Pharmacy benefit managers are coming under fire for the emergence of "pharmacy deserts" across Minnesota. As drug costs soar, small-town pharmacies are being squeezed out, leaving residents with limited options for obtaining their prescription medications. FOX 9's Kelcey Carlson delves deep into this issue.

Unraveling the Impact of Inflated Drug Costs on Pharmacy Access

Pharmacy Deserts in Minnesota: A Growing Crisis

In recent years, Minnesota has witnessed a significant decline in the number of independent pharmacies. In 2012, there were 406 such pharmacies, but today, that number has dwindled to just 156. This trend has led to the creation of "pharmacy deserts," where residents are forced to travel long distances or rely on mail service to get their prescriptions filled.For instance, Deborah Leedahl, who recently closed her pharmacy in Elk River, recalls, "In the beginning, PBMs were a middleman between pharmacies and insurance companies. But as insurance companies started buying out PBMs, things changed." This shift has had a profound impact on local communities, as people now face the inconvenience and expense of traveling long distances to obtain their medications.

The Role of Pharmacy Benefit Managers (PBMs)

Pharmacists like Debroah Keaveny, who owns and operates Keaveny Drug in Winsted, believe that independent pharmacies are being driven out of business by PBMs. These middlemen are supposed to negotiate prices with insurance providers and drug manufacturers. However, in many cases, PBMs are now under the same ownership umbrella as large insurance companies and pharmacy chains.Express Scripts, CVS Caremark, and Minnesota-based Optum control pricing for about 80 percent of prescriptions filled in the US. Optum is in an ownership chain with United Healthcare, CVS Caremark with Aetna, and Express Scripts with Cigna. This concentration of power gives PBMs significant influence over which pharmacies can fill prescriptions, what prescriptions can be filled, and how often they can be filled.Keaveny has joined a class action lawsuit against PBMs and is advocating for new legislation at both the state and federal levels. She is also partnering with Mark Cuban on a project aimed at lowering the cost of prescription drugs.

The Impact on Patients

The consequences of "pharmacy deserts" are far-reaching. Nearly 30 percent of Americans surveyed report rationing or even skipping doses of their prescribed medicines due to high costs. This not only affects the health and well-being of patients but also puts a strain on the healthcare system.For example, one patient might have to travel 20 to 130 miles to get to a CVS store to fill a prescription instead of using a non-CVS pharmacy. This not only takes up valuable time but also incurs additional costs in terms of fuel and transportation. And for those who rely on mail order, there are often delays and complications.As Deb Keaveny points out, "If you have an infection or pain, you can't wait three weeks to get a prescription filled. And who is going to explain it to you, the mailman?"

Regulatory Scrutiny and Legal Actions

State and federal regulators are also taking a closer look at PBMs. In July, the Federal Trade Commission found that "these powerful middlemen may be inflating drug costs" and "squeezing main street pharmacies."The report highlights how PBMs hold substantial influence over independent pharmacies by imposing unfair, arbitrary, and harmful contractual terms. This can make it difficult for independent pharmacies to stay in business and serve their communities.For instance, CVS Caremark was fined $1.5 million in 2022 for requiring members to use their own pharmacies to get maintenance drugs for conditions like diabetes and high blood pressure. And the Minnesota Department of Commerce has contributed to the growing number of "pharmacy deserts" across the state.

The Debate over PBMs' Role in Drug Pricing

The companies that operate PBMs have defended their role in drug pricing. In statements, they argue that PBMs lower prices for customers while reimbursing pharmacies at higher rates.However, critics like Deb Keaveny believe that this is not the whole story. She argues that PBMs are using their power to drive up prices and squeeze out independent pharmacies.As Andrea Nelson, Chief Legal Officer for The Cigna Group, stated in an Express Scripts statement, "The FTC has taken unconstitutional actions in publishing a report that ignores the evidence provided by our company and other PBMs, demonstrates clear ideological bias and advances a false and damaging narrative."

Looking Ahead

Federal regulators say that PBMs lack transparency, and a bipartisan bill to add more transparency was passed in the US House one year ago. Senator Klobuchar voted to advance this bill out of committee in the Senate, but it has not yet reached the Senate floor.For Deb Keaveny and her customers, the future remains uncertain. If she were to close her doors, her customers would have to find another place to go. And for many, that may mean traveling long distances or dealing with the inconvenience of mail order.As we continue to grapple with the issue of inflated drug costs and "pharmacy deserts," it is clear that more needs to be done to ensure that patients have access to the medications they need.