Independent Pharmacies Face Growing Financial Strain
Many independent pharmacies are busier than ever due to the coronavirus pandemic. However, this does not mean that they are doing well financially. A recent article from The Philadelphia Inquirer examines why many independent pharmacies are currently struggling.
The author first examines the case of Richard Ost, whose local pharmacy has been in operation since 1983. In response to the coronavirus pandemic, he took the following actions:
- Hired more drivers for prescription delivery
- Acquired PPE for employees
- Hired employee to watch door and give masks to customers
While Ost is quite buy responding to demand that is higher than ever, he is resigned to the fact that his business will lose money this year. The case is the same for many independent pharmacists. Why? The author examines the following sources of financial pressure for independent pharmacists:
- Consistently shrinking drug reimbursements – While the pharmacy still has to do the same amount of work, use the same amount of packaging products, and pay the same number of employees, it makes less money per prescription filled when reimbursements go down.
- Lower professional services fees – Medicaid programs, in particular, put a cap on the professional service fees that pharmacists can charge for filling prescriptions.
- Bureaucratic hangs ups – The running of Medicaid pharmacy networks is typically contracted out to private companies—Pharmacy Benefit Managers (PBMs). If independent pharmacists do not accept the terms set by the PBM, they risk losing out entirely on that source of business.
For further details, click here to read the article in full.