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Pharmacy Deserts & Underserved/Rural Communities


In this part of his Pharmaceutical Executive video interview, Michael Abrams, Managing Partner, Numerof & Associates, speaks about the specific challenges that pharmacy deserts becoming a national issue presents for rural and underserved areas. Plus a discussion of which alternative solutions can help ensure continued access to medications for all.

With pharmacy closures becoming a national issue, what alternative solutions, besides telehealth with mail delivery, can help ensure continued access to medications for all Americans, particularly those in underserved communities?

Well, there are a lot of contributing factors to what's going on today, and there are a number of things that could be done. I think one would be pass some regulation that would improve the transparency of PBMs, so that would be apparent, for example, what kind of rebates they're getting from the manufacturers, and where those rebates go and how they arrive at the pricing that they are willing to give to the pharmacies for the drugs that they are then selling to patients. That would be a starting point.

Another idea that I've seen out there would be that Medicaid programs in rural states, make some allowance in the payment that they give to pharmacies that have light volume, and the sort of concession that they make is that and filling a prescription warrants a fee all By itself, but they pay slightly higher fees to pharmacies that have light volume, and the point of that is to help reinforce their financial base so they don't go out of business. And so, if you're going to do something to stop pharmacy deserts from happening, you got to stop pharmacies from closing their doors. They can't operate on negative margins that just doesn't work. So, ensuring that widening the availability of this sort of supplemental pricing for pharmacies that are eligible for these supplements would be a band aid, admittedly, but it would be an improvement. You know, various government at various levels could definitely incentivize pharmacies to move into areas that are classified as pharmacy deserts, whether it's through tax, you know, write offs or whatever, that would be a way to try and remedy the problem. Again, it doesn't get at the underlying issue, but it is something that you know is worth considering. If there was a mandate for pharmacy networks being larger than they are, that might encourage PBMs to include pharmacies who might not otherwise be included and be in network. Because being a network is the thing that makes the difference between, you know, the revenue being there and the revenue not being there. So that's an idea.

One more that I had that that's worth considering is making Medicaid and Medicare prescriptions eligible, eligible for reimbursed home delivery, and then the pharmacy could arrange for the delivery, especially for local delivery, your local Lyft or Uber and they could charge for that, and that would help them on the revenue side as well. I guess the last idea that I think, the last idea that that I had, or that I've seen, is pass legislation that would prohibit the PBMs from the practice that's known as spread pricing, which basically means that they buy a drug at one price from the manufacturer, and then they sell it at a lower price to the pharmacy, and they pocket the difference, and that That difference should not necessarily go to the PBM so.

Oh, and one last item, and this is an issue, particularly for independent pharmacies, who are truly under the thumb of the PBMs, and that is pass legislation on a national scale that would create an administrative way for individual pharmacies to process and resolve complaints by them against PBMs, because independent pharmacies don't have the resources to pursue to take these guys to court, and so if you. Don't give them some better way to deal with the issues that come up, and there are many then they're really kind of stuck. So that all of that would be a grab bag of ideas that might be pursued.

Pharmacy deserts were once a rural problem. How will the nationwide trend of pharmacy closures disproportionately affect rural areas, and what specific challenges will these communities face in accessing medications?

Well, I think all of the factors that are operating to impact the profitability of pharmacies are operating in rural areas as well, and the result, inevitably will be erosion of the number of pharmacies per resident and longer commutes to the nearest pharmacy for the people who live there in rural areas. So, some factors are even more serious in rural areas, things like the economic, economically driven pullback of consumers that shows up as less traffic in the store, fewer sales from the front of the store, and with fewer sales in the front of the store, it's very likely that you'll see fewer prescriptions fill, all because people are pulling back economically, because they're feeling the effects of inflation. You know, many residents of rural areas already are forced to drive significant differences at distances to obtain medical care. For those in communities that become pharmacy deserts, they will even more serious be that much more seriously handicapped.

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