New Jersey is home to nearly 850 independent community pharmacies, which together employ over 10,000 professionals. About 88.9% of the US population lives within five miles of a community pharmacy, making local pharmacy professionals a critical source of information about patient health care. But these vital community institutions are becoming less and less common—in 2023, there were over 300 net closings of independent pharmacies across the country. At the same time, patients in the Garden State continue to face barriers to the medications they need to manage complex and chronic conditions.
In 2022, 57% of New Jerseyans reported having difficulty accessing and affording their prescription drugs. Throughout the health care system, intermediaries known as pharmacy benefit managers (PBMs) influence everyone from patients to pharmacists. Often left unchecked, PBMs employ practices that create access barriers for patients and administrative challenges for pharmacists. PBM practices not only threaten patients’ ability to access and afford their treatments, but also negatively impact the ability of local independent pharmacies to provide treatments, resources, and essential health care information to their communities.
Recognizing this, New Jersey leaders have been at the forefront of efforts to curb PBM practices. In 2023, Governor Phil Murphy signed legislation to promote transparency throughout the pharmaceutical supply chain and establish greater oversight of PBMs’ business practices. Justin Zimmerman, acting commissioner of the New Jersey Department of Banking and Insurance, underscored the need for this reform, noting that the legislation will enable more meaningful steps toward reducing patient costs.
Operating with little or no transparency, PBMs negotiate drug rebates and discounts with biopharmaceutical manufacturers that increase their profits while creating barriers for patients. The nation’s three largest PBMs are owned by for-profit health insurers and together control 80% of the prescription drug market, enabling them to exert significant influence over how pharmacies and patients access and pay for drugs by prescription.
Addressing the shady practices of PBMs is essential to helping more patients access the treatments they need – in New Jersey and beyond our state’s borders.
PBMs make decisions about prescription drug formularies—the list of drugs an insurer covers—that often steer patients toward drugs with higher out-of-pocket costs. In addition, PBM contracts can promote the use of their vertically integrated pharmacies, which enables companies to further benefit through other entities within the healthcare supply chain that they own and supply. These practices financially penalize and limit independent and community pharmacies from providing care to their local clients.
Pharmacy owners face difficult financial decisions that may require them to either merge with larger pharmacy chains or close. Alarmingly, nearly 1 in 3 independent pharmacy owners may be forced to close their doors this year—in part due to the practices of PBMs. New Jersey patients already face additional barriers to accessing care due to the ongoing shortage of primary care facilities, which would only be compounded by the lack of access to trusted community pharmacists.
Across our state, there are countless stories of how hundreds of independent community pharmacies meet the needs of our neighbors every day. Pharmacists provide essential vaccines for the young and the elderly, help patients adhere to medications for their chronic conditions, and answer patients’ questions about their health. Without care nearby, patients may be forced to travel longer distances and pay higher costs to seek care or even forego treatments and care due to access barriers.
New Jersey’s more than 800 community pharmacies play an essential role in helping patients access affordable treatments. To ensure that pharmacists can continue to provide reliable knowledge and information to their communities, policymakers must advance policies that protect independent and local pharmacies from harsh PBM practices and support patients in accessing treatment.
Governor Murphy and our Legislature took a critical first step in 2023, and New Jersey must continue to lead by example to put patients and the pharmacists they rely on first.
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