Buffalo, N.Y. (WBEN) - Local pharmacists are fighting the monopolization of the pharmaceutical industry, which has led to a number of local pharmacies across the nation to close over the years.
A number of local pharmacists gathered Friday outside one of the lone remaining Rite Aids open in Western New York, on Niagara Street in the City of Buffalo, to go after Pharmacy Benefit Managers (PBMs) that are setting unfair prescription reimbursement rates.
"They take 60% of the pharmaceutical dollar. 60% of the pharmaceutical dollar goes to the middleman, who provides no value," said Stephen Giroux, president and CEO of seven independent pharmacies in Western New York. "They process claims, they process rebates from the pharmaceutical manufacturers. They provide no value, and yet they're unregulated and very opaque."
Giroux says these PBMs oftentimes pay pharmacies below the cost of ingredient, particularly on expensive drugs. When it comes to some medications to help residents, PBMs will often pay pharmacies below their cost. So if the pharmacy is being charged $1,000 a month for medications, PBMs are likely reimbursing the pharmacies $900 or less.
"It's ridiculous. No business can sustain on a margin like that, and then no professional dispensing fee on top of that. So it's really, really challenging, and that's why we've lost so many pharmacies, and that's why Rite Aid has been in bankruptcy now a couple of times, and are closing every pharmacy in New York State," Giroux added.
Don Arthur from Brighton-Eggert Pharmacy says pharmacies like Rite Aid, which closed nearly 70 stores across Western New York earlier this week, have done everything they can to keep their lights on, but when they're being reimbursed for brand name pharmaceuticals below their cost, it's impossible to stay in business.
"Prior to Rite Aid closing over 1,200 stores, we were losing upwards of nine pharmacies throughout the country per-day since January of 2024," said Arthur on Friday. "These Pharmacy Benefit Managers that we've been talking about the last several years, one of the biggest offenders is Express Scripts. Some of you may not even know who they are, but you do know who Highmark Blue Cross is, you do know who Univera is. They choose to do business with these middlemen, and the rebates that these middlemen are extracting from brand name manufacturers; the brand name manufacturers, they're not going to lose. They're going to continue to advertise on TV, they're going to continue to raise their prices to make up for the rebates. Those that are being harmed the most are the purchasers of insurance, whether it's a commercial plan, your employer, the state government, the county government with Medicaid, the federal government, and, of course, the providers like pharmacies, who aren't being reimbursed even their cost for these drugs."
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One source of help for these local pharmacies comes from a bill currently going through the State Legislature in Albany that will help regulate PBMs to fairly reimburse these pharmacies, and provide their communities with the medications people need.
"We're here today to really call on the State Legislature, which has four more days of session, to pass the PAPPA bill - Patient Access to Pharmacy Protection Act in Albany. It's a bipartisan piece of legislation," Giroux said. "We're hoping that it gets through either today or the next four days next week that they're going to be in session, and it would go a long way to help improve the circumstance for community pharmacies."
Giroux adds that some lawmakers in Albany are trying to get the PAPPA bill across the finish line by bringing the bill to the floor for a vote before the end of legislative session next week.
"They had to exempt unions from the legislation, while union health and welfare benefit funds are being ripped off by these same PBMs. Why the leadership of the unions aren't recognizing that, I don't understand. But we need to get with them and help them to understand how they're being unfairly penalized, and really kind of taxed, if you will, by these PBMs and their unscrupulous practices," Giroux added.
Brad Arthur, Don's brother from Black Rock Pharmacy, says the legislative fixes as part of the PAPPA bill need to come quick in order for local pharmacies to properly serve the community, while also being treated fairly by PBMs.
"We have been treated unfairly for so long, and you might ask, 'Why are the independents here different from this business behind us?' We have been extremely adept at evolving," said Arthur. "The independents vaccinated more people during the COVID epidemic than any of our chain competitors. We are providing other types of clinical pharmacy services to meet the needs of our communities when the big chains are not able to pivot and do those types of things. So the independents have been extremely adaptable, and we remain adaptable, remain committed to these communities, but we need those folks in charge to be able to recognize how important it is to have a vibrant, functioning, competitive marketplace."