Pharmacies want level playing field
Carter Drug Company is taking a stand for small, independent pharmacies.
Sitting on the store’s front counter are two, identical petitions, asking customers to pick Carter’s as its pharmacy of choice.
The petitions partially stem from a price mismatch for Medicaid prescription co-pays between corporate stores and independent pharmacies, such as Carter Drug Company.
As an example of the discrepancy, Carter’s co-owner Tim Williamson said customers at big chains will often receive free medication as a part of Medicaid Part D coverage, whereas, at independent pharmacies, the co-pay remains $5 or $6. The difference is caused when entities are given preferred care status, according to American Pharmacy Cooperative legislative affairs Director Bill Eley, whose company represents Carters and dozens of others.
Eley, Williamson and other independent pharmacy owners are lobbying to receive the same preferred care status, meaning a lower price of medication.
“I call it taxation without representation,” Eley said. “These smaller pharmacies aren’t even offered preferred care status. If Carter and others were willing to accept the same reimbursement, I don’t understand why it wouldn’t be offered.”
Without preferred care status, Williamson said he’s worried younger customers will migrate to cheaper options, reducing long-term profits. Costs may be higher, for some, to use Carter Drug Company, but Williamson says quality of service is an equally important consideration.
“For big chains, the goal is to get [customers] in the front door,” Williamson said. “Prescriptions aren’t as big of a percentage of revenue. Larger companies cannot compete with independent pharmacies in terms of the level of service that we provide.”
Eley said the petitions could be an effective method in convincing U.S. legislators to pass a measure, giving independent pharmacies the same preferred care status.
“Corporations don’t translate into votes,” Eley said. “If a member of Congress sees names on a list, people that took time out to show that they care about where their drugs come from, I’m hoping the legislators will realize the importance of representing the voter’s interests.”
Pharmacy benefit managers lie in the middle of the process. Pharmacy benefit managers administer prescription drug plans through employers, insurance plans and Medicaid Part D.
Charles Cote, a spokesman for the Pharmaceutical Care Management Association, struck a different tone. As a representative of pharmacy benefit managers, Cote said the issue is an example of a free-market economy. He said a free market economy doesn’t mean all organizations receive identical treatment.
“When you have that kind of competitive market, it’s going to force independent pharmacies to increase foot traffic through their stores,” Cote said. “One way to do that is lowering their prices. There is not a huge appetite to pay drug stores more for prescription medicine.”
The petitions aren’t the first time that independent pharmacies have raised concern about the tactics of pharmacy benefit managers and large organizations. Last year, the Medicaid Pharmacy Study Commission, appointed by Gov. Robert Bentley looked into ways to save money in the state’s Medicaid programs money. An independent study, presented to the commission found that proposals would save the state $35 million annually. Proposals included Walmart and two pharmacy benefit management groups.
No large-scale changes were made as a part of the study, after the commissions members expressed concern about the effect on independent pharmacies.
“For many stores, it would have a negative impact and could result in one or more stores closing in the state,” State Health Officer Don Williamson said in a previous interview with the Times-Journal. “Unfortunately, there isn’t a simple answer.”
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