As Vermont’s independent pharmacies disappear, Lynne Vezina has managed to keep Vermont Family Pharmacy in Burlington afloat.
But it’s not easy, Vezina said. Among the challenges, she said, are pharmacy benefit managers.
“They drive everything,” Vezina said. “You need to go along with what’s going on, or you’re not going to be able to fill any prescriptions at all. And they just consistently pay you less than cost.”
Pharmacy benefit managers, or PBMs, negotiate contracts for prescription drugs on behalf of health insurance companies, employers and unions.
State Rep. Mari Cordes, D-Lincoln, agrees they are one reason independent pharmacies in Vermont are vanishing.
“They’re a huge industry with way too much control over the cost and the distribution of drugs and medication,” Cordes said.
Cordes is sponsoring a bill, H.353, that would limit pharmacy benefit managers’ control over pharmacists and provide more transparency about prescription drug costs to patients. It passed the House on Wednesday.
Cordes said 75% to 80% of people with prescription drug coverage have it managed by one of three pharmacy benefit managers: CVS Caremark, Express Scripts or Optum Rx, a division of UnitedHealth Group.
Cordes said pharmacy benefit managers can direct pharmacists to medications that are more profitable to the pharmacy benefit managers and the pharmaceutical companies.
Brattleboro Pharmacy closed Tuesday with all prescriptions transferred to Rite Aid, the Brattleboro Reformer reported.
In 2020, three Marble Works pharmacies closed in Vergennes, Middlebury and Bristol — in Cordes’ district.
Patients’ accounts were transferred to Walgreens, Cordes said, and some found that instead of having to pay tens of dollars for prescriptions, they had to pay hundreds.
“It caused chaos for people trying to fill their prescriptions,” she said. “PBM negotiations with insurance companies often artificially jacks up prices behind the scenes. Nobody has access to that data.”
Walgreens did not respond to a request for comment.
Cordes said if a patient’s prescription has been jacked up from $45 to $400, the pharmacist is not allowed to tell the patient if there is a cheaper solution.
“Access to pharmaceutical care in Vermont is in jeopardy,” she said.
Pharmacists are being muscled into getting reimbursed less, Cordes said, and are told which medications they can and cannot carry because a particular medication might not be on a pharmacy benefit manager’s preferred list.
She said pharmacists frequently lose money when they dispense medications.
Pushback from the industry
In testimony against Cordes’ bill before the House Committee on Health Care on March 10, Steven Larrabee, senior director of state government relations for CVS Health Care, which owns CVS Caremark, pushed back against the idea that pharmacy benefit managers are unfair to independent pharmacists.
“CVS Caremark takes seriously the importance of reimbursing pharmacies in our network fairly,” Larrabee said. “Independent pharmacies are reimbursed at a higher rate than large regional and national chains, including CVS Pharmacy.”
After the House passed H.353, CVS Health spokesperson Brittney Manchester had a quick reply.
“While Vermont legislators may want to expand prescription drug access, H.353, as written, will instead raise prescription drug costs for patients,” she said. “This bill will increase costs on families who utilize home delivery for their medications, which is especially important for rural residents, and for those that rely on already costly specialty medications to manage their condition.”
Vezina said it’s not uncommon for her to be able to fill a prescription for a generic medication but to be told by a pharmacy benefit manager:
“No. We don’t pay for that. We only pay for the brand,” she said.
Cordes said pharmacy benefit managers pose a threat to how Vermonters access medications.
“Our community independent pharmacies are soon to be no longer if we don’t do something,” Cordes said. ”And then we won’t have much control at all, not only over the cost of medications, but the access to specific medications that people need. It’ll be the PBMs deciding.”
Jeff Hochberg, president of Vermont Retail Druggists, said pharmacy benefit managers tell patients the only way they can get a prescription is to go through their mail order or to a local affiliate that has a retail pharmacy.
Larrabee also pushed back against the notion that pharmacy benefit managers steer patients away from independent pharmacies.
“Local, independently owned pharmacies are really important partners in creating pharmacy networks,” Larrabee said.
He said that, as of 2020, independent pharmacies accounted for 40% of CVS Caremark’s national network.
What H.353 would do
Cordes said her bill, which now heads over to the Senate, would prohibit pharmacy benefit managers from preventing pharmacists from disclosing to patients any health information that the pharmacist deems appropriate or from discussing the total cost of medication.
It would allow the state Department of Financial Regulation to have access to some financial information behind the prices that end up being charged to patients.
The House has weakened the bill since Cordes introduced it. Originally, it required pharmacy benefit managers to be licensed by the Vermont Department of Financial Regulation, but that would have required funding.
Cordes’ original bill also would have allowed the Agency of Human Services, through a competitive bidding process, to hire one or more wholesale drug distributors.
“That way, we would have much more control over the cost of medications through this wholesale program,” Cordes told VTDigger in January.
That provision is now gone.
State Sen. Cheryl Hooker, D/P-Rutland, has introduced a companion bill.
New York, Michigan, Arkansas, Oklahoma and Tennessee have passed similar legislation, according to Hochberg of Vermont Retail Druggists.
For Vezina, the bill now before the Senate is a first step toward rebalancing the power dynamics between pharmacy benefit managers and independent pharmacists such as herself.
“I really feel like there’s this pie, and everybody wants a piece of the pie, but there’s really no piece left for the pharmacy,” Vezina said. “As the PBMs have gotten bigger and bigger, they have more control. They can do whatever they want, basically.”
