Healthcare’s Secret Middlemen

It is a common practice with which we are all quite familiar. A doctor writes a prescription and the patient goes to the pharmacy to fill it. But don’t blink. Some behind the scenes players are keen on changing things in a big way.

And unless Kentucky lawmakers act, they will drastically limit access to Kentucky’s healthcare providers, raise out of pocket costs, and potentially put local pharmacies out of business.

Until recently, filling a prescription was an easy process for you and your pharmacist. Like many other health care transactions, you pay a small set copay for your medicine and a pharmacist provides you with your medication. But you may have noticed lately increased references to “specialty tier” medicines. These “special” medicines are often accompanied by a rather special price under the friendly sounding guise of “cost-sharing” or “co-insurance.”

Just to be clear, cost-sharing often means the patient gets to pay more. But that’s not all. Certain health plans and their partners are now trying to further limit patients’ access to these life-saving medicines by forcing them away from the expert care of the trusted local pharmacies in favor of required mail-order delivery.

So who is behind all these changes? The answer is secretive, unregulated middlemen known as pharmacy benefit managers, or PBMs.

PBMs are the middlemen between the drug makers and insurance companies. What most people do not know is that PBMs play a major role in determining which medicines are available to you and at what cost. Sadly, many PBMs profit via practices that are detrimental to both patients and the pharmacists who care for them.

When most people think of a pharmacy, they envision large chain store where someone takes your prescription, hands you a bag with your medication, and sends you on your way. But the more than 500 independent pharmacies in Kentucky play a much larger role in providing care, particularly for those in rural areas.

In these settings, pharmacists are more than just someone behind a counter. In many ways, these mom-and-pop style businesses are the most immediate and accessible medical professionals in their area and are often cornerstones in their communities.

Yet these small pharmacies have been threatened for years by unfair PBM practices. It began with shadowy reimbursement methods that mean pharmacies often receive less than the actual cost of the medicine they dispensed. And now they’ve graduated to overt efforts to circumvent local pharmacies with required mail orders that could put trusted caregivers out of business.

This troubling new practice requires patients to forgo their face-to-face consultation with local pharmacists and only refill prescriptions for specialty medicines via mail. This removes access and consumer choice from the system and prevents another critical interaction between the patient and a well-trained health care provider.

This often impacts patient communities who least can afford a change in their treatment regimen, including those with cancer, mental and behavioral health issues and chronic pain.

Fortunately, Kentucky lawmakers can address these problems with common sense legislation. For starters, lawmakers should finally make PBMs play by the rules and treat independent pharmacies fairly and correctly according to the law.

But perhaps the most important step Kentucky lawmakers can take is giving the Kentucky Department of Insurance authority to regulate PBMs in the same manner as insurance companies.

Under the current setup, pharmacists have no recourse to resolve unfair, inappropriate or even arbitrary actions of PBMs. By regulating PBMs, the state will have the ability to both sanction and fine those companies that engage in activities prohibited by state law.

In many communities, independent pharmacists are the backbone of local medical care, providing their patients with needed medications and a familiar expert face with whom to discuss their personal health and wellness. Instead of allowing shadowy PBMs to push them aside, we should be supporting local pharmacies and the services they provide to so many Kentuckians.

Correcting unfair PBM practices is critical to improving access to care for all Kentuckians. And that is something we should all care about.

Rosemary Smith is the Director of the Kentucky Independent Pharmacist Alliance (KIPA). She and her husband are both pharmacists and own Jordan Drug in Beattyville, Kentucky. More information is available at

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Ben Keeton

Publisher at Medical News
Ben is the publisher of Medical News and focuses on the business of healthcare in Kentucky.
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