JACKSON, Mich. (News 10) – Independent pharmacies in Michigan are closing at what owners describe as an alarming rate, creating access problems in some communities.
Michigan had more than 1,000 independent pharmacies in 2020. By August 2024, that number had dropped to 702, a 32% reduction over four years.
Miguel Rodriguez, Executive VP and General Counsel with American Pharmacies, said the decline is tied to a broader issue in the health care system.
“There’s a problem going on where patients pay more for their drugs, pharmacies get paid less for dispensing them and as a result everyone in the health care system is hurting,” Rodriguez said.
Rodriguez said the loss of independent pharmacies affects patients directly.
“When that happens, they stop taking their medicine. They may not have access to transportation or the time of day to go miles and miles,” Rodriguez said.
Independent pharmacy owners say pharmacy benefit managers, or PBMs, and their practices continue to squeeze them out of business. PBMs act as middlemen, negotiating rebates and discounts with drug manufacturers and determining which drugs are covered by an insurance program.
According to American Pharmacies, the three largest PBMs process 80% of the country’s prescription claims.
Grant Brown, who owns Brown’s Advanced Care Pharmacy, said he has closed two locations in the past four years.
“Reimbursement is the primary issue, where the Pharmacy benefit managers have significantly slashed our payments for what we do,” Brown said.
Chris Munden, who owns two independent pharmacies, said low reimbursements force some owners to stop carrying certain drugs their communities need.
“A lot of times we see reimbursements that are below what we pay for the medications, which is completely unsustainable to be paid below what you pay for a drug,” Munden said.
Munden says he would like to see a transparent model where they know what the pharmacies are being paid and what the government is paying for the medications.
“It makes complete sense to me,” he said.
Advocates and business owners are pushing Republicans and Democrats in the state Capitol to work together on solutions.
Rep. Kathy Schmaltz, R-Jackson, says “everything” needs to be on the table to make sure these businesses can continue to serve their community.
“We need to look at access, we need to look at reimbursements,” she said.
Rep. Sarah Lightner, R-Springport, said the situation is unsustainable for pharmacy owners.
“I think it’s absurd that they’re dispensing medications that cost them more to do business than to not do business,” Lightner said.
Rep. Carrie Rheingans, D-Ann Arbor, pointed to a possible policy change.
“One thing that we could do, in Lansing, is go to a single pharmacy benefit manager for our Medicaid health plans,” Rheingans said.
Rheingans says that could be possible in the near term, most likely next term, because she doesn’t expect the legislature to vote on bills before the end of the year.
Rep. Julie Brixie, D-Okemos, says a solution is needed because of the changes that are coming to Medicaid. She said she learned the “devasting” impacts will affect pharmacies, as well as hospitals and patients.
Rep. Lightner said the single-member PBM would be the easiest fix for “at least a portion.”
“I know it’s a small portion, but a portion would be helpful for these people,” she said.
Some pharmacy owners say they want more awareness and advocacy around the issues they face, which they say could lead to change. Representatives involved in the discussions say conversations are ongoing between lawmakers who view the issue as a bipartisan priority.
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