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AS I SEE IT

As I See It: The right prescription for Oregon's pharmacy crisis

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As a lifelong Oregon resident and licensed pharmacist, I know my fellow Oregonians are still feeling the aftershocks of nearly 40 Bi-Mart pharmacy closures across the state last year. It was reported that the closure of more than half of those locations was the result of financial losses that threatened the health of the rest of their retail business.

The true victim of these closures, however, are the patients who relied on Bi-Mart pharmacies. One-third of Oregon’s population lives in rural areas and, without local pharmacies, many seniors and patients with serious medical conditions have to drive several miles and wait in line for hours just to fill a prescription or get simple questions answered.

When Bi-Mart sold its pharmacy business to Walgreens in late 2021, it closed 37 locations in Oregon. Patients with customer accounts at 30 of the closed locations suddenly found their accounts transferred to alternate locations, making it even harder for Oregon’s rural residents to access the medications their doctors prescribe.

The influx of Bi-Mart customers to small, independent pharmacies overwhelmed already short-staffed pharmacists. The unpredictable nature of the pharmacy business — it's hard to know how much of a particular drug to order or keep in inventory — makes an influx of new customers particularly challenging. That's why the Bi-Mart closures led to long wait times and long lines in other pharmacies.

You may be wondering: why is this happening? The reality is that decreased insurance reimbursements, and, most importantly, unfair "benefit management fees” left them unable to continue operating across the Pacific Northwest. And you have to look no further than pharmacy benefit managers, or PBMs.

PBMs are massive companies that work with insurers to negotiate which drugs get covered and which don't. Pharmacies must work with PBMs to get paid when they fill prescriptions. Given their size, the PBMs can play hardball with little guys. They charge countless fees and implement what are known in the industry as "clawbacks" — assessing charges on pharmacies weeks or even months after the point of sale if they don't meet nebulous or onerous sales benchmarks. PBMs often don’t even reimburse pharmacies for the cost of dispensing certain prescription drugs, making it nearly impossible to avoid operating at a loss.

These predatory PBM practices have been going on for a long time, forcing independent rural pharmacies to shut their doors. Nationally, more than a thousand independent rural pharmacies closed between 2003 and 2018, according to the University of Iowa.

The upshot is a market with only a handful of large sellers. The three largest PBMs — which are either owned by chain pharmacies or insurance companies — combine to fill 77% of all prescriptions. Their growth strategy? Charge sky-high fees to independent pharmacies until pharmacies are forced to close or sell to a national chain, thus giving national chains ever more market share.

PBMs don’t just cause rural Oregonians an inconvenience — they directly affect the pocketbooks of patients. With inflation driving up gas prices across the state, every extra mile between patients and their pharmacies adds to the total out of pocket expenses. PBMs are not even required to pass the discounts they negotiate on prescription drugs along to patients at the pharmacy counter.

Thankfully, our own Senator Ron Wyden understands the myriad ways in which PBMs hurt Oregonians and has called on the Federal Trade Commission to investigate their anti-competitive practices. He's also pushed for a Medicare rule that would limit the clawback fees PBMs charge pharmacies. We need Senator Wyden to continue pushing back and prioritize legislation that will meaningfully impact out-of-pocket costs for rural Oregonians.

If the predatory practices of PBMs continue, more patients will struggle to get the care they need because more local independent pharmacies will close. I urge Sen. Wyden and his Senate colleagues pass PBM reforms before it’s too late.

Lincoln Alexander, who holds a Doctor of Pharmacy degree, is the president of the Oregon State Pharmacy Association. To learn more about OSPA, visit oregonpharmacy.org.

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