re: What is this doom text I just received from CVS pharmacy about PBM's?

I’d rather shite broken glass than walk into either a CVS or a Walgreens.

The pharmacy windows in North MS are closed half the time because they can’t staff them. And it’s not like it’s set hours…it’s mystifyingly random.

The last time I walked into one the lady behind the counter told me I could drive into Memphis to pick up my script.

I laughed and told her no way, I’m moving everything to my local hometown pharmacy.

A week later I walked into the local shop and they greeted me, got my stuff and I was on my way…A month later I went back to pick up a script and the pharmacist greeted me by name before I could say a word.

Prices are lower too.

quote:

---

Looks like these PBM guys are working for the corporate pharmacy companies - CVS, Walgreens, etc. They're delaying cheaper drugs in order to keep prices high.

---

Maybe, but there is another angle. These PBMs are hired by the large Commercial Health Insurers, like Blue Cross, etc. Essentially they are hired by Blue Cross to manage the drug benefits of the plan. So the model is that they save Blue Cross money on what Blue Cross has to pay for drugs( i.e Benefits) in addition to what Blue Cross has to pay for the services of the PBMs.
The PBMs may or may not get a % of the savings each year, based on the contract (higher contract, lower %, lower contract price, Higher %). Either way, they are massively incentivized to get better margins, including negotiating for better margins on certain "preferred" drugs that they try to push the consumer/patient to, usually by doing so in the Tier system with higher vs lower copays.
Now to your point. a 1% margin on a $100 drug is $1 while a 1% margin on a $1 drug is 1 penny. you Can see why they would want to have a healthy supply of $100 drugs if they are margin based vs total savings to the Blue Cross based.

The only reason I ever go to CVS is because one of my wife’s prescriptions has been hard to get at Walmart. They have the medicine just not in the dosage she takes. So I get everything but that one at Walmart and have to go in the CVS every 90 days to get that filled. Of course the last time I went to get it, the pharmacy was closed for lunch. Even at Walmart the lunch break is from 1:30-2:00, not a full hour.

A friend of mine put it this way:


I understand the concern for jobs and access to care—this is heartbreaking for so many good pharmacists and patients. But let’s be honest about who’s really making the choice here. CVS had two options:
1?? Close their pharmacies, or
2?? Shut down or scale back their PBMs (Pharmacy Benefit Managers)—the side of the business that brings in millions in profits.

They chose to protect the money-making PBM operations at the expense of local pharmacies and the communities they serve. This isn’t about legislation “forcing” closures—it’s about corporate priorities. Patients and pharmacists are paying the price while big corporations protect their profit margins. Let’s hold the right people accountable.

quote:

---

So essentially CVS/Caremark will have to choose operate as Caremark the PBM or their retail CVS store if the law holds up in court. If forced to choose, they will pick Caremark.

---

Seems like a bold move for CVS. I understand Caremark is probably more profitable for them today, but what happens when a bunch of states pass similar laws and they no longer have the built-in advantage of owning the nation’s largest retail pharmacy chain?

Meanwhile, everybody (non-PBM owned pharmacies, health insurance companies, drug manufacturers, the FTC, lawmakers, etc…) is scrutinizing the entire PBM business model right now. So what happens if/when further reforms and market disruptions happen? CVS is left with no retail pharmacy chain (which hurts their PBM business and eliminates a ton of revenue), a more competitive PBM marketplace, no spread pricing, and no drug rebates?

It seems like it would be wise for CVS to read the writing on the wall instead of sacrificing their original core business to prove a point.

quote:

---

It seems like it would be wise for CVS to read the writing on the wall instead of sacrificing their original core business to prove a point.

---

Walgreen's is going bankrupt. They don't own a PBM. CVS is hoping more states won't make the move and they can ride out the Trump train. PBM's produce ZERO value and only add expense. They need to disappear. I hope they all go out of business, they have fricked medicine to the point of insolvency. United Healthcare and Optum RX, CVS Caremark, ExpressRX, Walgreens. If they cease to exist, things will only get better. Throw in Humana and Cigna.

To be fair, Walgreens going bankrupt is more due to their own frickery.

They made a terrible choice to try and invest in primary care, lost a ton of money from Opioid lawsuits, and are terribly staffed. Every pharmacist I know that has ever worked there, jumped at the first opportunity to leave. Its not cheap to constantly spend money training new hires with high staff turnover

quote:

---

I just switched to a local pharmacy and have no idea why anyone still goes to Walgreens and CVS.

---

My health insurance company only covers my medications if I go through CVS. So there's one idea you can have for why people might use CVS.

quote:

---

Seems like a bold move for CVS. I understand Caremark is probably more profitable for them today, but what happens when a bunch of states pass similar laws and they no longer have the built-in advantage of owning the nation’s largest retail pharmacy chain?

---

I question the state’s reasoning for this law. It just seems like an anti competitive measure. It exclusively affects CVS and doesn’t address the PBM problem.

The pharmacy is CVS’ least profitable line of business. I guess the legislative thinking will be that by reducing the number of pharmacies will result in lower prices for the remaining chains?

quote:

---

I use a local pharmacy exclusively, it's a much better experience.

---

I can’t fathom how miserable the pharmacy experience will become for everyone given half the pharmacies in town are CVS and there’s no way the locals could serve all of those customers if the law passes.