Independent pharmacies pinched by preferred provider networks
- on January 4, 2013
Preferred provider networks can help seniors save money on their prescription drugs.
If a senior’s Medicare Part D plan includes a network of preferred providers and if they have their prescriptions filled at one of the participating pharmacies, they get a discount. That’s how the networks work.
But most of the participating pharmacies are large, corporate owned stores in towns large enough to have a Walmart, and owners of smaller, independent pharmacies say the chains' Medicare arrangements are hurting their businesses.
Charles Bankes, a pharmacist and owner of Bankes Drug in Abilene, said he doesn’t have much use for the networks.
Unlevel playing field
“They’re what’s going to drive independent pharmacies out of business,” said Charles Bankes, a pharmacist and owner of Bankes Drug in Abilene. The Medicare plans are "essentially telling everybody that it’s in their best interest to go to one of the big chain stores. The playing field isn’t level anymore."
Bankes said he was especially upset to learn that AARP’s new Medicare Part D plan, which takes effect on Jan. 1, includes a preferred network.
“They don’t come out and say you have to go to Walmart,” he said. “They just say it’ll cost you less if you go to Walmart or Walgreens or wherever.”
Bankes said he would continue filling his AARP customers’ prescriptions, but he’s not in a position to match the chain stores’ discounts.
“We’ve been cut out of the process,” he said, referring to small-town, independent pharmacies like his.
Chellie Ortiz, vice president of operations for the Kansas Independent Pharmacy Services Corp., said there are some independent pharmacies in the preferred networks. But most never get the chance.
'Totally shut out'
“We can’t make a blanket statement that applies to every single network that’s out there, but the large majority of independent pharmacies that we see are not even being invited or given the opportunity to participate," she said. “It’s not that independent pharmacies are saying, ‘No, we can’t meet those (discount) rates,’ it’s that they’re totally being shut out and not being provided opportunity to participate. There may be some that are saying they can’t or they won’t meet the rate, but they’re not the majority.”
Initially, a handful of Medicare Part D plans – Humana, most notably – offered preferred networks. Now, the networks are in most of the 30 plans being marketed in Kansas. The networks’ discounts vary from plan to plan.
“Last year is when they really took off,” said Brian Caswell, a pharmacist with Wolkar Drug in Baxter Springs. “It’s all based on the assumption that if you take your prescriptions to one of the big-box stores, you’ll end up spending a bunch of money on something else while you’re there. It’s to get you in the door. The chains can afford to do that. A lot of the independents can’t.”
AARP’s Medicare Part D plan is managed by UnitedHealthcare, one of the nation’s largest health insurers.
Saving members money
Sarah Bearce, a spokesperson for the company, defended that network in an email to KHI News Service.
“UnitedHealthcare is committed to developing new and innovative ways to improve health outcomes and save our members money," she said.
“Our preferred pharmacy network will help us accomplish this in 2013 by providing our members with access to a large number of pharmacies where they can choose to save money on their prescription drugs,” Bearce wrote. “We intend to continue working with retailers and pharmacies - including those that are not currently part of our preferred pharmacy network - to bring additional savings to our members.”