Insurance companies likely will determine pharmacy

With all the changes brought about by the Affordable Health Care Act, do I have more choices when it comes to filling prescriptions? Is it easier or harder to change locations because of the new law?

— Vic J., via email

For all the winds of change blown out of Washington, D.C., in recent times, prescriptions are largely unscathed, we here at SYA world headquarters are told. The world of prescriptions was given a hefty spin years ago.

What will change, however, is the Medicare and Medicaid reimbursements to pharmacies.

Where you buy your meds more likely will be determined by the insurance policy you pick, Tim Lichlyter, owner of Black Oak Pharmacy in Medford tells us. Customers will pay the same rates no matter if prescriptions are filled at Walmart, Walgreens or a local pharmacy.

"The individual insurance company will dictate that," Lichlyter said.

Most drug stores contract with a third-party pharmacy benefit management company, known as PBMs in the trade. Those PBMs often encourage mail-order buying because it produces higher profits than brick-and-mortar operations.

"They can negotiate better pricing on the medications," Lichlyter said. "It's not that it's more convenient for the patient or anything like that."

The cost to hospitals will be lower from the manufacturer, he said.

"Even though the volume isn't that big, if you started on a medication at the hospital, you are going to probably stay on that medication," Lichlyter said. "So it's a benefit to the manufacturer to give hospitals price breaks."

Volume of trade predictably lowers the price point for greater amount of sales.

"Pharmacies contract with the PBMs and if I'm a Walgreens or Walmart, I can say I have this many stores across your service area, so I want a little bit higher reimbursement rate," he said. "They only have to write one check or make a distribution to one bank for all of these locations."

Send questions to "Since You Asked," Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by email to We're sorry, but the volume of questions received prevents us from answering all of them.

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