Rx for Failure Part 2 - Sen. Manar 'Open Up' state contracts

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DECATUR, Ill. (WAND) – Pharmacy owner Owen Sullivan worries about his business.  “Twenty-six years I’ve built that pharmacy and they want to come in and steal it and they want to use state tax dollars to do it.”

Sullivan, who owns Sullivan Drugs in Carlinville, made his comments during an Illinois House hearing on a bill which would require the state to increase payments to pharmacies under the states new managed care program which started on April 1.  Sullivan is not the only pharmacist with concerns related to the states managed care program and the growing influence of Pharmacy Benefit Managers, PBMs.

“I honestly, even with a paid off business, because I’m going to be paid off in four-or-five months, I don’t think I can keep my doors open because I am going to be in the negative so much I can’t keep up with how much I am losing,” Sullivan told I-TEAM reporter Doug Wolfe. 

PBMs set the price pharmacies are being paid to fill prescriptions including taxpayer funded Medicaid prescriptions.  They are considered the middleman between insurance companies and the pharmacy.  Numerous pharmacists we have talked with, and others who post on the internet, say PBMs are forcing them to sell prescriptions below the cost of dispensing them or at an unsustainable level.  By contract, pharmacists are frequently forced to sell prescriptions at a loss. 

“The independent pharmacies are losing money, the taxpayers are paying more money, and somebody in the middle is making a lot of money,” said Dale Colee who runs 3 Decatur area drug stores including Dale’s Southlake Pharmacy.

“We have no control over what we are reimbursed,” stated David Falk, owner of 17 pharmacies including Sav-Mor in Mt. Zion.  It’s a take it or leave it contract.  Sign it or do without the business.”

One of the largest PBMs doing business in Illinois is CVS/Caremark.  Their pricing of prescription drugs, and reimbursement to Illinois pharmacies, is now the target of state lawmakers who fear pharmacies in their districts will close their doors.

Among those lawmakers is State Senator Andy Manar, (D) Bunker Hill.  Manar is looking at legislation which could curtail the power of PBMs, including CVS/Caremark, in setting prices especially in the managed care program. 

“Open up those contracts so that we can see the details of how I believe these contracts are being manipulated by CVS to stamp out competition which also raises the cost for taxpayers and doesn’t improve healthcare delivery in Illinois today,” Manar told WAND.

CVS/Caremark, in a written response to WAND, stated independent pharmacies have been profitable over the past 5 years with revenue increasing by 35% and overall profit increasing 22% to 24% over the past decade.  CVS/Caremark also says it would not try to drive out competition because it needs to have a successful independent pharmacy network.

Lauren Young, of Dale’s Southlake Pharmacy, points to the growing number of pharmacies being squeezed out of business in Illinois.

“Since July of 2017 we know of at least 18 pharmacies in the state of Illinois that have had to either sell out to CVS, or a different retailer, or just shutdown altogether,” Young said.

   

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