Could “good news” turn into “bad news”

I recently wrote about CVS’ announcement about their 23% increase in net profits

https://www.pharmaciststeve.com/?p=3581

Over the decades, I have seen the PBM’s claw back every increase of profits that community/retail pharmacies has managed to cobble together..

Back in 1969 when the “drug cards” came on the scene… wholesalers worked a gross profit in the upper teens.. the only discount that community pharmacies got was 2% for paying promptly and community pharmacies typically generated a gross profit in the mid-high 40% range.  AWP ( Average Wholesale Price) was the rule and generic utilization was in the very low single digits.

By the mid-70’s… the 2% prompt payment was replaced with a 10% discount on of AWP.. the number of products available generically started to increase and the FEDS started implementing MAC (Maximum Allowable Cost) for Medicaid. PBM’s started moving the “dispensing fee” downward.

As time passed, the PBM’s chipped away at the dispensing fees and reimbursement was becoming AWP less a  increasing per-cent..

Will this announcement by CVS of increased profits… set the wheels in motion for the PBM’s to claw back these “excessive profits”.. to be mostly put in their coffers ?

And as corporate pharmacy tries to keep/increase their profits.. where do you think they are going to look to.. to make it happen?

One Response

  1. I think the trend (at my pharmacy chain) is vaccinations, MTM, and urgent care… all the while NOT thinking anything about the extra stress on the pharmacy staff nor any indication that more technician or pharmacist hours will be added to make it all happen. DO MORE with LESS… less help, funding, tech hours.

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