Defeat the War on Independent Pharmacies with Lower Drug Prices

Defeat the War on Independent Pharmacies with Lower Drug Prices

The time has come to recognize the current onslaught of mega-sized chain pharmacies and insurance companies for what it is: a war on independent pharmacies. Pharmacy Benefits Managers (PBMs) are the frontline soldiers in this unrelenting battle to wring the profits out of independent community pharmacies.

If this sounds over the top, consider these recent news items:

  • United Health Group, America’s largest health insurer and owner of the third largest PBM, has agreed to purchase Catamaran, the nation’s fourth largest PBM, for $12.8 billion
  • In a recent NCPA survey announced April 7, 87% of all respondents reported waiting more than a month after a manufacturer’s drug price increase for PBMs to update their Maximum Allowable Cost (MAC)
  • A new report from Citi cites a survey among independent pharmacies in claiming that the smaller the pharmacy, the more they anticipate problems from recent distributor joint ventures

PBMs – The Perfect Foot Soldiers

PBMs are the perfect foot soldiers in this war, as they deliver lower costs to insurance companies while simultaneously controlling how much a pharmacy can charge for a medication. The difference between what the PBM charges the insurance company and the amount it reimburses the pharmacy is the PBM’s profit.

In a different era, this might have been considered conflict of interest. In the War on Independent Pharmacies, it’s just another battle. PBMs have grown to monstrous size.

Express Scripts, the largest PBM, was the 20th largest company in the USA in 2013, with revenues of $104.62 billion. The two largest PBMS combined, Express Scripts and CVS Caremark, now control 75% of the prescription drug market.

As PBMs continue to consolidate, reimbursements continue to fall. The grip of PBMs has become so tight that when Walgreen’s, the largest drug store chain in the nation, decided to go its own way and leave Express Scripts, they returned after only six months.

Lobbying – The Second Front

It may surprise you to learn that the Pharmaceuticals/Health Products industry was the single largest sector in terms of lobbying dollars in 2014, spending $230 million to influence legislation according to the Center for Responsible Politics.

In fact, of the top 20 lobbying sectors, healthcare earned these ranks:

#1 – Pharmaceuticals/Health Products

#3 – Insurance (of all types)

#11 – Hospitals/Nursing Homes

#12 – Health Professionals

#16 – Health Services/HMOs

These lobbying efforts are in no way transparent. For example, American Health Insurance Plans (AHIP) publicly supported Affordable Care Act legislation while privately funding the Chamber of Commerce fight to defeat it – to the tune of $102.4 million in only 15 months.

Independent pharmacies feel the sting of big money lobbying efforts when CMS and Congress refuse to recognize patient rights to choose any willing pharmacy, even in underserved areas.

With all these forces stacked against the independent pharmacy, what can you do?

Don’t Give Up – Take Control & Win

Every time the forces opposed to independent pharmacies lower your profits and reduce your control over your pharmacy, they score a victory. In order to fight back and win, you need to regain control.

TRxADE, the trusted marketplace for independent pharmacies, gives you the tools to do just that.

As the table below shows, by making as little as 20% of your drug purchases from top drug wholesalers via TRxADE, you can save well over $100,000 a year and STILL earn rebates from your primary supplier.

Avg Monthly Drug
Inventory Costs
% Purchased from
Primary Supplier
% Purchased via
8% Savings
14% Savings
20% Savings
250,000 90% 10% 2,000 24,000 3,500 42,000 5,000 60,000
250,000 85% 15% 3,000 36,000 5,250 63,000 7,500 90,000
250,000 80% 20% 4,000 48,000 7,000 84,000 10,000 120,000
300,000 90% 10% 2,400 28,800 4,200 50,400 6,000 72,000
300,000 85% 15% 3,600 43,200 6,300 75,600 9,000 108,000
300,000 80% 20% 4,800 57,600 8,400 100,800 12,000 144,000
350,000 90% 10% 2,800 33,600 4,900 58,800 7,000 84,000
350,000 85% 15% 4,200 50,400 7,350 88,200 10,500 126,000
350,000 80% 20% 5,600 67,200 9,800 117,600 14,000 168,000

This is why more than 3,000 independent pharmacies have joined TRxADE. But while some pharmacies save more than $100,000 a year on TRxADE, others don’t do as well. Why?

Saving Money Must Become a Habit, Not a Hobby

Think of this as your call to duty. Your prescription. Your stand.

If you dabble with TRxADE a few minutes each month, honestly, you’re not going to get much out of it.

But, if you work with our Membership Assistance Team through your first five orders and allow them to show you how to optimize your use of TRxADE, it will soon become second nature to you and you will start saving thousands of dollars each month.

To regain control of your pharmacy and start optimizing your use of TRxADE, call 1-800-805-8705.