Pharmacy Benefit Managers Aren’t Always Good for Pharmacies

You’ve probably heard of food deserts by now, but what about pharmacy deserts? While there are big differences between the two, there are also some pragmatic ways in which they can affect the health of populations on a large scale. If you don’t have nutritious food nearby, your health is likely to suffer; the same is true for easily accessible pharmaceuticals. And it sure sounds like the problem of pharmacy deserts is becoming more pronounced in the United States.

That’s one of the big takeaways from a New York Times investigation by Reed Abelson and Rebecca Robbins. Abelson and Robbins found numerous instances where pharmacy benefit managers created a business environment inhospitable to many local independently-owned pharmacies. The reporters discovered numerous cases where a local pharmacy cited the actions of pharmacy benefit managers as the reason for their business’s closure. This then creates, as Abelson and Robbins wrote, “so-called pharmacy deserts that make it harder for residents to get prescriptions and medical advice.”

Many pharmacy benefit managers also operate pharmacies of their own; CVS Caremark is one prominent example. And while industry representatives told the Times that their objective is to save customers and clients money, the Times found evidence where pharmacy benefit managers paid their corporate siblings more for certain drugs than they had independently-owned pharmacies.

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The role of pharmacy benefit managers has become a political issue. Last year, Senator Bernie Sanders introduced the Pharmacy Benefit Manager Reform Act, which featured a number of bipartisan sponsors. Earlier this year, Federal Trade Commission Chair Lina M. Khan issued a statement about the FTC’s findings about these companies.

“Pharmacists from West Virginia to Texas have written to the FTC, expressing concern that PBMs’ business practices are creating risk for their patients while squeezing independent pharmacies that have served their communities for decades,” Khan wrote. Matt Stoller, who has written extensively about monopolies, phrased it more bluntly, writing that “just three PBMs are now in control of pricing of pharmaceuticals, and are redirecting vast amounts of money to themselves.” It feels like a situation where something needs to change; the only question is what that will be.