Small Pharmacies Suffering From Low Insurance Reimbursements

Feb. 14--OTTAWA -- Though customers may not notice a difference, many pharmacies are forced to use a "flawed system" to cover the cost of the prescriptions they offer.

Since most customers pay through insurance, pharmacies don't determine what they pay for a prescription or what they can sell it for.

And insurance companies aren't listening to the rules when it comes to reimbursing pharmacies. Instead, many are circumventing the system or paying less than what the pharmacy paid for the drugs.

At one of Schweitermans Pharmacy's five stores, it loses about $650 a week due to insurance company's not reimbursing it for the full amount, said Mark Dominik, co-owner of the business.

Though the system affects all pharmacies, smaller pharmacies may feel the pinch more.

At the end of 2014, Pack Pharmacy, Lima's last locally owned, independent pharmacy, closed, and it's far from the only recent closure in the state.

The Ohio Pharmacists Association, an association representing both corporate and independent pharmacies, reports that about 525 independent pharmacies exist in the state today, whereas about 1,200 were in operation 15 years ago.

"I am aware of several independents closing over the last few months," said Antonio Ciaccia, Director of Government & Public Affairs, at OPA, in an email.

Roy Klass, owner of Tucker's Pharmacy in Ottawa, worries about closing, too.

"I hope we're going to be able to hang around, but time will tell," he said.

He's seen other locally-owned pharmacies close and said a recent law, meant to help pharmacies, hasn't made anything better.

House Bill 64, passed in 2015, was supposed to reform the way the insurance companies reimbursed pharmacies, but Dominik said it actually hurt his pharmacies.

That's because, as patients having insurance has become more prevalent over time, the insurance companies got more power over the pharmacies and how much of the cost of the medicine they would cover.

"Patients are all coming in with insurance, and pharmacies sacrifice power in the marketplace to (Pharmacy Benefit Managers)," Ciaccia said. "Pharmacy's entire ability of getting reimbursed is through that PBM."

The PBM, a "middle man" between the pharmacy and insurance company, is supposed to make up the difference between a patient's copay and the cost of the prescription, Ciaccia said.

House Bill 64 set a parameter PBMs had to go by when reimbursing, but some are just starting to use a different pricing system, making it impossible for pharmacies to know what they're going to get.

The Ohio Department of Insurance, which would handle complaints against insurance companies, said in an email that it had received complaints and is processing them.

Dominik said Schweitermans has filed 50 to 60 claims per week with insurance companies recently, disputing the different systems they use. They get no response other than that Schweiterman's "signed up for it" with a contract it signed.

Schweiterman's Pharmacies can't rely on selling pharmaceuticals to make a profit anymore. Instead, it uses other services to support its business, Dominik said.

Tucker's Pharmacy is "losing money on a lot of stuff," Klass said.

He even sometimes has to recommend his customers go somewhere else to get drugs he can no longer afford to stock.

"We spend a lot more time looking at what insurance is paying us," Klass said. "It's harder to make a profit each year, it seems."

Schweitermans just loses money on those prescriptions, as Dominik said it can't stop carrying drugs.

"We want to help our patients," he said. "There are certain medications we just lose a large amount of money on. It's hard to determine what to do."

Dominik is hoping the bill will be reformed.

"(Pharmacies) must be at least reimbursed for your cost of the medication," he said.

Reach Danae King at 567-242-0511 or on Twitter @DanaeKing.

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