PBMs are making it nearly impossible to navigate the waters of healthcare, writes Kreckle.
After a long winter in Central Pennsylvania, spring and early summer have arrived in full bloom and my thoughts turn to one of Denise and my favorite activities, canoeing the beautiful waters of our area. Even my e-mail address confirms my passions. Pharmcanoe@aol.com has been my e-mail since I first signed on back in the 1990s. Some things never change: my home address, my spouse and my e-mail address! Like those constants, my employment situation is consistent too. I’ve worked for independent pharmacists for my entire career, less six months.
Let’s be realistic, independent pharmacists are tough competition. They provide amazing services, outstanding patient care, and can navigate the troubled waters as nimble as a canoe. The big three chains, however, are aircraft carriers. These chains are massive and hulking, slow to move, but stable in the troubled waters. Like an aircraft carrier they have a lot of stuff going on, and many parts that need resources for the entire ship to function. Like an aircraft carrier, chains require lots of overhead and lots of management, which requires a lot of resources. These chains are so top-heavy in management they need to be equally cautious about the contracts they sign because of the sheer amount of profit needed to pay executives, district managers, and pharmacists to work in less-than-optimal conditions.
When patients come to a local independent, they often pick up their prescription within 15 minutes. Most chains today are pushing patients to return the next day. Most independents have same day and often free delivery service. They-like our canoeists-can adapt quickly to market conditions, and take care of the patients. Chains can’t possibly compete with these services and personalized touch. Preferred networks are the tool most often used to drive out the competition or to swamp the canoe. They can’t possibly compete based on service and patient care, so the best they can do is keeping people out of the competition with preferred networks.
One of the big chains is down 20% year-to-date after the recently announced Q2/2019 results. They’re starting to feel on a more massive level the pain that the independents feel every day. Their aircraft carrier is taking on water.
Another major chain had stock trading nearly $50.00 per share in the late 1990s. When the stock plummeted to $10.00 a share, I was in! I bought 100 shares of this chain’s stock for $10.00 a share. Today a share of that stock is worth 54 cents! When aircraft carriers take on water and start to sink, it takes a massive effort to pump out the water and get the ship on course. This chain has been pumping water for more than 22 years, and their stock is still sinking. When the canoe takes on water, you bail the water out, get back in and start paddling.
Whether we are in a nimble canoe, or on a massive aircraft carrier, keeping our watercraft afloat seems to be the focus today. Not a lot of pharmacies, whether independent or chain are focused on moving through the water, as much as on staying afloat. Pharmacy benefit managers with their absurd payment formulas and preferred networks are the gale force winds that are making it nearly impossible to navigate the waters of healthcare. Both chains and independents can sink given the magnitude of the storm.
Read More: The Redefinition of Pharmacy Jobs
Whether pharmacies are owned by a massive chain or are a single store entity, a pharmacist is the one whose livelihood is impacted. We as brothers and sisters of pharmacy need to unite and look out for each other. If the PBMs are not soon brought under control, we will all be donning our life jackets, and hoping that the sharks aren’t too bloodthirsty.