BUFFALO, NY (WKBW) — According to the New York State Worker Adjustment and Retraining Notification (WARN) dashboard, dozens of Rite Aid stores in Western New York were slated to close their doors beginning on June 4.
As the stores close, independent pharmacists are raising the alarm bell against pharmacy benefit managers (PBMs), saying they're the problem with the fall of the chain pharmacy business.
“Western New York is in a blazing inferno right now," said Jamie Latko, owner of Niagara Apothecary. "Pharmaceutical health care is in complete crisis, and patients are going to get hurt."
The independent pharmacy owners gathered outside Rite Aid on Niagara Street in the City of Buffalo on Friday. It's one of nearly 70 local rite aids set to close.
The pharmacists say PBMs are to blame. They are the middlemen between pharmaceutical companies, insurers, and pharmacies that process claims, which the local pharmacists said take 60 percent of the pharmaceutical dollar.
“These PBMs often pay pharmacies the Walmart cost, they pay us $900 instead of $1,000," sadi Stephen Giroux, pharmacist, president & CEO, Middleport Family Health Center. "It's ridiculous, and no business can sustain on a margin like that."
“Rite Aid tried really hard to keep the lights on," said Don Arthur, pharmacist & owner, Brighton Eggert Pharmacy. "Unfortunately, when you're being reimbursed for brand name pharmaceuticals that can cost, on average of $700 a month below your cost, you just can't keep the lights on."
There are three major PBMs, CVS Caremark, Express Scripts and OptumRx.
CVS Caremark issued the following statement:
“CVS Health is dedicated to supporting New York, and we proudly employ more than 18,000 New Yorkers and provide $5.5 billion economic benefit to the state each year.
While we can’t speculate on how other PBMs may interact with pharmacies, CVS Caremark relies on Western New York independent pharmacies to meet access requirements for consumers, including CMS rules for Medicare Part D beneficiaries. To help us meet these requirements, we reimburse New York independent pharmacies on average 44% higher than we do our own CVS Pharmacies in the state.
We understand there are headwinds for many retail establishments, whether inside or outside healthcare. But we remain committed to providing broad pharmacy access and affordability to the region.”
The Pharmaceutical Care Management Association, which represents PBMs, issued the following statement:
"New York has more independent pharmacies than any other state in the country. Independent pharmacies in New York account for over 65 percent of the entire pharmacy market and between 2015 and 2025, the number of independent pharmacies grew from 2,579 to 3,135, a 21.6 percent increase. In addition, the average prescription gross profit margin for independent pharmacies was over 20 percent.
Independent pharmacies often point the finger at PBMs instead of acknowledging that there are many factors that influence closures, including customer preferences for online options and changing demographics. PBMs recognize that pharmacies provide access for patients to get drugs, so it makes no sense to blame PBMs for pharmacy closures in New York.
To be clear, PBMs aren't trying to put pharmacies out of business, in fact, PBMs are supporting community pharmacies in New York through programs that increase reimbursement and advocating to allow them to expand the additional clinical services they can offer."
The local pharmacists are begging state lawmakers to approve a new bill that would require PBMs to reimburse pharmacies at fairer rates.
"We're virtually within walking distance of the center of the city, but we are in a desert," said Brad Arthur, pharmacist & owner, Black Rock Pharmacy. "We're in a health care desert. We're in a pharmacy desert."
The group is asking the legislature, which is down to its final few days in session, to pass the Patient Access to Pharmacy Protection Act in Albany.
“It's a bipartisan piece of legislation. We're hoping that it gets through,” Giroux said.
The Black Rock pharmacist also warned that medications are the most cost-effective treatment for those who rely on weight loss medications, diabetes drugs and patients on blood thinners.
“Keeping people out of the hospital is critical, so my fear is, what happens next?" Arthur said. "I fear that 25 to 30% of all of a sudden begins to explode, because people are home, and if this was their only choice for a pharmacy, they may not opt to get much-needed prescription drugs, and then they end up the street in the hospital. It’s catastrophic.”
The pharmacist was specially calling out State Senator Sean Ryan to support the bill.
A spokesman for Ryan’s office told me that if the bill comes to the Senate floor, Ryan will vote for it.
Now, as local Rite Aids are closing, these pharmacists are being bombarded with prescription requests.
"And we would all love to fill every prescription, but we are going to be the next ones to close our doors,” Latko said.
A long-time Niagara Street Rite Aid customer is now forced to find a new pharmacy.
“It’s disgusting," Dayna Banka-Sloan said. "It's absolutely disgusting. So many of us in the neighborhood rely on this store.”
The independent pharmacists said this is an unnecessary situation and that there is enough money out there to pay for prescription drugs.
