Bill Meyer Show Podcast - Sponsored by Clouser Drilling www.ClouserDrilling.com - 04-10-25_THURSDAY_7AM-2

Episode Date: April 10, 2025

Jeff Harrell from Black Oak Pharmacy and President of the National Community Pharmacies Association. Why are so many pharmacies in our towns closing? Jeff has the answer, and the group is lobbying the legislature for a fix.

The Bill Myer Show podcast is sponsored by Clauser Drilling. They've been leading the way in Southern Oregon well drilling for over 50 years. Find out more about them at Clauser Drilling dot com. The Bill Myer Show podcast is sponsored by Clauser Drilling. They've been leading the way in Southern Oregon well drilling for over 50 years. Find out more about them at Clauser Drilling dot com. Is there a conspiracy against community pharmacies? Sure looks like it.

And there has just been a battle within the smaller independent and independent pharmacies to fight back against what has been going on against an issue which I've talked about in the past year. The issue with pharmacy benefit managers. That it looked to be... I don't know if this is an intentional act of driving independent pharmacies out of business or not, but I wanted to talk with Jeff Harrell and of course he's associated with Black Oak Pharmacy here in southern Oregon, but he's also president of the National Community

Pharmacies Association. Jeff, how are you doing this morning? Welcome. I'm doing great. Thanks for having me. Well, we had the pharmacies and pharmacy techs and pharmacy owners, all sorts of people were lobbying the state legislature yesterday. They're trying to pass a bill. It's House Bill 3212. And this is something that apparently Democrats and Republicans are both getting together on that

may actually be helpful. What is the issue with the pharmacy benefit manager issue or the business model in the first place that is making it so difficult to have pharmacies in your neighborhoods these days? Well, yeah, it's an interesting situation. The bottom line is the poor reimbursement that we are getting from the pharmacy benefit managers. They're squeezing us and squeezing us tighter and tighter. Sad part of this is you know Oregon is number right now the number two state in the country with the

least amount of independent pharmacies. Unfortunately they're closing at a rapid pace and it's really due to the inability of the PBMs to pay us a fair and equitable rate for the for the medication itself, but also a dispensing fee that matches the cost to dispense. I mean, we're, I think Oregon finished up their cost to dispense study last year, and it showed over $13 is what it cost a pharmacy

to dispense a prescription. And a lot of these PBMs are paying us either under a dollar and some of them are paying us zero dollars to dispense. How does a pharmacy benefit manager then have the right to be able to say, all right, it may cost 13, but you only get one? Where does that come from? Just curious. That's the behemoth. They take it or leave it contracts, they shove it down our throat. And we really don't have much of a say when it comes to that if we want to have the access. And so it's a really unfair platform right now. And it's just gotten worse and worse over the years.

Now you run Blackoaker, do you own or run Blackoaker both? So I'm a partner in Blackoaker, I'm also a partner in West Maine there in downtown Medford off West Maine, as well as Shady Cove and Black Oak Medical in the Medford area. Then we have about five others in Southern Oregon and one in Eastern Oregon. And I know that there's a Grants Pass Pharmacy that's also involved in your... That's correct. Yeah. And this is something lobbying. What is the Bill 3212 supposed to do?

Because this has been a big thing. We've noticed that big pharmacies have been closing in Southern Oregon and middle-range pharmacies have been shutting down left and right too. Well, I can think of Weimar a couple of years ago when they ended up pulling out of this because apparently it couldn't pencil any longer. Do the pharmacy benefit managers have a lot to do with this? Do you know? 100 percent. Unequivocally, they're the sole reason that BiMart had to shut down the

pharmacy segment of their business. They're the sole reason as well as that Walgreens, just sold to a private equity company and they're shutting another 1200 stores this year. And I know that the Medford area has felt that with one of them and potentially a second one coming, not been confirmed, but talked about. Bright Aid is looking to yesterday announced that they potentially could file for a second bankruptcy within a year of just coming out of chapter 11.

Yeah and the Right Aid in Medford closed about a year ago, right? Exactly. I mean our West Main Pharmacy has picked up that we're doing more volume than any of the stores in our group and that store is getting paid you know the less amount of money of that. So they're doing more work for less amount of money just to stay alive. Oh, I see. So in other words, if you lose money on volume, you'll make it up on volume. You're losing money, but you'll do more of the money losing and that'll help you win, right?

