PACIFIC, Mo. – When we interviewed independent pharmacist Jerry Callahan in 2019, he asked us to hide his identity for fear of retribution. Four years later, Callahan is revealing who he is and what he knows to expose how pharmacy benefit managers (PBMs) are harming healthcare.
“Desperation. I’ve got pharmacies and not just me, there’s other pharmacies out there,” he said. “They’re going to close. This has got to change.”
Callahan owns five independent pharmacies in Missouri, and recently served as president of the Missouri Pharmacy Association.
“You’ve got three PBMs that control 75-80% of the market. They’re just doing take-it-or-leave-it contracts and not giving pharmacies a chance to negotiate with them,” Callahan said.
Pharmacy benefit managers are hired by insurance companies to manage drug plans. The PBMs negotiate with drug manufacturers and decide the drugs each plan will cover. In turn, the drugmakers give PBMs rebates, which they pass along to insurers, which can lead to lower premiums for consumers. But Callahan says it’s a flawed system.
“Why do you think the pharmacists in Kansas City at CVS walked out? It’s because they don’t have enough help because the reimbursements getting terrible,” he said.
Our sister station in Kansas City interviewed a CVS customer in late September who watched as his pharmacy shut down midday.
“Those chains are not making what they used to, so they’re cutting labor, so they can keep their stock prices up,” Callahan said. “We, as independent pharmacists though, are trying to keep our doors open.”
And should more of those doors close as is expected, Callahan says patients in smaller, rural communities will get hurt the most.
“We deliver to a lot of our patients. If we’re not around to do that, where are they going to go?” he said. “Some of these people are seniors who don’t have the capability of getting out. They’re relying on us.”
FOX 2 contacted Express Scripts and the Pharmaceutical Care Management Association, a trade group for PBMs. We’ve not yet heard back from them, but Express Scripts pointed us to an initiative it launched earlier this year to increase reimbursement rates for rural independent pharmacies. The company also recently named a new Head of Independent Pharmacy Affairs.