Compounding
PBMs and local pharmacies
When a patient needs a medication that doesn’t come off a manufacturer’s shelf, such as a dye-free liquid for a child, a custom-strength hormone therapy, or a drug in shortage, a compounding pharmacist makes it by hand. PBMs treat that work as a cost to eliminate. They exclude compounded ingredients from coverage, reject claims for bulk powders, and pile on prior authorization requirements that delay care for patients with no commercial alternative. When claims are paid, reimbursement often falls below what the pharmacy paid for the ingredients, with nothing for the pharmacist’s time, specialized equipment, testing, or the compliance costs of meeting state and federal compounding standards.
The claims that do get paid aren’t safe either. Compounded prescriptions are frequent audit targets, and PBMs can claw back the full payment months later over a clerical technicality, long after the patient has taken the medication. Meanwhile, the same PBMs steer patients toward their own affiliated mail-order and specialty pharmacies and use restrictive network and credentialing terms to keep independents out. The result is fewer local compounders, and patients with unique medical needs left paying cash or going without.
Reimbursement
PBMs and local pharmacies
Independent pharmacies don’t set their own prices. PBMs do, through take-it-or-leave-it contracts that dictate what a pharmacy is paid for every prescription. Too often, that payment is less than what the pharmacy paid its wholesaler for the drug, before counting the cost of staff, rent, or the pharmacist’s time. Reimbursement for generics is set by secret MAC lists that PBMs can change without notice, and appeals of below-cost claims are routinely denied. A pharmacy can fill a prescription correctly, serve the patient well, and still lose money on the sale.
The price on the claim isn’t even the final price. Through effective rate contracts, performance fees, and other after-the-fact adjustments, PBMs take money back weeks or months later, so a pharmacy owner can’t know what a prescription actually paid until long after it left the counter. At the same time, PBMs can pay their own affiliated pharmacies more for the same drug, and bill health plans more than they pay the pharmacy, keeping the difference. No small business can survive selling below cost to a competitor that sets the price. When the local pharmacy closes, patients lose access and the community loses a health care provider.
Patient Steering
PBMs and local pharmacies
Patients should choose their pharmacy. PBMs increasingly choose it for them. The largest PBMs own mail-order and specialty pharmacies, and they design benefit plans to push patients there: lower copays at affiliated pharmacies, 90-day fills available only by mail, narrow networks that leave out the local independent, and “specialty” designations that require a drug be filled at the PBM’s own pharmacy. Patients who have used the same pharmacist for years get letters and phone calls telling them their prescription must move, often prompted by claims data the independent pharmacy was required to submit in the first place.
This is a conflict of interest, not cost savings. The PBM is deciding where a prescription gets filled while profiting from the answer. Patients pay for it in delayed shipments, medications left on porches in Florida heat, and the loss of a pharmacist who knows their history and can catch a problem face to face. Independent pharmacies pay for it by losing patients they never had a chance to compete for. A company that manages the benefit shouldn’t be allowed to send the business to itself.
Pharmacy Closures
PBMs and local pharmacies
Pharmacies are disappearing. Roughly one in three U.S. pharmacies closed between 2010 and 2021, and independents were more than twice as likely to close as chains. About one independent pharmacy closed every day in 2023, and nearly half of U.S. counties now have at least one pharmacy desert. Florida is not immune: it ranks among the seven states that have lost the most retail pharmacies since 2021.
These closures are not the free market at work. Pharmacies that are busy, trusted, and well run are closing because PBMs pay them less than it costs to fill a prescription, take money back after the sale, and steer their patients to PBM-owned competitors. When a pharmacy closes, the loss goes beyond prescriptions. Patients lose vaccines, medication counseling, and often the most accessible health care provider in town, and those who have to travel farther are less likely to take their medications as prescribed. Seniors, rural communities, and low-income neighborhoods are hit hardest.