Exactly. It's a race to the bottom, I think is what they call that. Oh, man. You know, here it is Jeff, that we understand though that the other challenges that are faced by the pharmacy benefit managers, who hires the pharmacy benefit manager? Maybe that's the next question. This may tell us a little bit, okay? Yeah, so the pharmacy benefit managers are hired by the payers. So in our Oregon area, the one that's hurting us the most is the CCOs or the managed Medicaid segment. They hire the PBMs to implement their pharmacy benefit managers. And I think there's several in different counties across Oregon,

and in those CCOs, there's several different pharmacy across Oregon. And in those CCOs, there's several different pharmacy benefit managers. So the CCOs, that would be one that comes to mind, would that be like an All Care that sort of thing, those sort of groups? Exactly. All Care, UMPQA Health, Samaritan, EOCCO, JacksonCare Connect, all of those are where we're really feeling it in the Oregon side with the PBMS and the managed Medicaid. What is the goal of a pharmacy benefit manager? Naturally they want to keep costs down. Everybody tries to keep costs down, but then you don't want to keep costs down to the point where you have nobody to go to get a pharmacy or a prescription filled.

And so part of me suspects, and you tell me if I'm wrong, do these CCOs or maybe even the insurance companies that are also involved in this too, do they just want to do their own pharmacies? Do they have pharmacies themselves? They do not. And the reason that they do not is it's not an easy hit. It's not an easy business. Many have tried and failed. What the problem is, is they have to hire someone to implement the pharmacy benefits. That's the pharmacy benefit manager. And there's these firewalls in between them, the pharmacy benefit manager and us, the PBM. And so we can't necessarily even talk to them, and they often have no idea what we're getting

paid. They're getting charged from the PBM one price, and the PBM's paying us a way lesser price. Oh, okay. All right, so all care thinks they're paying the pharmacy people a certain amount for prescription, right? And by the time it runs through the PBM, is it kind of skimmed off? Is it one of those kind of financial... Skimmed off is putting it lightly. Okay. All right. So, in other words, it's a slightly legalized racket. Maybe that's how I should put it. I'm just spitballing with you here. It is. And there's no transparency, and that's the problem.

And we can't really even go to Alcare without getting our hands slapped or a letter from the PBMs stating. Now listen, you go through the PBM, you talk to us. You don't talk to the people paying us, right? That sort of thing. Exactly.

It's a cease and desist letter is what I was looking for there. And so, you know, the CCOs want us as a partner. I mean, there's so many clinical services outside of just dispensing that we can do to help patient compliance and help their metrics and their quality scores within this subset of population. But they're blind. They really don't know how bad the PBMs are paying us and hurting us. And we have been able to work through the, quote unquote, chain of command.

And we have some great relationships, like Michelle at Grant's Pass has a wonderful relationship with All-Care. You know, she'd go out and do COVID shots and Regenco and stuff during the pandemic and just was a hero. And so All-Care actually went to bat for her and we got some adjustment there. But you know, that's a unique, unique situation there. That's not always how it happens. And unfortunately, right now, I'm battling, I'm battling many of them in the Oregon stores to improve the reimbursement.

Or unfortunately, we're going to have to stop filling for these patients. And the PBMs have pushed the patient into a commodity. And it's so sad because these communities give so much high quality premium care to these patients, but yet we get paid, you know, crumbs. And so the only way to really get attention is to potentially stop servicing them. Well, you know the dire need of pharmacy in Oregon. I mean there's not pharmacies on every corner. Yeah, the lines are insane right now, you know, as it is. And I remembered when, you know, a pharmacy I was going to

ended up being closed and then there, my pharmacy or my prescription got transferred to a different pharmacy and the lines doubled there. And it's just continuing to kind of go that way here. Jeff Harrell once again with me, of course he's with Black Oak Pharmacy here in Southern Oregon, but he's president of the National Community Pharmacies Association. So everybody was lobbying House Bill 3212. What would 3212 have done again? Would it have opened this up so that you could talk to the all-cares and the other people who were actually paying the bill and get something better done?

