Imagine owning a business where your competition can access your customer files.

Your competition dictates which products you can sell, and how much you are permitted to charge.

What if your competition were allowed to come to you a year after a sale and force you to return money that you charged a customer because they didn't like the amount you charged?

Most would agree these are insane propositions.  Yet locally-owned independent pharmacies are faced with this every day.

It's a big reason why most are no longer in business.

The problems began years ago with the advent of the Pharmacy Benefit Managers.  The original concept was simple enough.

Companies and government agencies hire these PBMs to act as a go-between to administer pharmacy benefits and negotiate fair prices for prescriptions.

The PBMs decide how much insurance companies must pay and how much pharmacies are allowed to collect.

They also negotiate deals with drug manufacturers.

Things changed dramatically when the PBMs entered the pharmacy business.

Bloomberg via Getty Images
Bloomberg via Getty Images
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PBMs make more money when patients use the PBM-owned mail-order pharmacy.

CVS Caremark, Express Scripts, and OptumRx are three of the biggest PBMs in the country.  They control an astounding 80% of all pharmacy transactions.

Family pharmacies are in a no-win position.  They must enter into horrible contracts with the PBMs and agree to PBM terms.

Bloomberg via Getty Images
Bloomberg via Getty Images
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If they don't sign the contracts, they can no longer serve patients, whose employers use PBMs.

However, the terms of the contracts are unreasonable.  Many times, pharmacies are forced to fill prescriptions at a loss.

These deals impact patients as well.  Many times, PBMs overrule a doctor's wishes and force patients to use more expensive medication.

This is because of the deals the PBMs have with drug manufacturers.  The PBMs receive rebates from the PBMs to direct customers to their medication.

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The result of many of these deals is known as spread pricing.

This is when the PBMs charge their clients a higher price than they are spending on reimbursement.  The PBMs pocket the difference.

To make matters worse, many of the contracts owners of independent pharmacies sign include language that forbids them from speaking publicly about their relationship.

The Benefit of Using Family Pharmacies

🔴  Mail-order pharmacies cannot guarantee the medicines they send out are kept in proper condition.  Once the post office has your drugs, heat, cold, and other variables are left to chance.

🔴  Mail-order pharmacies cannot offer personalized service.  If you have a question, who do you call?  Don't you want to talk to someone you know and trust?  Especially, when it comes to your health.

🔴  Locally-owned pharmacies offer better customer service.  Most of these pharmacies have an owner who works in the store.  They have more at stake than chain store employees.

🔴  Your local family pharmacy will work harder to overcome insurance issues that tend to pop up.  That's not typical of the chain stores.

🔴  If you don't have insurance, you will typically save money by using an independent pharmacy.  Unlike employees of a chain, owners of family pharmacies will usually work with you to get your meds filled.

🔴  Waiting times are typically shorter at family-owned pharmacies, and most offer free, same-day delivery.

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