Independent pharmacies are closing, leaving many in “pharmacy deserts”; 2020 Ky. the law isolates them from predatory competition

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“Corner pharmacies, once widespread in large cities and rural villages, are disappearing from many areas of the country, leaving an estimated 41 million Americans in what are known as pharmacy deserts, without easy access to pharmacies,” Markian Hawryluk relationships for The Washington Post.
“In analyses from GoodRx, an online drug price comparison tool, found that 12% of Americans have to drive more than 15 minutes to get to the nearest pharmacy or don’t have enough nearby pharmacies to meet demand. This includes the majority of people in over 40% of counties. “

Independent pharmacies are struggling to compete with chains whose relationships with pharmaceutical insurers and benefit managers give them a competitive edge. “Insurers have also reduced how much they will pay for prescription drugs, reducing margins to levels that pharmacists call unsustainable,” Hawryluk reports. “While insurers’ drug plans directed patients to affiliated pharmacies, independent stores watched their customers walk away. They found themselves at the mercy of pharmaceutical intermediaries, who recover pharmacy revenue through retroactive fees and aggressive audits, leaving local pharmacists uncertain whether they will end the year in black “.

In 2020, Kentucky lawmakers passed Senate Bill 50, sponsored by Senator Max Wise, R-Campbellsville, to address some of these problems, which Kentucky pharmacists have long said were so serious that some of the state’s pharmacies shut down.
The law requires the state to hire a single pharmacy benefits manager to manage Kentucky Medicaid’s $ 1.7 billion-a-year prescription drug business, which covers about one-third of the state’s population. It also established a single preferred drug list, or form, for all state Medicaid-managed health care organizations and put the state Department of Medicaid Services responsible for the reimbursement procedures, including delivery costs.
Additionally, the law requires the PBM to pay the managed care company the actual discounted pharmacy price negotiated with the pharmacy network and prohibits spread pricing, where a PBM maintains the difference between what it bills Medicaid for drugs and what to whom the pharmacy pays to dispense the drug. It also bans an entire list of tariffs and bans PBMS from taking retaliatory action against pharmacies, among other things.

A state of 2019 analyses called “Opening the Black Box” found that PBMs made $ 123 million through spread pricing.

Such pressures have reduced the number of independent pharmacies. “From 2003 to 2018, 1,231 of the nation’s 7,624 independent rural pharmacies closed, according to the University of Iowa‘S Rural Policy Research Institute, leaving 630 communities with no independent pharmacies or retail chains, ”Hawryluk reports.

Click here for the interactive map showing the percentage of the county population who live more than 15 minutes from the three closest pharmacies.

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