Independent pharmacies push for joint negotiating ability

The Cincinnati Post is reporting that "independent pharmacists are hoping Congress passes legislation to allow them to band together and negotiate better prices under the Medicare prescription drug program" (source: "Corner drugstores speak up as big guys corner Medicare" Sept. 1, 2007). The article quotes independent pharmacists like Mimi Hart, owner of Hart Pharmacy in the Cincinnati neighborhood of Western Hills, as saying that they need collective bargaining rights to compete against large pharmacy chains like CVS and mail order drug suppliers. Currently such large purchasers of prescription drugs are able to negotiate better reimbursement rates from pharmacy benefit managers, who serve as middlemen between drug makers and health insurers.

The article states that independent pharmacists are pushing a bill called the Community Pharmacy Fairness Act, which would provide a federal exemption from antitrust laws so the pharmacists could negotiate together. According to a survey conducted last year by the National Community Pharmacists Association, 33% of independent pharmacists "said they had considered closing their pharmacy as a result of financial problems brought about by Medicare Part D reimbursement." A study by an opposing industry group, the Pharmaceutical Care Management Association, states that granting collective bargaining to independent pharmacies "could increase prescription drug costs for Medicare and commercial payers by 11.8 percent, or $29.6 billion, over five years."