So, easy questions to start.
Just tell me a little bit about yourself as pharmacist and the owner of this business.
Yeah, thanks for letting me be here today.
I'm Nicole Shreiner.
I am a pharmacist for over 25 years, and I am the current owner and CEO of Strew's Pharmacy
in Green Bay, Wisconsin.
And how long has Strew's been around?
Strew's has been serving their community for over 70 years, and it's been kind of passed
down through different families and generations, and now embarking on a new generation with
me and another business partner as we move into this part of, you know, the 2025.
So tell me a little bit about what you personally like the most about being an independent pharmacist.
The part that I really enjoy is really making a difference in patients' healthcare decisions
and helping them navigate some of those decisions, helping them be compliant with medications,
and just being a part of the total healthcare team.
I've described to some of my staff and colleagues that patients, that medicine has become very
specialized, patients might have a neurologist, a cardiologist, a behavioral health physician,
and a primary care provider, and I feel like sometimes I talk about them being tiles on
the wall, and I feel like pharmacy is that groat that holds it all together and keeps
it all from falling off the wall.
Because we're the ones who are kind of doing a lot of that communication back and forth
between the providers and the patients because we see them on a regular basis.
So very broadly, what are some of the biggest issues facing local independent pharmacies today?
The broad answer to that is the reimbursement that we're getting from PBMs or pharmacy
benefit managers has made it a very challenging environment to be able to properly staff and
be a viable business in the community.
And tell me a little bit more about reimbursements.
Sure, so I've got to give you just a little bit more history from my perspective at least
on pharmacy benefit managers or PBMs in that they existed, they did exactly what they
were called to do, or what their name and means, is they managed the pharmacy or the
medication portion of a patient's health plan.
And they were looking to control costs by deciding on formulary, negotiating prices
with drug companies that made them.
It was very competitive when they first came out in the 60s and 70s, at their peak I think
they were well over 50 different PBMs that existed.
Now currently there are three PBMs that control 89% of the lives in the United States.
So it's become very powerful and independent pharmacies like myself have no negotiating
power anymore with these PBMs.
And so the contracts have become basically take it or leave it, they've continued to
erode year after year after year, and it's estimated that independent pharmacies depending
on your particular location in the country can have anywhere from 20% to 40% of their
claims are actually reimbursed below cost.
And so what is the end product of that then?
Meaning what are the consequences of that?
Yeah, the consequences are well one, NCPA estimates that one independent pharmacy closes
every single day.
So one, just the feasibility of having an independent pharmacy is becoming very challenging.
Pharmacies that are doing are hanging in there or trying to weather the storm are having
to cut staffing and resources, less able to do some of the wonderful services that we
do such as device training, coaching on chronic disease state management, whether that
be diabetes, high blood pressure, other types of interventions.
We offer things like delivery service and medication packaging to help people be more
compliant with their medications.
It's endangering those services that pharmacies provide oftentimes at no charge to patients.
Are independent pharmacies very different from chain pharmacies?
I believe so, which is why I chose to become an independent pharmacist.
I believe that we are able to offer a personalized service.
We pride ourselves oftentimes don't even like to use the word retail because I don't want
to be associated with the product or just the dispensing of the medication.
I want to be a member of the patient's health care team and I want to be an essential part
of that health care team in helping patients understand their medications and being compliant
with their medications.
So I believe because we are independent and answer mostly to ourselves, we have the ability
to be nimble and change more quickly and adapt to the needs of the patients on a regular
basis.
So talking a little bit more specifically about some of what is in this piece of legislation,
it covers a lot of different things.
There are some things that are very specific to pharmacies.
So one of them is reimbursements.
What would it do?
So a couple things with the reimbursement.
One is it would address that there would be a minimum requirement for a dispensing fee.
So right now dispensing fees can be 50 cents under a dollar and that's supposed to cover
your label, your bottle, your labor, all of the other things for your fixed cost and we
all know that 50 cents to a dollar doesn't go anywhere near, especially when we're not
even getting the ingredient cost to cover the cost of the medication itself.
So it would have a minimum dispensing fee associated with that.
