We’re talking about losses,” Best Drug Stone co-owner Kevin Caldwell said.

“It’s a serious, serious issue just for the future of pharmacy in general,” Mitchell’s Main Street Pharmacy owner Eddie Jack Mitchell.

The problem lies with the pharmacy benefits manager (PBM), a company serving as a “middleman” processing prescription claims between pharmacists and insurance companies. The insurance company is billed a certain amount for each prescription, and the PBM collects that money and keeps a portion of it before reimbursing pharmacists what’s left.

Recently, PBMs such as CVS/Caremark have been keeping larger and larger portions of the payout, resulting in pharmacies actually losing money on many prescriptions.

So far he is not turning anyone away, but Mitchell said no pharmacy can afford to lose money on prescriptions for long. Caldwell agreed.

“If you’re going to operate at a loss, you might as well close the doors and go fishing,” Caldwell said.

“It is all so very frustrating when all community pharmacists want to do is help their patients and then the PBMs treat us this way,” Best Drug Stone co-owner Jennifer Fowlkes added.

The situation had been troubling pharmacists for a few months but escalated rapidly at the first of this year.

Pharmacists suspect CVS/Caremark, a company that owns both a retail pharmacy chain and a pharmacy benefits manager, is trying to squeeze out independent pharmacists and control a greater share of the market through its own outlets.

“What they’re doing, ultimately, they’re trying to put us out of business,” Mitchell said.

“We love taking care of the people of Stone County and work very hard to provide excellent service to our customers. We don’t want that privilege and access to be taken away from citizens of this community because a greedy multi-billion dollar pharmacy benefit manager is trying to pad their own pockets!”

Mitchell said he used to make roughly $10 per prescription on average and is now averaging a loss of $4.

“I had an example. The insurance said it paid $197. I got paid $30 of it,” he said.

When the flu season hit this year and Tamiflu prescriptions took off, Caldwell said insurance companies were paying $132.61 for each prescription. PBMs were keeping $96, and pharmacies were losing $55 per prescription.

This was changed after pharmacists complained, but they are still making only barely above cost on Tamiflu, Caldwell said.

There is a law, Act 769 of 2009, that is supposed to prohibit PBMs from reimbursing pharmacies below cost, but pharmacists say it’s not being enforced. And, in some cases, “above cost” means 5 cents above, and “cost” does not include the bottles, labels, and other materials needed to dispense the product.

Caldwell said this has always been an occasional problem. They might fill one prescription a day that they lost money on. Then it became two a day, then 10. Now it’s around 20.

Most Arkansans with private insurance have either Blue Cross Blue Shield or Ambetter. Caldwell said Blue Cross was doing a little better on prescription reimbursements until recently, but it is now a problem with both companies.

Medicaid and Medicare are currently not affected, which is keeping things afloat for now. However, Caldwell fears the same thing may happen with them soon.

He just hopes the PBMs have finally gone too far and state lawmakers will be forced to address the problem.

If the pharmacy business becomes monopolized by a large chain or mail order, it will decrease access to healthcare for many patients, he said. Caldwell believes companies prey on pharmacists because they are kind-hearted and are often willing to sacrifice in order to serve their patients.

In many cases pharmacists are easier to reach face-to-face than doctors and may be the first point of contact for healthcare. Pharmacists often triage patients and offer over-the-counter treatments or recommend a visit to the doctor or the ER.

“Pharmacists are accessible,” he said. “There may come a time that we’re not.”

Mitchell also feels that mail order would be less convenient for many of his customers.

“We have customers that walk to our pharmacy because it’s conveniently located and we want to be able to continue taking care of the people we know and love. As a community pharmacist in my hometown, I strive to better our access to healthcare by offering delivery and many after hour services, but pharmacies can only afford to continue these types of services if they are paid fairly.”

Mitchell recommends that people call their state legislators.

“They need to be hearing from people, people’s real stories about how they went to the pharmacy and they couldn’t get their medicine,” Mitchell said.

He expressed appreciation to Sen. Missy Irvin and Rep. Michelle Gray, who he said are very engaged with the issue.

“We are hoping for a positive solution. These are state tax dollars that Caremark is robbing from all of us, and we hope for more transparency and accountability from them.”

Caldwell also suggested that patients contact state lawmakers, as well as complaining to their insurance companies.

“The best thing we can do right now is try to convince the Arkansas Attorney General to uphold the law,” he said.

There is currently a lawsuit in federal court filed by PBMs against the state of Arkansas. Caldwell’s biggest hope is that it will be resolved in a way that benefits the pharmacists, but it is a tough fight. PBMs make billions of dollars in profits and spend huge sums on lobbying, while the Arkansas Pharmacy Association has a budget of maybe $200,000 to respond with, he said.

“It’s David and Goliath is what it is. The best we can hope for is that common sense prevails.”


Story by Edie Sutterfield from the Jan. 31, 2018 issue.


No comments on this item Please log in to comment by clicking here