Customers all around Oregon have reported standing in line for hours at pharmacies and waiting weeks for prescriptions to be filled.
One reason for the wait times is staffing shortages. Another is a lack of locations – Bi-Mart announced recently that it’s getting out of the pharmacy business altogether.
Kevin Russell spent 28 years working in community pharmacies and is now the Central Oregon Regional Director on the Oregon State Pharmacy Association board.
Russell told OPB that intermediary companies called Pharmacy Benefit Managers have too much control over the prices of prescription drugs, and that causes a ripple effect.
“PBMs were just someone that processed claims on the behalf of insurance, but they have grown and consolidated throughout the entire pharmacy industry, to the point now that they have a complete oligopoly on the pharmacy marketplace,” Russell explained.
“Since the pharmacies can’t change what they pay for drugs, and they can’t change what they’re getting paid for drugs, the only thing they can do is cut back their expenses. And the only controllable expenses they have really is staffing.”
Russell told OPB that a shift in the industry started around 2017, noting there “were massive layoffs of pharmacists throughout the country.” With COVID-19 began to spread worldwide in early 2020, the pharmacy industry, already under pressure, faced more strain. The pandemic “just kind of made things worse,” Russell said.
The pandemic also brought out the best in pharmacies, Russell said. “[Pharmacists] stayed at work, they worked long hours. They spent the extra money that was necessary to take care of patients and deliver drugs. They did all those services, but that was extra time without any extra staffing that they just didn’t have… now they’re doing vaccinations… doing a wonderful job with that, but it’s just too much. It’s more than they can possibly do.”
While pharmacy staffs are squeezed across the country, Oregon’s problem has another layer with the Corporate Activity Tax that recently went into effect.
Here’s how it works, according to Russell: Under Oregon law, a company’s revenues are taxed instead of its profits. For a typical pharmacy that has millions of dollars in revenues, the wider company may not actually make a dime of profit out of that pharmacy.
The situation becomes having high sales, but a low-profit margin, similar to grocery stores.
There are several systemic issues at play that are making it hard for people in Oregon and around the country to fill prescriptions. Russell says the main long-term solution would be reform of Pharmacy Benefit Managers. But, in the short term, Oregon can bring change.
“There are already existing laws on the books, in the state of Oregon, for PBMs,” Russell said. “For example, PBMs can’t pay a pharmacy below their cost of drugs. Those are currently not being enforced by the state of Oregon. So, if we can get some enforcement behind those and at least get some of that relief from that, that will help. And another thing that can be done that the legislature can do is just exempt prescription drugs from the [Corporate Activities Tax]. That is something that can be done quickly in the next session. So those are things that can be done from a legislative and state government point of view.”
So what can you as a pharmacy customer do to help address the growing issue?
“From a people point of view, I would suggest complaining to your employer and insurers,” Russell said “The PBMs only answer to one person, and that is their client, their insurer, or their employer group. And they’re obligated in their contracts with those insurers and employers to provide access to prescription drugs for their covered patients. If enough people complained to the insurers and employers, they’re going to go back to the PBMs.”
Sage Van Wing contributed to this story.
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