Cash crunch pushes independents to the brink, data shows

NCPA February 27, 2024

Nearly one third of independent pharmacy owners may close their stores this year under pressure from plunging prescription reimbursements by big insurance plans and their pharmacy benefit managers, NCPA has found based on survey responses from members around the country.

According to the survey, 32 percent of all respondents say they are considering closing their doors this year because of the cash crunch. More than 92 percent say they may drop out of Medicare Part D, which would decimate patient access across the country, especially for senior citizens. More than half of all respondents say Medicare Part D prescriptions account for at least 40 percent of their business. “This is an emergency,” says NCPA CEO Douglas Hoey. “And if Congress fails to act again, thousands of local pharmacies could be closed within months and millions of patients could be stranded without a pharmacy.”

NCPA sent a letter to CMS yesterday outlining the problem: “In 2023, there were over 300 independent pharmacy net closures — almost one less pharmacy open for patients a day — and there are approximately 2,200 fewer retail pharmacies than there were four years ago," NCPA’s letter stated. “Increased vertical and horizontal consolidation of PBMs and health plans has caused severe inequities to pharmacies and Medicare Part D beneficiaries alike. These are startling developments. Action is needed to ensure independent pharmacies can continue to serve their patients." Key congressional leaders received a copy of this letter as well.

Pharmacy owners are doing everything they can to avoid closing their doors. Forty-two percent got a line of credit to get them through the transition. Nearly 60 percent have had to use it. Many are cutting hours, reducing staff, and eliminating services. Nearly 70 percent, according to the survey, have had to dip into their personal savings.

To combat this and other disparities that plague independents, NCPA is calling on all members to join the fight to keep doors open — for the sake of patients and business, alike. Community pharmacists have answered our calls to action and sent over 10,000 messages to Congress since January. Yet PBM reform hangs by a thread. Call and email your legislators TODAY and tell them inaction is unacceptable. We need PBM reform NOW!

Congress continues to negotiate the funding package, and legislators need to understand the urgent need to address PBMs. They cannot delay acting! Several NCPA priorities have advanced through the committee process in at least one chamber, and one has even passed the full House of Representatives. Congress must not miss this opportunity to pass meaningful PBM reform provisions that can be signed into law.

Tell your legislators to support the following priorities:

  • S. 2973, the Modernizing and Ensuring PBM Accountability (MEPA) Act (passed 26-1 out of the Senate Finance Committee)/H.R. 5378, the Lower Costs, More Transparency Act (passed the House of Representatives on an overwhelming bipartisan vote of 320-71)
    • Bans spread pricing in Medicaid managed care by requiring a fair and transparent reimbursement to pharmacies and saves over $1 billion!

  • S. 3430, the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act (unanimously passed the Senate Finance Committee)

    • Includes the No PBMs Act which requires CMS to define reasonable and relevant contract terms in Medicare.

  • S. 127, the Pharmacy Benefit Manager Transparency Act (passed 18-9 out of the Senate Commerce Committee)

You can also engage your patients in the fight by displaying this flyer and QR code in your pharmacy so they can send their own messages to Congress to demand PBM reforms now, or you can share this link with them.