Marsha Blackburn Questions Witness on PBM Impact on Independent Pharmacies

Impact of PBMs on Independent Pharmacies

• 🏥 Senator Marsha Blackburn highlights the closure of 120 independent pharmacies in Tennessee since 2010, noting that these pharmacies are often the sole healthcare access point in communities.
• 🗣️ Pharmacists report being treated horribly by PBMs, leading to significant financial strain.
• 📉 The PBM industry's $7.3 billion in profits contrasts sharply with the declining profits and zero-profit margins experienced by independent pharmacies between 2017 and 2022.
• ⚠️ The closure of community pharmacies, whether in urban or rural areas, is permanent, with towns unable to attract new ones due to the unsustainable business model.

PBM Practices and Financial Squeeze

• 💰 Independent pharmacies are losing money on both the drugs themselves and the services they provide to ensure patient therapeutic outcomes.
• 📈 A report from Tennessee's Department of Commerce and Insurance revealed a PBM profited over $30 million through spread pricing by forcing independent pharmacies to pay higher rates for over 550 drugs.
• ⏳ The same PBM failed to reimburse 265 pharmacy claims within the legally set 7-day business day period, impacting 40 separate pharmacies.
• 🚫 The lack of transparency in PBM practices is described as insulting to patients, pharmacists, and independent pharmacies.

Counterarguments and Administrative Fees

• 📊 A University of Chicago report suggests unaffiliated pharmacies are not paid less than affiliated ones, a claim disputed by the witness regarding Tennessee.
• 🤝 Practices like affiliation are common across various healthcare entities, including hospitals and Amazon, to provide care efficiency.
• 📈 There's support for paying pharmacists for additional patient services, but this is contrasted with a significant hike in administrative fees by PBMs.
• 💸 Administrative fees for services like prescriber education and data analytics have doubled, increasing by 51% from $3.8 billion to $5.7 billion in two years.