In addition, it would, that bill also would allow patients to allow the manufacturers
that have copay cards that would allow patients to utilize those and allow those to go towards
their deductible.
The bill also in terms of reimbursement would allow me to deny service or to say to patients
that this particular product is not, is reimbursing under my cost of my, my purchase price of
the medication.
Right now I have to treat a patient as a whole, meaning that if I, I have that patient's entire
medication profile at my pharmacy and I'm losing money, I can't just say I'm not going
to dispense this medication.
So I have a couple examples.
One is a class of medications that is being commonly used to treat diabetes called GLP
ones.
Those, some pharmacies are just choosing not to carry them because they get reimbursed
below their cost and they can't say that I'm not going to dispense just that one medication,
so they just don't carry them because they can't afford to.
And I had an example this last year with patients that I had one patient, I added up all of
her medications, she had 10 or 11 medications, and I ended up owing the PBM over $50 at the
end of them each month because I was taking losses when you totaled up all of her prescription
reimbursement, my margins on all of her meds.
So it's just not a feasible model for independent pharmacy to continue to operate.
Does that leave the patient in a difficult position if, if their medications are so expensive
that pharmacies might not want to dispense to them?
Absolutely, it's creating an access issue for patients whether or not the pharmacies
choose not to carry them because of the losses that they're taking, where's that patient
going to go?
The pharmacies going out of business is creating shortages for patients in particular areas.
We oftentimes talk about in rural areas, patients having to travel perhaps 20 miles to find
a pharmacy that would be able to provide their medications.
We're having that even in urban city areas where patients who don't have access to transportation
other than public transportation having difficulties finding a pharmacy that's going to be able
to serve them, take their insurance.
Some pharmacies are choosing not to carry particular plans because of the poor reimbursement.
For instance, our pharmacy did an analysis of our major payers and we decided not to
sign contracts with two of the major PBMs in our area and that was just because of the
poor margin that we were taking.
We tried to renegotiate those contracts and we basically got a reply that was, this is
what we have to offer and at this time we are not adjusting any of our contracts.
So it's take it or leave it, you get what you get and that unfortunately is we have
no power to negotiate anything better.
We spoke a little bit about Colchmitt and how there was a service that he didn't get
that his father got from a local pharmacy.
Can you describe what you think is the benefit of this legislation and not speaking to Colch
specifically but in general that it would provide for patients?
So in general I believe every pharmacist wants to do what's right by their patient and unfortunately
sometimes metrics and being able to stay afloat makes you make choices that you wouldn't otherwise
make in a place of freedom.
And so this bill would first of all allow us to have proper reimbursement that would
hopefully allow them to have an adequate amount of labor that when you get these confusing
rejections or even a paid claim when we run them through the computer system but higher
co-pays sometimes those require a degree of research you know as the patient deductible
is just no longer the preferred product.
What is the preferred product?
Do we need to get a therapeutic interchange or an alternative product for that patient?
That is all very time consuming and not reimbursed and so if you're not even making a reasonable
margin on your product that you are able to dispense it certainly doesn't allow for time
to be able to do these above and beyond the routine.
With the systems being so complicated how likely is it that we can be proper consumers
if we're not experts in all this stuff?
Yeah that's a good question.
I think what we're trying to make people aware actually just one of my recent meetings someone
asked the question at a pharmacy meeting what tells you that something is changing
in the world of community pharmacy and I said that more people actually even know what
a PBM is so I think we're trying to educate.
I think patients oftentimes think that because the medication is costly that the pharmacy
is the one that is pocketing that money and it's just it's not the case as we gave the
statistics of every all these pharmacies closing across the nation other pharmacies filing
bankruptcy we know that it's it's not the in the pharmacies model that is making all
of the money and yet we see PBMs becoming in the top fortune 50 companies in the United
States and they're doing it because they have the power to be able to do this now because
of the amount of lives that they control with the top three PBMs.
