The National Community Pharmacists Association (NCPA) has released survey results indicating that a significant number of local pharmacies across the United States may be compelled to shut down this year. The situation could potentially worsen if lawmakers decide to postpone Pharmacy Benefit Manager (PBM) reform.
According to an NCPA press release, the survey reveals that nearly one-third of independent pharmacies might have to cease operations in 2024 due to a substantial decrease in prescription reimbursements by major insurance plans and their pharmacy benefit managers. "This is an emergency. And if Congress fails to act again, thousands of local pharmacies could be closed within months and millions of patients could be stranded without a pharmacy," stated B. Douglas Hoey, CEO of NCPA, in the press release.
The NCPA press release also highlighted the longstanding struggle faced by community pharmacies trying to stay operational as large insurance plans and what the association termed as "their monopolistic pharmacy benefit managers" erode their profit margins. A new rule from the Centers for Medicare & Medicaid Services, which took effect on January 1, has exacerbated their predicament by mandating insurance plans and PBMs to apply all pharmacy direct and indirect remuneration fees or price concessions at the point of sale instead of after it.
As per the NCPA press release, with reduced prescription reimbursements and increased back-end fees, 32% of community pharmacists who participated in NCPA's new survey indicated they are contemplating closure in 2024. Over 90% expressed that they might withdraw from Medicare Part D in 2025, with more than half of all respondents revealing that Medicare Part D prescriptions constitute 40% or more of their business.
The survey further revealed that 99 percent of community pharmacies have experienced a decline in prescription reimbursements since January 1; over half stated that insurance plans and their PBMs reimburse them at less than the cost to purchase the drug for at least three out of every ten prescriptions filled; and more than half indicated they incur losses on over 60% of the Part D prescriptions filled after accounting for the overhead expenses of running a pharmacy.
"If a third of all community pharmacies close, and if more than 90 percent stop accepting Medicare Part D, it will be a catastrophe for seniors, a hardship for most other patients, and a devastating blow to the overall health care system," Hoey emphasized. "This demands immediate action by Congress and the administration."
