Rural Oregonians have long counted on local pharmacies deeply rooted in their communities for quality service.
But those community mainstays now face a growing threat from an unfair practice by big insurance companies and pharmaceutical benefit managers — PBMs — that’s threatening the pharmacies’ ability to stay open.
And that threat in turn undermines rural Oregonians’ access to prescription drugs, patient education, management of chronic disease, preventative care and life-saving vaccines.
In recent weeks, the fallout from the announcement by Bi-Mart that it’s begun closing 37 pharmacies in our state — in part because of that unfair practice — has cast troubling ripples throughout Eastern and Central Oregon.
News reports have detailed how Umatilla County Public Health has raised concerns about diminished capacity to offer COVID-19 vaccination clinics with fewer local pharmacies; Baker County health officials referring to a local “pharmacy health crisis” with longer wait times to get prescriptions filled at remaining pharmacies and a lack of critical infrastructure for people seeking flu shots and COVID-19 boosters: and longer wait times as well in Central Oregon with Bi-Mart closing its pharmacy services in Sisters. And I heard similar problems firsthand last week from pharmacies in Ashland and Corvallis.
This is not a minor inconvenience in rural Oregon when families and seniors must drive longer distances for prescriptions and other pharmacy services, especially over snow- and ice-covered roads in the upcoming winter months.
Here’s what’s going on, and what I’m doing as chair of the Senate Finance Committee to get relief for rural Oregonians who deserve reliable and accessible pharmacies in their communities.
Goliaths such as Big Insurance and the PBMs put the squeeze on small pharmacies by charging them something called a DIR fee. That stands for direct and indirect remuneration fees, and PBMs demand that pharmacies pay up, or they’ll take their business elsewhere
To be sure, DIR fees are not likely to come up in conversation around too many dinner tables this Thanksgiving. But they’re a big deal because they skyrocketed 91,500% from 2010-19, and doubled from 2018-20. They contributed to the permanent closure of 2,200 pharmacies nationwide between December 2017 and December 2020.
Why do PBMs charge these fees? In short, because they can. This disturbing development should sound loud alarm bells, because PBMs can use mechanisms like DIR fees deliberately, to starve independent pharmacies of revenue. When these stores close, large chain pharmacies owned by the same plans and PBMs that forced them to pay up, reap the benefits. These fees are unfair and they’re anti-free enterprise.
I’ve asked the Center for Medicare and Medicaid Services to use its existing legal authority to propose and finalize rules that make it impossible for PBMs to use DIR fees to force community pharmacies to close their doors.
In my recent letter to CMS Administrator Chiquita Brooks-Lasure, I noted that Bi-Mart’s announcement of the 37 pharmacy closures in Oregon and 19 others in the Northwest cited “increasing costs and ongoing reimbursement pressure.”
I wrote, “These fees do nothing to lower the amount Medicare beneficiaries must pay for their drugs each time they fill a prescription and seemingly serve only to pad plan and PBM profits.”
Bottom line: The use of DIR fees is unfair and unjustly enriches big insurers and PBMs.
For the benefit of Oregonians in small communities throughout our state, I’m all in to preserve their lifelines to local Oregon pharmacies and knock these “Goliaths” down by a peg or two so that local rural pharmacies can continue to stay open.