Express Scripts signs 3 yrs contract and then wants to renegotiate (lower) reimbursements in the third year.

Notice that Express Scripts (ESI) specifically mentions the recent law that no longer allowed this PBM and others PBM to “gag” pharmacist from telling pts that they could PAY CASH for the Rxs and pay less than the PBM would charge the pt.

Now the pharmacist may initiate the discussion with the pt that there is a less expensive way to purchase their prescriptions.  Before this new law, the PBM contracts PROHIBITED a pharmacist from doing this.. they were only allow to discuss this with a pt – IF THE PT ASKED ABOUT THE PHARMACY’S CASH PRICE.

Of course, if a prescription is not processed – billed to the PBM – the PBM will not receive a discount/rebate/kickback from the pharma for the medication provided the pt.

Healthmart pharmacies are franchisees, so they are basically independent pharmacies and there are over 3500 such stores in the USA.  I suspect that this group of pharmacies are not the only ones that got such a letter about reducing the reimbursement and profits of independent pharmacies.

There have been reports – prior to this letter – that are forced to go out of business because they were getting reimbursed LESS THAN THE COST OF THE MEDICATION TO THE PHARMACY (wholesale price) on 25% or more of all prescriptions filled by a pharmacy.

NO BUSINESS – especially small businesses – can remain viable when they are selling 25% of their sales/transactions at up to 25% less than they were able to purchase the product(s) from the manufacturer or wholesaler.

Since the PBM industry came to be in 1969-1970…  in their negotiating a contract with a pharmacy… it is presented on a “take it or leave it ” basis… if the pharmacy doesn’t take/sign the contract – AS IS – the PBM will make sure that those people – pts of the pharmacy – will LEAVE – take their prescriptions/business  – to one of your competitors  and/or the PBM will attempt to coerce  the pt to get their prescriptions from the PBM owned mail order pharmacy.

If more than one pharmacy tries to negotiate with a PBM about their reimbursement rates the DOJ will step in and threaten to charge the pharmacies involved with “price fixing”, but the PBM and insurance industry are exempt from Sherman Antitrust Act… so they can LEGALLY “fix prices” without any consequences.

About ten years ago, Walgreens – with abt 10,000 stores tried to negotiate with a PBM (Medco) and refused to sign their low reimbursement contract and after abt six months … Medco continued to refuse to budge on the offered reimbursement, and Walgreen had to cave and sign the contract.  At the time Medco was the SECOND LARGEST PBM and Walgreen refusal to sign the contract … those Medco pts were forced to use a pharmacy that was not their first choice.

Because of the tactics of the PBM industry, many small/rural towns/areas no longer have a local pharmacy many of these pharmacies are independent pharmacies because the local population is not large enough to financially support a large chain pharmacy.

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