Challenges Faced by Independent Community Pharmacies in New Jersey
New Jersey is home to nearly 850 independent community pharmacies, employing over 10,000 professionals. These local pharmacies are vital to their communities, with approximately 88.9% of the U.S. population living within five miles of one. They serve as critical sources of health care information and medication management for patients. However, the landscape for these community institutions is becoming increasingly challenging. In 2023 alone, over 300 independent pharmacies closed across the country, and patients in New Jersey continue to face obstacles in accessing and affording the medications they need for complex and chronic conditions.
The Impact of Pharmacy Benefit Managers (PBMs)
In 2022, 57% of New Jerseyans reported difficulties in accessing and affording prescription drugs. At the heart of these challenges are pharmacy benefit managers (PBMs), intermediaries in the health care system that influence everyone from patients to pharmacists. Operating with minimal transparency, PBMs negotiate drug rebates and discounts with biopharmaceutical manufacturers to increase their profits, often at the expense of patient access and affordability.
PBMs wield significant power as they control 80% of the prescription drug market through their ownership by the nation’s three largest for-profit health insurers. This control allows PBMs to dictate prescription drug formularies—the list of drugs an insurer covers—often steering patients toward more expensive options. Additionally, PBMs promote the use of their vertically integrated pharmacies, further benefiting from other entities they own within the healthcare supply chain. These practices financially penalize independent pharmacies, limiting their ability to provide care to local clients.
Legislative Efforts to Address PBM Practices
Recognizing the detrimental impact of PBM practices, New Jersey leaders have taken steps to curb their influence. In 2023, Governor Phil Murphy signed legislation aimed at promoting transparency throughout the pharmaceutical supply chain and establishing greater oversight of PBM business practices. Justin Zimmerman, acting commissioner of the New Jersey Department of Banking and Insurance, highlighted the importance of this reform, stating that it would enable more meaningful steps toward reducing patient costs.
The legislation seeks to address the lack of transparency and accountability within PBM operations, providing a framework for more equitable drug pricing and access. This reform is essential for helping patients obtain the treatments they need without unnecessary financial burdens.
The Role of Independent Pharmacies and the Need for Continued Support
Independent community pharmacies in New Jersey are crucial in meeting the healthcare needs of local residents. Pharmacists provide essential services such as vaccinations, medication adherence support, and health consultations. However, the financial strain imposed by PBM practices forces many pharmacy owners to consider merging with larger chains or closing their doors altogether. Alarmingly, nearly one in three independent pharmacy owners may shut down this year, exacerbating the already significant shortage of primary care facilities in the state.
The closure of these pharmacies would leave patients with fewer options for accessible and affordable care, potentially leading to longer travel distances and higher costs. In some cases, patients might even forego necessary treatments due to these barriers.
Conclusion
New Jersey’s independent community pharmacies play an indispensable role in providing affordable and accessible healthcare to residents. To ensure these pharmacies can continue to serve their communities, policymakers must advance measures that protect them from the harsh practices of PBMs. Governor Murphy and the Legislature took a critical first step in 2023, but ongoing efforts are necessary to safeguard the interests of patients and the pharmacists they rely on.
By continuing to lead by example, New Jersey can help ensure that independent pharmacies remain a cornerstone of community healthcare, providing essential services and support to those who need it most.
Support your local independent pharmacy and advocate for policies that protect these vital community resources. Together, we can ensure that everyone has access to the medications and healthcare services they need.