When a pharmacy closes, patients have to find somewhere else to get their prescriptions.
And that can be a bigger problem than it sounds.
National data suggests more than 525,000 people in Maryland live in a pharmacy shortage area and may have to travel 10 to 15 miles to get their prescriptions. Some patients are even crossing state lines to get their medicines.
For some, finding another pharmacy may be a simple fix.
For others, it can mean finding a pharmacy that accepts their insurance and establishing care somewhere new — and often farther away.
That’s what happened to customers of a pharmacy in Western Maryland.
Pharmacist and pharmacy owner Ken Reed closed his only Maryland store in Hancock in June, when he could no longer afford to keep it open.
“Patients have no clue that by accepting you as a patient, we’re having a net loss of thousands of dollars,” he said.
Reed says the problem is pharmacies are being shortchanged on reimbursements for prescriptions they fill by pharmacy benefit managers, also known as PBMs.
PBMs manage prescription drug benefits for health plans and help determine how much pharmacies are reimbursed for the medications they dispense.
Reed and other pharmacists, who spoke with Spotlight on Maryland, want Maryland to establish a minimum reimbursement rate in state law.
In simple terms: a guarantee that a pharmacy gets at least enough to cover the cost of the drug plus a fee for dispensing it.
But that could affect consumers, too.
Heather Cascone, a lobbyist for the Pharmaceutical Care Management Association, which represents PBMs, says if pharmacies are paid more, someone else has to cover the difference.
“When we talk about compensating pharmacies at a higher rate, employers and unions are the ones that have to make up that difference,” Cascone said. “Ultimately, patients in that instance are not benefiting.”
She says that could show up through higher insurance premiums or higher costs at the pharmacy counter.
“We really just need to keep in the crosshairs of our conversations who benefits and who ends up paying the bill,” she said.
A challenge to Cascone’s argument
There is a real-world example that complicates the argument that higher reimbursements would necessarily mean higher costs for consumers.
In 2022, West Virginia became the first state to require PBMs to reimburse pharmacies at the National Average Drug Acquisition Cost, NADAC, plus a $10.49 dispensing fee.
NADAC is a federal benchmark that estimates what retail pharmacies pay, on average, to buy prescription drugs from wholesalers.
The West Virginia Office of the Insurance Commissioner recently reviewed three years of data and found the combined impact of the reforms to be an actuarial wash. The changes blunted premium increases rather than driving them higher.
Reed says that law is why he can keep the doors open at his two West Virginia stores, unlike in Maryland.
“If you come in with a commercial plan, you’ll pay what we pay for the drug plus $10.49. That’s it. That’s what you pay,” he said.
Maryland has tried to address reimbursement before
A 2019 state law would have required PBMs working with managed care organizations in Maryland’s Medicaid program to reimburse pharmacies at least the NADAC.
More attempts have followed since then, including in 2024.
Cross-filed bills, Senate Bill 1021 and House Bill 880, would have required certain pharmacy reimbursements to be at least NADAC plus Maryland’s Medicaid professional dispensing fee. Neither bill advanced out of committee.
PCMA says NADAC has an important caveat.
A spokeswoman told Spotlight on Maryland that it “can be a useful reference point, but it should not be treated as the actual acquisition cost of an individual pharmacy” because NADAC is based on a voluntary survey of pharmacy invoice data.
Other states, including Arkansas, Kentucky and New York, have also adopted or pursued reimbursement policies tied to drug acquisition costs.
PCMA pushes back
Cascone argues there is “a long history of making claims that independent pharmacies receive low, somewhat discriminatory reimbursement prices.”
She points to audits in states including Ohio, Arkansas and Florida comparing reimbursement rates for independent pharmacies with PBM-owned pharmacies.
“These audits consistently have found that independent pharmacies receive higher or similar prices to those of PBM-owned pharmacies,” Cascone notes.
Maryland law prohibits a PBM from reimbursing a pharmacy an amount less than it reimburses itself or an affiliate for the same product or service.
But pharmacists argue those protections don’t guarantee that reimbursement will cover the cost of acquiring and dispensing a prescription.
Consequences for patients
Back in Hancock, Reed’s pharmacy is already gone.
The town of roughly 1,500 residents is left with one other pharmacy — or the option of crossing the state line into West Virginia for medication.
Aliyah Nuri Horton, executive director of the Maryland Pharmacists Association, says pharmacy closures can be especially difficult when transportation is limited.
“If we look at Edmondson Village in Baltimore, the last pharmacy closed, I believe it was a Giant pharmacy, and the [other] closest pharmacy was I think 2 miles away. But based on where it’s located, the transportation to get to that pharmacy is going to be difficult.”
Cascone said all pharmacies are under pressure, including chain drugstores and supermarkets, because they operate in a competitive market.
Mail-order prescriptions have also become an option for consumers.
But Horton says mail order should remain an option – not the only option.
“It should always be an option, but not a requirement,” Horton said.
Some pharmacists in Maryland are making the tough decision to keep their stores open even though they’re losing money. Spotlight on Maryland’s Tessa Bentulan will be speaking to those store owners as she continues this series. Spotlight on Maryland is a collaboration between FOX45 News, WJLA in Washington, D.C., and The Baltimore Sun. Have a story tip? Email [email protected] or call 410-467-4670. Bentulan can be reached at [email protected].
Source: wjla.com
