Advocates say Florida’s independent pharmacies in need of legislative support as competing against PBM business practices becomes increasingly difficult


Shane Ersland


Pharmacy benefit manager (PBM) business practices are hindering pharmacists’ abilities to provide needed medications for Floridians, according to Dr. Kevin Duane, owner of Panama Pharmacy in Jacksonville. 

Duane is one of many pharmacy owners who have testified in support of Senate Bill 1550, which aims to save Floridians money on prescription drugs by regulating PBMs. He told State of Reform that PBMs have negatively impacted his ability to care for patients for quite a while.

“I’ve been doing this for 10 years,” Duane said. “And it’s been increasingly difficult to care for people in our community.”

SB 1550 focuses on four key areas: increasing drug pricing transparency; creating defined relationships and contract requirements between PBMs and pharmacy benefit plans; doing the same between PBMs and network pharmacies; and holding PBMs to standards that protect the covered pharmaceutical consumer.

PBMs act as middle men between insurers and pharmacies, and decide patient copays and coinsurance amounts, what drug a patient is going to get—often overriding the prescriber—and how and where a patient is going to receive prescriptions. PBMs often force patients to use PBM-owned specialty, mail-order, or retail pharmacies, limiting their access to medications. 

“It started with insurance companies that were out of network, and patients were pushed into using pharmacies that are affiliated with PBM-owned insurance,” Duane said. “People who had relationships with us were unable to utilize their insurance at our pharmacy through no fault of theirs or ours. Then we saw that spread through Medicaid as well. Medicaid started to block out ours and a lot of family-owned pharmacies. A lot of people were being forced to move away from us.”

PBMs can steer patients to their own specialty or mail-order pharmacies by requiring a higher copay if the patient obtains their medication from a non-affiliated pharmacy.

“Some people have a choice, but their insurance company incentivizes mail order,” Duane said. “And I can’t fault them. They’re not able to afford to continue to come to us because of the discounts offered by a mail order their insurance is affiliated with. They understandably try to save every penny they can.”

PBMs often reimburse pharmacies a lower amount than what they paid to acquire a drug.

“That’s always been a thorn in our side,” Duane said. “They offer you a contract and are like, ‘This is our final offer.’”

Jacksonville has several US Navy installations, and many military members are covered through TRICARE. But Panama Pharmacy recently had to opt out of TRICARE due to the unsustainable reimbursement rates issued by PBMs, Duane said. 

“We had to make the tough decision of not taking it,” he said. “And the decline in reimbursement during COVID the past two years saw a lot of supply chain disruption for drugs. A lot of drugs are manufactured overseas, but the insurance companies are not too keen to update their pricing to reflect market dynamics. 

So drugs would stop shipping, but the insurance companies would not catch up, so we would be getting paid a 2021 price for a drug in 2022, and that’s a big problem. We’ve had to turn away, deny, and get out of certain contracts because the business would be untenable. And it’s difficult to tell patients their plan isn’t covered anymore.”

Duane said some of his own employees cannot purchase their drugs at Panama Pharmacy due to conflicting insurance.

“The insurance for my workers doesn’t allow me to fill certain prescriptions at my own pharmacy, so my employees can’t even get certain prescriptions at the pharmacy they work at,” he said. 

It is hard for independent pharmacies to remain in business under these circumstances. They cannot compete with corporate conglomerates, as 80% of the PBM market is controlled by three companies: CVS/Caremark, Express Scripts, and OptumRx.

“One out of every two prescriptions are paid for and dispensed by CVS,” Duane said. “No one can hope to compete with that. We do not have leverage. Even Publix testified [in support of PBM regulation]. There’s a lot bigger fish than me saying these things.”

Duane has seen several Florida pharmacies close due to these circumstances.

“Those in rural areas and minority patients will be the most affected because those independent pharmacies will close,” he said. “I know people in Jacksonville that closed, and they were in business much longer than we have been.”

The Pharmaceutical Care Management Association (PCMA), a lobbyist representing PBMs, states that the number of independent pharmacies is stable, however. The PCMA’s 2022 digest report stated that the number of independent pharmacies in the US increased by 0.4% in 2021. PCMA also recently implemented the Unlocking an Affordable Future platform to help promote greater competition and support a more sustainable market to lower prescription drug costs.

Duane said legislators did a good job in identifying necessary PBM regulations in SB 1550 and its companion bill, House Bill 1509. SB 1550 was passed by the Senate Committee on Health Policy on March 27th, and is now in the Fiscal Policy Committee. HB 1509 is now in the House Appropriations Committee.

“You can tell they did their homework,” he said. “They knew from stakeholders what needed to be fixed. It doesn’t allow an insurance company to force people to go to a pharmacy that happens to be owned by a PBM. That’s a big deal. It provides leverage on contracts. It aims to justify and level the playing field to allow small businesses to compete.

Florida is basically trying to go to an unchecked market to level the playing field. It’s a great first step. It doesn’t look like they’re trying to reinvent the wheel. Georgia has had protections in place for a while. What I always tell people is the market is the market. If you’re going to underpay pharmacies for drugs, it’s the customer who will pay. They won’t be able to get their drugs because pharmacies can’t stock it at the price they are charging. We want to get made whole.”