HUNTSVILLE, Ala. — Across the state, more than 300 locally-owned pharmacies have closed over the past six years, according to data from the Alabama Pharmacy Association.
Trent McLemore, pharmacy director for the locally-owned Star Discount Pharmacy chain, believes that if something isn't done on the federal level, many more small pharmacy operations could close for good.
"I think right when I started working in pharmacy was about the time that one of the major chains bought a PBM, and then it's been downhill for pharmacies ever since," said McLemore.
PBM stands for "Pharmacy Benefit Management," and essentially are middlemen that sit between drug manufacturers and pharmacies. They are also, McLemore says, the reason many smaller pharmacies are closing.
"Traditionally, they're supposed to keep costs low and negotiate drug prices down," McLemore explained. "They literally determine how much the drug costs for us and how much we're going to make off of that medication when we dispense a prescription."
McLemore said the effects began to be felt around a decade ago, when "Direct and Indirect Remuneration Fees," or DRIs, began changing how pharmacies made profits.
"All of a sudden, I guess because they existed, PBMs realized that there was an untapped source of revenue there," he said. "So they started from a couple of cents per claim to being as much as 30% of what they paid upfront. It looks like you're making good money and a month or two later, they're taking money back for a claim that they already paid you for."
The procedure can also put a hole in the wallet of you, the consumer.
"We're the ones having to stand across the counter and tell these patients, 'I'm sorry, your drug is going to cost $500 this month,' and we may still lose money on that drug, but we're having to pass that cost onto the patient."
In order for the model to change, McLemore said, lawmakers will need to step in.
"There's federal legislation which will help regulate like TRICARE and Medicare plans. Anything that is federally regulated and funded has to happen in Congress, in D.C.," said McLemore.
There are some congressional and state legislative efforts to help save pharmacies. Dale Strong and Robert Aderholt have now cosponsored the Pharmacists Fight Back Bill.