By CSS
American businessman Victor Kiam best described the small business owners’ mindset by declaring, “An entrepreneur assumes the risk and is dedicated and committed to the success of whatever he or she undertakes.” However, external forces can occasionally constrain even the most astute entrepreneur, as is the case with independent community pharmacy owners. These same forces needlessly inflate prescription drug costs for employers and health plan sponsors, while undermining patient choice and health outcomes.
Pharmacy benefit managers (PBMs) are hired by employers, government agencies, health insurance plans and unions to administer prescription drug plans. They morphed over time from simple claim adjudicators to gigantic drug middlemen operating a byzantine drug delivery system that benefits them at the expense of others. They reap windfall profits simply for processing claims and operating mail order pharmacies. In 2009, the three largest PBMs – CVS Caremark (which includes the CVS pharmacy retail chain), Medco Health Solutions, and Express Scripts – made $6.4 billion, $1.1 billion and $776 million respectively in profits. By contrast, independent pharmacies operate off of slim profit margins that are driven by prescription drug reimbursement. Despite the rising cost of many medicines, these rates have been declining for years.
Local pharmacists have a Hobson’s choice: accept onerous, non-negotiable contract terms dictated by PBMs or lose access to both new and long-term patients. When the contracts are signed community pharmacies are dragged into a profit-draining, bureaucratic abyss. If they have the temerity to complain, PBMs can often freely void the contract. U.S. Representatives Anthony Weiner (D-NY) and Jerry Moran (R-KS) introduced H.R. 5234, the PBM Audit Reform and Transparency Act of 2010; a bipartisan-supported bill designed to tackle some of the most egregious practices of the PBM industry. Its passage is a must.



