WMDT 47 NEWS - The underlying costs of running a pharmacy: what you don't see behind the counter? Just how much it's costing pharmacists to keep their doors open.
A busy day at Apple Discount Drugs with nearly 1,000 prescriptions filled.
But owner Jeff Sherr says he's losing money on 5 percent of prescriptions. In one sale, the store lost $42 on the deal.
Sherr says he's lost "hundreds of dollars" on a single sale. He claims it's due to contracts with third party companies called pharmacy benefit managers. PBMs act as a sort of middle man by negotiating with pharmacies and drug makers. One such PBM: Caremark Pharmacy Services, also apart of the drug store chain CVS Caremark.
"They're making money on everything and we fill prescriptions at times and lose money," said Sherr. "The contracts don't allow us to turn away a patient, because the fact that we're not making money."
Other pharmacists WMDT spoke with say they're not only losing money, but sometimes can't compete with drug prices.
Melissa Batie Johnson of Riverside Pharmacy says "a lot of times, we hear customers say 'I don't want to leave, but I can't afford $600 for this prescription. I'm going to pay $5 that my PBM owns.' It's hard to compete with that."
Community Pharmacy owner Jeff Farace says he agrees with Johnson.
"It has nothing to do with how good the pharmacy is: it's about how can they control the market and cut us out of the market," said Farace.
CVS Caremark emailed a response to WMDT:
"As a pharmacy benefit manager, CVS Caremark is focused on providing our clients with opportunities to improve health outcomes for their members, while also managing costs. CVS Caremark offers our PBM clients tremendous value, transparency and cost-effective services.
"CVS Caremark has a pharmacy network that includes nearly 68,000 participating pharmacies including national chains and the majority of independent, community-based pharmacies. We reimburse our participating network pharmacies at competitive rates that balance the need to fairly compensate pharmacies while providing a cost-effective benefit to our client plan.
"Our pharmacy reimbursement methodology is consistent with industry practice, and rates paid to participating network pharmacies may vary based on factors such as a plan sponsor's plan design, the network utilized, and the location of the pharmacy (e.g. rural community)."
Sherr admits for those contracted drugs, his businesses loses on average $750 a day.
So how can Apple Discount Drugs afford to stay open? Stay tuned for part II on Thursday 6PM.