What would it actually do? Unfortunately, I think that it's getting thinned out a little bit. I mean, we were working on a fair and equitable dispensing fee, transparency, you know spread pricing which is what we discussed earlier. The ability to say no to a claim paid underwater, you know, so if we get a prescription paid then we're losing money that we can we can deny service right now we can't. Oh so you're forced to fill the prescription whether you can afford to do it or not? Actually we are bound to that absolutely. Wow. There's some stuff in it that really is going to hopefully pave the way

for more transparency, eventually I hope more reimbursement, but you know Oregon in 13 years doesn't pass any legislation that has helped independent pharmacy one red cent. And I'll go on record saying that and it's really sad to be honest with you. Yeah, I can't imagine being in a business where you are held hostage like that, in which, well, it doesn't matter what your cost is, here's what's being paid and you have to give them. What would it be like if somebody could go to the grocery store and say, well, it doesn't matter what your cost is, here's what's being paid and you have to give them. What would it be like if somebody could go to the grocery store and say, well, I know that a dozen eggs cost you $6, but the state says that you have to sell it to me for $4,

whether you like to or not. How long can people stay in business doing that? Right? Same sort of thing. They're not. That's why pharmacies are closing at a rapid pace. Is this something which is really affecting the Oregon Health Plan? This is what you're talking about, Oregon Health Plan, CCO and things, because I'm hearing the same kind of complaints from doctors that the doctor will say, hey, I charge such and such and such for a certain procedure. And then the Oregon Health Plan says, no, we're going to give you 60 cents on the dollar. I mean, how sustainable is that on medical practices?

Oh, different because they don't have the PBM middleman. They're dealing with direct contracts with CMS, Medicare, or the CC or the state. They can say something to that to the state saying, hey, you're screwing me. We can't do this, right? That kind of thing. Exactly. And so, but we're forced to have to deal with the middleman. And they're the ones that are vertically integrated now. And the top three Express Scripts, Fairmark, and Optum control almost 80% or more of the market in the country. And so there's, like you said, we're forced to take underwater prescriptions and we're handcuffed, completely handcuffed with the ability to do anything at the moment, specifically

in Oregon. And I still wonder if this is considered not a bug but a feature. I can't help but think that ultimately this is just about driving the little people out and so we're just dealing with the big ones that can do it at scale. Would I be wrong? They don't want us around. They don't want us. But they have to have us. And what they don't understand is a lot of these models are modeled off of people sitting in chairs in, you know, back East. You know, Washington and Oregon and Oregon, I mean the layout of the land, you know, where we have pharmacies in Myrtle Creek and

in Grants Pass and Shady Cove, you know, there's just, it's a rural situation that cannot be covered by every big, you know, big pharmacy. And you said it earlier, you know, the Walgreens across the street from West Main there in Medford, they can't keep regular hours, they've had rolling shutdowns, and they don't answer the phone. Patients are waiting two to five days to get their meds. So what are we trying to do here? Yeah, something's got to get paid, that is for sure.

So hospital 3212 would be a baby step to this. I'm going to look more into this and talk with some of our state reps about this. Is there anything that folks listening could do about this? Because this is hitting a lot of people where they live. Okay, Jeff? Absolutely. We need patients, family members, everybody to contact their legislator and really support House Bill 3212. Like you said, baby step, but I'm hoping that it's a little more than a baby step, but we need to get some legislation done to turn the head of the horse.

Hopefully it's not too late, but something's gotta give, and the support from the community is huge, because when the legislators hear from their constituents and things like that, it moves the needle. So those out there listening, please reach out and let them know that you're in support of House Bill 3212 to support independent pharmacy. Jeff, final question I have for you, then you can get back into your meeting here, is

this why you've seen pharmacies doing a lot more things like even providing immunizations and all that sort of stuff? Because they never used to do that inside the pharmacies and now they do a lot of that. Is this part of it? Like, hey, we got to do something just to pay the bills? What? You hit the nail on the head. What we're trying to do and our group is really focused on it, is we're trying to create other revenue streams so that we're not handcuffed by the script, the prescription. Because the PBMs have egregiously just put us so deep into things. And so we are, immunizations, clinical services, a lot of primary care type stuff, where like

you mentioned the doctors are having trouble, primary care is drying up in a lot of these rural communities. and so the pharmacist is able to prescribe and do some different things. And so yes, absolutely, we're looking for other revenue streams to survive while we're trying to fix the dispensing side. Jeff, I really appreciate you coming on. Jeff Harrell at Black Oak Pharmacies, president of the National Community Pharmacies Association. Appreciate the take on this PBM issue. You be well. Thank you very much for having me. I appreciate it. Take care.

Quite the pleasure. 753 at KMED.