Pharmacy benefit managers (PBMs) started in the 1960s as subcontractors to manage drug benefits for health insurers, providing drug formulary management, negotiating rebates and discounts from drug manufacturers, and processing and adjudicating prescription drug claims.
In simple terms, they act as middlemen, managing prescription drug benefits on behalf of health insurers and determining the drugs your health plan covers and the prices you pay for those drugs. However, they have developed business interests in the very marketplace for which they were initially hired to control costs.
Did you know that 66% of all American adults take a prescription drug? Nearly all of those 131 million Americans rely on a pharmacist to dispense that medication at a pharmacy, whether at a chain pharmacy, a local independent pharmacy, or a grocery store.
Pharmacies form the foundation of nearly every community in this country, and both patients and pharmacies are under threat from PBMs and their harmful business practices. PBMs have directly led to the lights going out for thousands of pharmacies from coast to coast. They also drive up the cost you pay for medication while limiting, and in some cases denying, coverage of your medicine.
Data has shown that PBMs:
- artificially inflate the cost of drugs without fully reimbursing pharmacies for the drugs they dispense
- have led to increases in purchasers’ and patients’ drug prices through price discrimination
- use “list prices" that do not reflect the final cost of drugs
- force harmful retroactive direct and indirect fees and other “clawback” mechanisms on pharmacies, forcing smaller and independent pharmacies to close
PBMs are not a part of the pharmacist/patient relationship. PBMs drive up costs without adding value to patients and our health care system. PBMs’ business practices have robbed many communities of necessary health care, in towns and rural areas as well as in many cities with underserved communities, where the community pharmacy often is the only health care provider for miles around.
In a recently published article from the Associated Press, it was reported that data from the University of Pittsburgh has shown that more than 7,000 pharmacies have closed across the U.S. since 2019.
The ACT Pharmacy Collaborative Map below visualizes a series of examples nationwide that have been reported publicly by the press or through local reporting.
This map is a living document, updated weekly, with reported closures nationwide. It is not an exhaustive list, but a summary of examples that visually shows the effect PBMs are having on pharmacies nationwide.
The ACT (Academia-Community Transformation) Pharmacy Collaborative is a partnership of 115 of the 143 US colleges and schools of pharmacy organized within the American Association of Colleges of Pharmacy (AACP), under the AACP Transformation Center, with a focus on uniting, mobilizing, and amplifying the work of community pharmacy transformation nationwide.
Without action, things will only get worse. Without action, too many patients will find themselves living in health care deserts, forced to travel long distances for their most basic health care needs.
The time has come for Congress to act, and to act fast.
We need you to join APhA in this fight! Use our pre-filled submission form to send an email to your local representative in Congress to pass legislation to end PBMs now and protect our local pharmacies.