I don't think we covered it here yet can you share again the chain pharmacies that yeah
I don't have the exact numbers but it's public information Walgreens made an announcement
I believe they're closing over 2000 stores nationwide and which I believe they had just
over 8,000 so it's coming close to a quarter of their stores nationwide are closing right
eight I believe it was earlier this week just filed bankruptcy so it's very difficult if
these change that have thousands of stores can't make it go because they lack the power
to negotiate with these PBMs it's very concerning how someone like me who owns one location is
going to have any negotiating power why can't manufacturers who to some degree are probably
also frustrated with PBMs and pharmacies circumvent PBMs oh that's a convoluted story so we haven't
even talked about wholesalers and buying groups which are all also part of that very few products
are purchased directly between a pharmacy in a pharmaceutical manufacturer they have to go
through this whole chain of which I believe there's a lot of waste in there we have wholesalers who
are also on the fortune 500 company on the fortune 500 list and then you have a buying group which
everybody has to take their little piece of the pie as well as the pharmacy benefit managers so
I you know sometimes if we could be able to purchase these drugs more directly from manufacturers or
get rebates from them I you know I'm not going to say that manufacturers are innocent in this
whole thing either some of their products are quite costly but also the United States is in
their defense one of the highest innovators in research and development in the world and so
that's part of you have to pay for a lot of medications that don't make it to market
and a lot of that goes to that and I believe as we did briefly mention with like the copay cards
from manufacturers they tried in my opinion to make baby steps towards trying to help patients
be able to afford their medications with these patient assistance cards and then PBMs took it as
a way to say well then they can't apply towards your deductible and so it took that baby step
away from the manufacturer even trying to help the patient to make that happen. Can you briefly
describe how vertical integration is something that also ends up harming local source? Yeah so that's
been a challenge to vertical integration meaning that sometimes health plans own their own PBM
sometimes PBMs own their own pharmacy and so they restrict or require patients if they're on
that particular health plan to utilize their pharmacies or utilize their PBM so just for example like
CVS Caremark is a is a PBM and they prefer patients to use their pharmacies or CVS
so that becomes very challenging because either patients are restricted and not able to use an
independent pharmacy or if they their plan allows them to use an independent pharmacy
they may be paying higher cole pays so that's just one example of vertical and vertical integration
Optum in United Health is another example of vertical integration so it just becomes more
challenging because the power then becomes even bigger and again doesn't allow us to have that
negotiating power and the ability to compete. Does Felskowski's bill address that? It does not
as far as I know it does not address any vertical integration however air can saw just past PBM
reform in their state I believe at the beginning of the month that does not allow any PBM to operate
a pharmacy within their state if they have financial. Okay so I thought that maybe the network's piece
then it would it wouldn't make it inappropriate to have or illegal to have vertical integration
but it would allow access so I apologize for not understanding the question appropriately.
Yes the bill does allow patients to have freedom of choice so they would not be required to use
either a mail order or a chain pharmacy or any one particular pharmacy it would be any willing
provider would have the ability to be able to provide care for that patient.
Anything about
other fees like claim processing performance based network participation, accreditation
are those things that are also any of particular pain for pharmacies or is it death by a thousand
cuts? Exactly it is because there we do pay a switch fee meaning so because we send the claim
through electronically through the computer every time you process the prescription the PBM and the
switch all take a fee out of those they're small but when you're talking about processing
potentially 30,000 claims in a year or in a month that adds up very quickly and so you're losing
another portion of that reimbursement for those fees that are paid. In addition there what used
to be what was called DIR fees that were meant to help pharmacies be higher performing pharmacies
making sure patients were compliant if they had certain disease states that they were on
certain medications and that they were taking them appropriately and what would be these fees would
then be assessed to us retrospectively meaning that I might not get that fee taken back so I would
get paid a certain amount today and then that fee would be taken back two to three months later
in what was called a DIR fee well we were able to get not that DIR fees went away but the fees went
to being assessed at the time of the claim however with even certain PBM's they take a chunk whether
that be 10% 11% 8% they take a percentage of that claim and even if you are a great performing
pharmacy your chance of earning something back is is 1% so those are other fees that again get
assessed some people call them pay-to-play it's basically you have your contract and then you also
have these additional fees that go above and beyond on those contracts.