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Pharmacies are shutting down across Kentucky. Here's what's pushing them out

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Posted at 7:00 PM, Jul 10, 2024

WOODFORD COUNTY, Ky. (LEX 18) — Pharmacies are shutting their doors across the country as the cost to operate increases, leaving customers to find alternatives.

Drug stores across the country, both large chains and small, independent ones, are struggling.

Walgreens announced that it plans "significant" closures during a call with analysts at the end of June.

CVS and Rite Aid have also completed mass closures in recent years.

According to the Kentucky Pharmacists Association, more than 80 independent pharmacies have closed across the state in the last two years.

Woodford Family Pharmacy is Versailles, however, is still operating as planned. Pharmacist and operator Paul Mann, however, sees the problems pharmacies are facing firsthand.

"When we're in school, we're trained just like other healthcare providers are to put your patient first. But you have to also remain viable in order to do that," Mann said. "Bluntly put, the PBMs are backing us in a corner in terms of being able to meet the needs of our patients."

Pharmacy benefit managers (PBMs) are in essence, a middleman between health insurers and pharmacies.

A report released this week by the Federal Trade Commission detailed how those PBMs can inflate the prices of drugs at the cost of small pharmacies.

“The report also details how PBMs can squeeze independent pharmacies that many Americans—especially those in rural communities—depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare,” said FTC chair Lina M. Khan.

Mann said the margins continue to get thinner and thinner from their PBM reimbursements, causing concern for him and other pharmacists.

"You can't stay in business if they do that, but they keep squeezing those margins tighter and tighter, all the while they are showing record profits on a yearly basis in the billions of dollars," he said.

With the price of drugs increasing and pharmacies disappearing, some people are choosing extreme measures to save themselves time and money.

The FTC reports roughly 30% of Americans are rationing the medicines or skipping doses.

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"This is health care. This is people's lives we're dealing with," Mann said.

Ben Mudd, executive director of the Kentucky Pharmacists Association, said the problems are not exclusive to just rural or urban areas.

Closing pharmacies could present challenges for people, even in cities.

"I mean, in areas where people don't have cars, you know, you could create a pharmacy desert if there's not a pharmacy within two to three miles of somebody's home," Mudd said.

There is hope for pharmacists like Mann, however.

S.B. 188, which passed in the Kentucky legislature this year, is set to add regulations to PBMs come January.

That law is set to set minimum reimbursement rates for PBMs, which could improve profit margins for pharmacies.

Until then, some patients may be left surprised if their local pharmacy closes and they need to find another option.

"It creates chaos for the patient. You know, it's a dire situation," Mann said.