Consolidation Brings Pharmacy Deserts To W.Va.

Nationwide, the pharmaceutical industry is undergoing a lot of changes, in part due to the COVID-19 pandemic placing strain on services provided, like vaccinations.

According to a 2021 study by GoodRx, more than 40 percent of counties in the United States are pharmacy deserts, where most people have to drive more than 15 minutes to reach nearby pharmacies.

According to the same study, pharmacy deserts exist in Wirt, Ritchie, Doddrige, Pocahontas and Pendleton Counties in West Virginia.

Pharmacies stepped up by offering vaccinations in West Virginia, helping the state lead the nation in early vaccination rates for COVID-19. Now, pharmacies are finding it hard to employ staff to keep stores open.

Reimbursement with pharmacies is a real problem, according to Krista Capehart, a clinical professor at WVU School of Pharmacy and the secretary of the West Virginia Pharmacy Association.

“Many of our pharmacies right now, when they fill a prescription, they actually lose money on it,” Capehart said. “And so when you cannot even break even, it’s very difficult to keep a pharmacy open, just like any business.”

Pharmacy Benefit Managers (PBM) are the middlemen in the pharmaceutical industry. Health insurance may cover major medical expenses, but a PBM handles the drug benefit.

“And so it’s not anymore that when you process a claim for a prescription, that’s the actual money the pharmacy gets back,” Capehart said. “Months later, the entity will come back and say, ‘You owe us this much money back.’ And so it’s hard for any of these pharmacies to continue to function. And yes, the PBMs play a big role in that. West Virginia has really led the nation I would say in PBM reform, but it’s still very hard to survive in this market.”

Matt Walker is the executive director and registered lobbyist for the West Virginia Independent Pharmacy Association, a 501(C)(3) organization made up of West Virginia-owned and operated independent community pharmacies.

“Over the years, what has happened is these local independent community pharmacies have found it difficult to compete with some of the chain pharmacies,” Walker said. “And there’s several reasons for that.”

Walker said some patients prefer a mail-order pharamacy, but the largest problem for independent pharmacies is PBMs controlling the supply chain.

“What PBMs have become, over the years, instead of only processing pharmacy claims for insurance companies, they’ve really become profit-driven organizations that make a lot of money on every pharmaceutical transaction,” Walker said. “And they’re doing that often to the detriment or at the expense of the pharmacy itself.”

Before prescriptions became integrated with health benefits, consumers would pay for prescriptions in cash, out of pocket. 

“Part of that reason is because of this, the really complex nature of the pharmaceutical drug supply chain, from manufacturers to wholesalers to PBM comes to pharmacies and down into patients finally,” Walker said.

PBMs have been a topic of legislation since the 2017 session. That year, the Pharmacy Integrity Act was signed into law creating a registry for PBMs and protecting pharmacies from audits.

In 2018  Senate Bill 46 eliminated gag clauses, kept pharmacists from educating patients about the cost of medication.

In 2019, Senate Bill 489 required PBMs to be licensed to do business in West Virginia by the Office of the Insurance Commissioner, bringing regulatory oversight to the industry.

In 2020  House Bill 4058 passed, determining a PBM can be fined as much as $10,000 each time they violate the Pharmacy Integrity Act. 

In 2021  House Bill 2263 established the national average drug acquisition cost (NADAC) plus a $10.49 professional dispensing fee as the reimbursement floor for dispensed prescriptions in West Virginia.

Legislation for pharmaceutical reform continued to pass each year until 2022 when House Bill 4112 refined the definition of health care payer to make clear which health plans the Pharmacy Audit Integrity Act applies to.

According to Capehart, the makeup of pharmacies in West Virginia is about half corporate-owned and half independently owned and operated. 

Often, no matter who owns the pharmacy, it is the hub of communities and their loss is felt deeply.

“When that community center of your community pharmacy closes, no matter what that type of center is,” Capehart said. “It really is a health access issue.”

Capehart said even if a pharmacy closes, that does not mean the people in that community stopped needing their medications.

“And what you see is a consolidation of resources,” Capehart said. “And so you put more prescriptions into a single pharmacy. And they just they can’t handle the volume to provide the level of care that was given at other facilities. And every year we see more and more prescriptions written. So it’s not like this issue is going to get better.”

Capehart said payment reform is the first step to improving the pharmaceutical industry.

“You have to have payment reform because if a pharmacy is not able to keep their doors open, that’s going to be first and foremost,” Capehart said.

Innovative solutions through new technology could be a way to bridge the gap in care, but that might not be an effective solution for West Virginia.

“We also know that one of the things about Appalachia and West Virginia is that our patients prefer face to face, one on one care,” Capehart said. “And so how do we do that in the best manner, ensuring that we’re able to keep the doors open and staff available.”

However, to have a well-staffed pharmacy also means paying pharmacists appropriately.

“They have to be reimbursed and paid at a level that’s appropriate,” Capehart said. “But again, that comes back to reimbursement appropriately. And so there’s there’s lots of different ideas that we can work toward. And I think that the pharmacy leaders in the state are really examining those, as well as kind of what’s happening.”

Appalachia Health News is a project of West Virginia Public Broadcasting with support from Charleston Area Medical Center and Marshall Health.