Independent pharmacies struggle in shifting landscape

BLUE HILL — Seniors enrolled in WellCare’s Medicare Part D prescription drug coverage who get their prescriptions filled at the Maine-based Community Pharmacy chain will likely have to pay a bit more for their prescriptions come Jan. 1.

Community Pharmacy, the nine location chain with a storefront in the Blue Hill Tradewinds, announced recently that it would no longer be a preferred pharmacy in WellCare’s Part D network, the optional Medicare insurance program that helps seniors pay for prescription drugs.

“We’re the ones that said no,” said Joe Bruno, Community Pharmacy’s president and CEO, who also serves as president of the Maine Board of Pharmacy. “We were actually losing money on it.”

The pharmacy will continue to be part of the WellCare network, which serves more than 4 million enrollees nationwide, said Bruno, but will no longer be a preferred pharmacy, meaning prescriptions may cost a little more.

Community Pharmacy customers who are also enrolled in Medicaid (which most are) won’t see a change in their coverage, he added.

Community Pharmacy was simply not able to accept the rates offered by WellCare as part of the preferred provider network, Bruno said.

“We hung in there for awhile just to help our customers, but it just got to the point we just couldn’t do it anymore. It gets to a point where you make a decision. At what point can you stay afloat and still fill prescriptions?”

Community Pharmacy is not alone in its struggles. Between 2003 and 2018, more than 1,200 independently owned rural pharmacies went out of business, according to a policy brief published by the RUPRI Center for Rural Health Policy Analysis at the University of Iowa.

“You have two really big expenses in pharmacy,” said Bruno, personnel and inventory, and “Drugs continue to go sky-high.” A recent shipment cost him roughly $20,000, said Bruno, yet “We’ll be lucky to make $500 on ’em.”

Independent pharmacies that once bridged health care gaps in rural areas by offering medications along with clinical services have struggled to compete with large chains in recent years.

“Most of the independent pharmacies, most of what they make comes from reimbursements from medications, whereas for large chains, it’s a very small aspect of where their revenue is coming from,” Michael Swanoski, a senior associate dean at the University of Minnesota College of Pharmacy, told the Washington Post last year.

“They have retail sales to keep them afloat, and prescriptions just get customers in the door so they can spend money on other things.”

Adapting to the shifting landscape created by Medicare Part D’s 2006 implementation also has been a struggle for independent pharmacies.

Where patients once paid for prescriptions in cash, pharmacies must now rely on “low and late reimbursements” from Medicare Part D plans, the University of Iowa brief notes.

“It’s become volume-driven versus getting to know your customers,” Bruno said. “It’s difficult — between the state Legislature and the insurance companies squeezing you,” he added, referring to a number of bills passed by the state Legislature this year aimed at lowering prescription drug costs.

“It seems like every year they look to punish you more and more.”

Governor Janet Mills signed a four-bill prescription drug reform package into law earlier this year that included legislation establishing a wholesale prescription drug importation program, authorizing the gathering of information relating to drug prices all along the supply chain and taking aim at pharmacy benefit managers (PBMs), intermediaries that negotiate the price of drugs between insurers, employers and drug companies.

Spending on prescription drugs has risen steadily over the years, increasing $1,000, or 38 percent, per Medicare beneficiary between 2010 and 2016, even while spending on hospital stays and skilled nursing care declined, according to a study by The Commonwealth Fund.

That jump was driven almost entirely by increases in the average price of prescription drugs. By 2016, spending on drugs was more than total spending on providers or hospitals: $3,896 on drugs per person, compared to $2,716 for inpatient care and $3,244 for medical providers.

In an effort to rein in prices and increase transparency, legislators from both parties supported the bill package, which would, among other initiatives, allow Maine to import prescription drugs from Canada (subject to federal approval).

But importing drugs from Canada “would have a huge impact” on pharmacies in Maine, said Bruno. “Remember that 93 percent of the people in Maine have insurance coverage,” he continued. “All they’re really paying is a copay. There’s very few cash-paying customers. I don’t know what we’re trying to do with this legislation.”

He continued:

“Honestly, I talk to a lot of pharmacies, being the president of the Board of Pharmacy. Nobody’s doing great.”

At least one Hancock County resident has indicated a willingness to pay a bit more to stay with a Maine-based chain. In a letter to the editor last week, Penobscot resident Dan Lutts wrote that he would find another Medicare Part D provider that has Community Pharmacy as a preferred pharmacy.

“And if I can’t find one, I’ll continue to support my independent pharmacy by paying a little more to have my prescriptions filled.”

Kate Cough

Kate Cough

Digital Media Strategist
Kate is the paper's Digital Media Strategist, responsible for all things social, and the occasional story too! She's a former reporter for the paper and can be reached at: [email protected]
Kate Cough

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