I didn’t become a pharmacist to fight corporate middlemen. I became a pharmacist to care for my community.
For 45 years, my family has proudly operated a local, independent pharmacy. Over the decades, we have had the privilege of growing with our patients, serving multiple generations of families. We know our patients by name, we have watched their children grow, and we have shared times of joy and times of challenge.
Our pharmacy is located in the heart of the Central Valley, where much of the country’s table grapes and tree nuts are produced. Though our town has grown through the years, we still lack many of the health-care resources of larger cities.
So, our pharmacy has had to respond to many of these community needs. We have worked with local providers, hospitals, clinics and the school district to break down health-care barriers and improve patient access to care. During the pandemic, we created mobile vaccination clinics. As drug prices increased, we also created a nonprofit foundation to help patients access life-saving medications that they could not afford.
But today, our pharmacy is under serious threat. Not because of changes in the health-care system. It is because of powerful, unregulated middlemen known as Pharmacy Benefit Managers, or PBMs. PBMs are powerful intermediaries that determine which medications a patient receives, what price they pay, and where they can get them.
PBMs were originally created to control prescription drug costs and provide medication access through a pharmacy network. But over time, they have evolved into opaque, profit-driven gatekeepers. A recent Federal Trade Commission report found that the “Big 3” PBMs used their market power to drive $7.3 billion in profits from specialty medications for cancer, heart disease and other serious conditions — with markups reaching more than 2,000%.
The FTC report also found that PBMs use “spread pricing” to charge higher prices to clients, while reducing payments to network pharmacies. While PBMs, like all for-profit companies, should be allowed profit, the report shows how a severe lack of oversight has allowed them to abuse this privilege. While the Big 3 PBMs have shown impressive profits year-over-year, the pharmacies within their networks are closing at alarming rates.
We’re seeing the writing on the wall, and it’s been a struggle to keep the doors open. Every day, I see reimbursements from PBMs that do not cover the cost of the medication. We can’t make it much longer. Already, I have been forced to refrain from stocking certain medications because we’d lose hundreds of dollars per prescription. This is not only a difficult decision to make on behalf of the patients I serve, but it also negatively impacts our business over time.
While we’re struggling to survive, PBMs are sending letters to our patients urging them to transfer their medications to a PBM-owned pharmacy. Sometimes, the PBM only allows our pharmacy to fill a 30-day supply of medication before requiring that all remaining fills be sent to the PBM’s mail order pharmacy.
This comes at a real cost to independent pharmacies, but, most importantly, the patients we serve. Seniors are forced to wait days or weeks for life-saving medications, parents are suddenly told that their child’s medicine is no longer covered — with no explanation — and pharmacies like mine close due to unaffordable reimbursements, endless audits and unreasonable fees put in place by PBMs.
Over the last several years I’ve watched too many colleagues close their pharmacies in California — PBM practices are almost always cited as the reason. In rural areas of the state, closures force patients to travel long distances for essential medications, a burden many simply cannot afford. Though PBMs offer mail order, many patients in low-income areas do not have reliable security for mailed medications. In addition, refrigerated medications (such as insulin) cannot survive in the mail during hot summers.
The problem continues to grow — even urban communities are seeing pharmacies closing, leaving residents without access for miles.
Californians are suffering because state leaders have failed to enact meaningful PBM reform. Our state regulates every other part of our health-care system — physicians, pharmacists, nurses, hospitals and insurers to name a few. Yet, PBMs remain the only unlicensed entities with control over patient care. This must change.
Governor Newsom recently announced his intent to prioritize PBM oversight through his revised budget. While this is a good first step, this action in isolation is insufficient. Senate Bill 41 by San Francisco’s own Sen. Scott Wiener would immediately ban some of the most abusive PBM practices. It also lays the groundwork for a meaningful licensure program with enforcement and accountability.
Pharmacists and patients throughout the state are teetering on a knife’s edge. The recent announcement that Rite Aid is closing hundreds of locations in California underscores how fragile our pharmacy infrastructure has become. Without reform, more closures will follow, and Californians throughout the state will suffer the consequences.
More than 20 other states have already enacted PBM reform. Although California is late to the game, Governor Newsom’s support for SB41 would signal to the nation that we are serious about salvaging our disappearing pharmacy networks and holding PBMs accountable for their role in driving up the cost of medications. California can lead the nation once more if given the chance.
Kevin Komoto, PharmD, is a licensed pharmacist, the president of the California Pharmacists Association and the owner of Komoto Pharmacy in Delano.
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