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Wyden urges federal Medicare agency to review pharmacy closures in wake of Bi-Mart move

Bi-Mart

Senator cites 'remuneration fees' imposed by Medicare Part D plans, pharmacy benefit managers

WASHINGTON (KTVZ) -- Citing the recent announcement by Bi-Mart that it’s begun closing 56 pharmacies in Oregon and the Northwest,  Sen. Ron Wyden, D-Ore., this week urged the federal Centers for Medicare and Medicaid Services (CMS) to review pharmacy closures nationwide in the last five years, with a focus on how fees imposed by Medicare Part D plans and middlemen known as pharmacy benefit managers are driving those closures -- many of which are in rural communities.

Wyden noted in his letter to CMS Administrator Chiquita Brooks-Lasure that Bi-Mart cited “increasing costs and ongoing reimbursement pressure” in its announcement of the pharmacies closing, 37 of which are in Oregon.

Bi-Mart announced late last month that Walgreens would acquire its pharmacy business.

“I write with deep concerns about these closures, which reports indicate are caused by the negative financial impact of direct and indirect remuneration (DIR) fees imposed by Part D plans and pharmacy benefit managers (PBMs) on local pharmacies in Oregon and other states,” wrote Wyden, chair of the Senate Finance Committee. 

“Pharmacies across Oregon report that these fees exert significant financial strain and impede their ability to deliver critical services.  These fees do nothing to lower the amount Medicare beneficiaries must pay for their drugs each time they fill a prescription and seemingly serve only to pad plan and PBM profits.”

He wrote that CMS reported in June to Congress that Part D plans and PBMs increased pharmacy DIR fees by an astounding 91,500 percent from 2010 to 2019, and that fees doubled from 2018 to 2020. 

“I am deeply concerned that the rise of these fees has contributed to the permanent closure of 2,200 pharmacies nationwide between December 2017 and December 2020,” Wyden wrote. “Meanwhile, middlemen like Part D plans and PBMs continue to generate exceedingly high profits under the Medicare program—PBMs collectively generated annual revenue of $449 billion in 2020—using such forced post-point-of-sale price concessions and shifting costs onto beneficiaries and taxpayers.”

Wyden said these troubling trends raise alarm bells, because mechanisms like pharmacy DIR fees can be deployed as anti-competitive tactics by PBMs to destabilize pharmacy revenue and subsequent closures serve to benefit pharmacies owned by plans and PBMs responsible for DIR fees by driving volume in their direction.  

“Our rural communities are particularly dependent on local community pharmacists for their care, and are especially impacted by these closure,” he wrote. “Pharmacies not only provide access to medication in these communities, they also play an essential role in the provision of other critical services, such as patient education, management of chronic disease, preventative care, certain testing, and vaccine administration.” 

The entire letter is here.

KTVZ news sources

Comments

8 Comments

  1. Im sure many bi-mart customers would be happy to pay a few dollars more per visit if they would stay open. I just switched to Costco after reading the horror stories about Walgreens, and the line there wasn’t any better.

    1. Walgreen’s (I use the one on Franklin) has definitely been slammed each time I’ve been in the last few weeks, with long lines and low staff numbers. I’ve witnessed more than a couple of melt-downs by impatient customers. The Walgreen’s staff were always professional and respectful in the face of disrespect and anger. Come on, community, this is NOT the employee’s fault. Bring a book and expect to wait, and please don’t take it out on the staff.

      1. Expecting these idiots to do there job is not disrespect! They need to do what they are told! Widen needs to keep out of this. He caused the problem in the first place!

        1. It’s so NOT SHOCKING that a Trump supporter would advocate disrespect and outright threats against pharmacy employees. You have no respect for people in the service industry and treat them like cr&p. Then you get upset when they quit to find a better job not dealing with jerks and your wait is longer. CLUE: You exacerbate the problem. I know that’s a big word but google is your friend.

  2. “PBMs collectively generated annual revenue of $449 billion in 2020”

    That’s money extracted from the system without benifit to big Pharma or the end customer. It is no wonder all other first world countries can provide health care for free.

  3. Are you going to also include in your investigation the increasing government regulations and recent government edicts about what they can and cannot sell, even if prescribed by a doctor?

  4. I noticed that Ron forgot to mention the high business taxes in Oregon that Bi-Mart also cites. Frankly I’m not surprised since he spends most of his time in DC and New York.

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