The winds of change are blowing through the pharmaceutical landscape, promising potential financial benefits for drugstore chains like CVS Health, Walgreens, and Walmart, as well as independent pharmacies nationwide. While recent legislative efforts in Congress haven’t yielded immediate results, the momentum for pharmacy benefit manager (PBM) reform remains strong, enjoying bipartisan support and the backing of both outgoing and incoming administrations. This unusual political alignment suggests that legislative action is not a matter of if, but when. The urgency stems from the increasing number of pharmacy closures across the country, attributed in part to reimbursement pressures exerted by PBMs.
PBMs, intermediaries between drug manufacturers and consumers, manage prescription drug benefits for employers and government health programs like Medicaid and Medicare. Their role includes determining pharmacy reimbursement rates, a function that has drawn increasing scrutiny. Critics, including lawmakers and taxpayers, question whether PBMs are adequately passing savings onto consumers. This scrutiny has already spurred state-level legislative action, leading to increased payments for pharmacies in several states. PBM executives themselves acknowledge the changing regulatory landscape, anticipating further federal and state regulations impacting their business practices.
One key area of bipartisan consensus in Congress revolves around Medicaid managed care programs. Proposed reforms would mandate that PBMs reimburse pharmacies based on the National Average Drug Acquisition Cost (NADAC) plus the state’s dispensing fee in all 50 states. This measure aims to eliminate “spread pricing,” a controversial practice where PBMs charge health plans more than they reimburse pharmacies, pocketing the difference. Instead, PBMs would receive a flat administrative fee. The National Community Pharmacists Association estimates these changes could save taxpayers approximately $1 billion over a decade.
While the financial impact of these reforms on CVS Health, which owns the PBM Caremark, remains uncertain, other emerging regulations at the state level are poised to benefit pharmacies, including those owned by CVS and other chains. One prominent example is the growing trend of “test-to-treat” legislation. These laws empower pharmacists to prescribe certain medications, expanding their scope of practice. This initiative builds upon the existing practice of pharmacists conducting tests for illnesses like COVID-19 and flu, allowing for more immediate and convenient access to treatment.
The expansion of pharmacist prescribing authority represents a significant shift in the healthcare delivery model. By enabling pharmacists to prescribe medications for common ailments, patients can receive timely treatment without needing a separate visit to a physician. This streamlined approach can improve patient outcomes, particularly in underserved areas with limited access to primary care providers. Furthermore, it reduces the burden on the healthcare system by freeing up physician time for more complex cases. The trend towards pharmacist prescribing is gaining traction across the country, with dozens of states enacting or considering similar legislation.
The confluence of these factors – bipartisan support for PBM reform, increasing scrutiny of PBM practices, and the expansion of pharmacist roles – paints a picture of a rapidly evolving pharmacy landscape. While the specific details of future legislation remain to be seen, the direction is clear: greater transparency and accountability for PBMs, coupled with an enhanced role for pharmacists in patient care. These changes hold the promise of not only strengthening the financial viability of pharmacies but also improving access to affordable and convenient healthcare for consumers. The long-term impact of these reforms will undoubtedly reshape the pharmaceutical industry and the way patients access medications.
The combined effect of PBM reform and expanded pharmacist prescribing authority has the potential to significantly alter the healthcare landscape. By addressing the reimbursement challenges faced by pharmacies and empowering pharmacists to provide more direct patient care, these changes could lead to a more efficient and patient-centered healthcare system. As states continue to explore innovative approaches to healthcare delivery, the role of pharmacists is likely to continue expanding, offering new opportunities to improve patient outcomes and reduce healthcare costs. The ongoing dialogue and legislative action surrounding PBMs and pharmacist prescribing will undoubtedly shape the future of pharmacy and its vital role in healthcare.
