Why More Local Pharmacies Are Struggling To Stay In Business

Frederica Freyberg:
On health care, we continue our coverage of prescription drug prices, which continue to climb for patients and pharmacies, while coverage of them continues to plummet. In “Rx Uncovered,” “Here & Now” producer Marisa Wojcik examines the complex systems driving these trends. This week, we look at the impact on pharmacies, both big and especially small, and why their disappearance is hurting patients.

Nicole Schreiner:
We have been in business for over 70 years.

Marisa Wojcik:
The local drugstore was once upon a time a staple in communities across the country.

Nicole Schreiner:
We look at our financials every month and it’s scary, and we think about how, how long can we last?

Marisa Wojcik:
Today, whether it’s the local drugstore or a chain pharmacy, the brick-and-mortar presence is dying.

Nicole Schreiner:
The feasibility of having an independent pharmacy is becoming very challenging.

Marisa Wojcik:
Nicole Schreiner is the new CEO of Streu’s Pharmacy in Green Bay and president-elect on the board of the Pharmacy Society of Wisconsin.

Nicole Schreiner:
We get up in the morning because we want to truly help serve our patients.

Marisa Wojcik:
Alongside her commitment to the mission, she takes on her new dual roles in one of the most challenging times for pharmacies. From 2010 to 2021, 30% of drugstores in the U.S. closed. Last year alone, 2300 pharmacies closed, half of them being independent or mid-sized businesses.

Nicole Schreiner:
It’s creating an access issue for patients. We oftentimes talk about in rural areas, you know, patients having to travel, you know, perhaps 20 miles to find a pharmacy that would be able to provide their medications. And — but we’re having that even in urban city areas.

Marisa Wojcik:
For some, a visit to the pharmacy is a quick stop, picking up one or two prescriptions. But for many patients, it’s much more than that.

Mary Felzkowski:
Your pharmacist, a lot of times, will be a critical component of your medical care team.

Marisa Wojcik:
Senate President Mary Felzkowski authored legislation trying to help local pharmacies keep their doors open.

Mary Felzkowski:
We saw our small, independent pharmacies starting to go out of business in rural Wisconsin.

Marisa Wojcik:
When it may take months for a patient to get a clinic visit. Pharmacists say they bridge that gap, available for anyone to walk in and ask questions at any time and prevention leads to healthcare savings.

Nicole Schreiner:
For patients with asthma, we did a study with the Pharmacy Society of Wisconsin and showed that when they sat down with a pharmacist on two 30-minute interventions, that they reduced the number of ER visits, the number of hospitalizations. These things are making a difference in overall reducing health care dollars spent.

Marisa Wojcik:
Like with most retail stores, it’d be reasonable to assume that internet sales are putting pharmacies out of business. And while mail order and online retailer giants like Amazon do compete with onsite service, advocates diagnose a much deeper and chronic issue.

Mary Felzkowski:
PBMs – pharmacy benefit managers – have been around for a very long time.

Marisa Wojcik:
Pharmacy benefit managers or PBMs act as middlemen between drug manufacturers, wholesalers, providers, insurance companies and pharmacies.

Mary Felzkowski:
And they’ve monopolized and they’ve gotten in between prescribers and the delivery of drugs, driving up the cost of drugs instead of lowering them.

Marisa Wojcik:
The three largest PBM companies accounted for 80% of prescription claims last year.

Ben Pearlman:
They’ll claim that they negotiate with drug manufacturers and pharmacies to reduce overall prescription drug costs. However, despite these claims, PBMs regularly inflate what patients pay and force pharmacies to operate at a loss.

Nicole Schreiner:
It’s become very powerful, and independent pharmacies like myself have no negotiating power anymore with these PBMs.

Bob Jaskolski:
The impact of PBMs, that PBMs are having on rural pharmacies, is staggering.

Marisa Wojcik:
The legislation takes aim at a number of their practices, including not allowing patients to fill prescriptions at certain pharmacies.

Bob Jaskolski:
PBMs dictate where prescriptions can be filled…

Marisa Wojcik:
Punitive audits against pharmacists who inform patients of lower cost options.

Bob Jaskolski:
…what to charge a patient…

Marisa Wojcik:
And perhaps the biggest of all for pharmacies…

Bob Jaskolski:
…what they will reimburse a pharmacy…

Marisa Wojcik:
reimbursing the price of medications below cost

Bob Jaskolski:
…and when they’ll pay the pharmacy.

Marisa Wojcik:
forcing them to take losses. At a Senate health committee hearing, numerous local pharmacies attested to this issue.

Nic Smith:
My pharmacy is currently operating in the red right now, solely due to PBM reimbursement rate.

Larry Crowley:
Margins estimated to PBMs have increased by 46%, and during the same time, margins to pharmacies have decreased by 47%.

Nicole Schreiner:
The contracts have become basically take it or leave it. They’ve continued to erode year after year after year, and it’s estimated that independent pharmacies, depending on your particular location in the country, can have anywhere from 20 to 40% of their claims are actually reimbursed below cost.

Marisa Wojcik:
But not all health industry experts agree.

Abbey Rude:
We believe all these provisions will be associated with increased costs to health plans and sponsors.

Marisa Wojcik:
Those in opposition to the bill, such as health insurers, say it will increase prices for health plans, employers and patients. The exorbitant cost of drugs, they say, begins with the drug manufacturers.

Patrick Lobejko:
Instead of taking away the few tools that health plans and employers use to address ever increasing drug prices, the legislature should focus on fixing the market distortion caused by drug manufacturer pricing schemes.

Mary Felzkowski:
We’re going to work very hard on showing them through data from other states that have allowed that, that have the same legislation, where it’s actually lowered the cost of health care.

Marisa Wojcik:
Whatever the cause, the impact on the patient is real, like the ability to obtain diabetes medications.

Nicole Schreiner:
GLP-1s those — some pharmacies are just choosing not to carry them because they get reimbursed below their cost.

Marisa Wojcik:
Or having your insurance accepted.

Nicole Schreiner:
Some pharmacies are choosing not to carry particular plans because of the poor reimbursement.

Larry Crowley:
Every day in my pharmacy, I witness patients facing exorbitant co-pays, sometimes exceeding $500 for medications they cannot afford. These patients are confused. They’re overwhelmed, and they’re forced into impossible decisions about their health.

Marisa Wojcik:
For a patient having to fill prescriptions at multiple pharmacies, the consequences can cost them their lives.

Josie French:
Recently, when interviewing a patient, we learned that they had a duplicate prescription that was at another pharmacy from a different doctor. If they had gone home and taken both, they would have needed emergency care and it could have been fatal.

Marisa Wojcik:
From the extremes of the pandemic to the work they do every day, independent pharmacists say their commitment is to their community.

Nic Smith:
What happens if PBMs continue to drive us out of business? Who will step up during this crisis? Who’s going to be doing seven day a week testing? Who’s going to deliver meds late at night for a hospice patient? Who’s going to get a call at 2 a.m.? I just got that last week. It won’t be a mail order pharmacy in another state that’s doing that.

Nicole Schreiner:
Being able to provide that service to patients and to be part of making sure that they are taken care of, is really what we want to ultimately do.

Marisa Wojcik:
Reporting from Green Bay, I’m Marisa Wojcik for “Here & Now.”