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Pharmacy closures threaten health care

Pharmacy closures have affected customers across the state, including Southern Oregon. Changes in the way pharmacies get reimbursed for medications from insurance companies are part of the reason, and action by Congress and the Oregon Legislature may be needed to address the problem.

Oregon has lost 41 pharmacies since 2016, leaving 761, according to state figures. That may not sound like a crisis, but 60% of Oregon counties have fewer than two pharmacies per 10,000 population, and two rural Eastern Oregon counties have no pharmacies at all.

Last fall, the regional membership discount chain Bi-Mart announced it was closing 56 in-store pharmacies, 37 of them in Oregon. In a letter to members, the company cited rising medication costs and shrinking insurance reimbursements, fees from pharmacy benefit managers and the Oregon Corporate Activity Tax, which taxes pharmacies on receipts rather than profits. The letter said keeping its pharmacies open would have threatened the continued existence of the 80-store retailer.

Bi-Mart’s prescription files were transferred to Walgreen’s or other pharmacies, so customers were not left without pharmacy services. But some other pharmacies closed temporarily or reduced hours, leading to long lines and frustration for patients. All pharmacies are having trouble filling staff vacancies, adding to the squeeze.

A key factor in pharmacy closures and cutbacks, according to pharmacy groups, is the role of companies called pharmaceutical benefit managers (PBMs,) which act as middlemen between private insurance and Medicare plans and pharmacists. Fees they charge pharmacies, and complex rules about reimbursement levels, affect pharmacies’ bottom lines and drive up their costs.

Mail-order prescriptions can be an option for patients who take the same medication over a long period of time, but that’s not a replacement for a local pharmacy, where patients can discuss their medications face to face with licensed professionals who advise them on drug interactions, side effects and more. In addition, local pharmacies have become providers of COVID-19 tests and vaccines during the pandemic.

After Bi-Mart’s announcement, Oregon Sen. Ron Wyden, chairman of the Senate Finance Committee, sent a letter to the administrator of the Centers for Medicare and Medicaid Services, the federal agency that administers those programs. He noted that the agency’s own report to Congress in June said Medicare Part D plans and PBMs increased fees to pharmacies by 91,500% over 10 years — that’s not a misprint — and the fees doubled from 2018 to 2020.

Wyden called on the CMS to conduct a formal review of pharmacy closures in the past five years and regulate fees and pricing.

That should happen at a minimum. In addition, the Oregon Legislature should consider exempting pharmacies from the Corporate Activity Tax or limiting it as a way to help pharmacies continue to provide vital health care to Oregonians.