Independent pharmacies close at an alarming rate, leaving rural residents without a vital health resource

Sarah Campbell Kier, from Valdosta, Ga., relies on
home delivery. (Photo by Nada Hassanein, Stateline)

Independent pharmacies have long served as a vital resource for rural and underserved communities. Despite their contribution to regional health, many are facing financial stress or have closed.

Barnes Drug Store, an independent pharmacy in Valdosta, Georgia, is an example. Barnes has "been serving the community for a century," reports Nada Hassanein of Stateline. "The family-run business used to have six pharmacies. It now has just one. . . . Independent drugstores are closing at an alarming rate — about one a day in 2023 — squeezed by the huge companies that reimburse pharmacies for costly medications."

A 2023 National Institutes of Health study "found that the estimated 15.1 million Americans who rely on independently owned pharmacies are more likely to have lower incomes, live in rural areas, and to be at least 65 years old," Hassanein explains. "Their health is more complicated, and they’re more likely to need one-on-one counseling to juggle multiple medications."

When a small-town pharmacy closes, residents lose "more than another place where they can buy medicine," Hassanein explains. "Experts say independent drugstores are more likely to know their patrons, offer health and medication counseling, and, crucially, serve communities in need."

Rural pharmacies often lose money because of poor drug reimbursement rates. Hassanein adds, "At Springfield Pharmacy in Delaware County, Pennsylvania, owner Chichi Ilonzo Momah estimates that up to 30% of medications she fills are reimbursed for less than what they cost." Larger drugstore chains such as CVS and Walgreens generally receive higher reimbursements.

Some independent pharmacies lobbied for equal reimbursements, but even with bipartisan support, many efforts failed. "Last year, Georgia Republican Gov. Brian Kemp vetoed a bill that would have required the state’s health insurance program for teachers and state workers to reimburse independent pharmacies at the same rate as chain pharmacies," Hassanein reports. "The bill had received bipartisan, almost unanimous support in the General Assembly."

Understanding what pharmacy benefit managers are reveals flaws and solutions in U.S. drug pricing and selling system

Not all PBM savings are passed along to members.
(Adobe Stock photo)

Despite a deluge of news information discussing the unfair pricing practices of pharmacy benefit managers, what they are and what they do may still be a mystery. James B. Rebitzer, an economics professor at Boston University, provides some answers in his Q&A for The Conversation.

What are pharmacy benefit managers?
During the 1960s, PBMs "became essential middlemen [companies] between drugmakers and the many insurers, employers and government entities who purchase drugs on behalf of their members. . . . These companies negotiate price, affordability and access to prescription drugs. They do this by operating and designing formularies, which are lists of drugs that insurers cover.

Formularies assign drugs to different tiers that determine what patients must pay out of pocket to access the drug. . . . Tier placement determines how affordable a medication is to consumers and the effective drug price that insurers pay. . . .The price at which the PBM obtains the drug for its clients is the net price – the list price minus the drugmaker’s discount. . . . If a drugmaker increases its rebate, the net price falls, even if the publicly posted list prices remain high. This is why focusing on list prices to determine the cost of a drug can be misleading."

Are PBMs working to decrease their clients' costs or increase their profits?
Both. "If the contest for formulary placement works as it should, competition compels drugmakers to offer substantial discounts off the published list price. As a result, insurers and consumers benefit from a reduced net price for drugs. However, formulary competition can be undermined in various ways. . . . Competition within the formulary can also be distorted when drugmakers post very high list prices. This artificially inflates rebates for PBMs without lowering net prices for insurers and other parties."

How does market competition figure into PBM activity?
"The current regulatory environment in the U.S. tolerates overly large PBMs that engage in anticompetitive practices to accumulate excessive profits. Without strong competitors, dominant PBMs are free to charge their customers high fees and keep a larger portion of drugmaker rebates for themselves. . . . In theory, this problem should be self-correcting. . . . High profits should attract new competitors into the industry." But the chances for scrappy upstarts to survive are also limited by the industry's current PBMs' dominance.

Who are the villians?
The concentration of power is the problem. "If we didn’t have PBMs, we would need to invent them – or something like them – to obtain reasonable prices on patented drugs. But the concentration of market power among a few companies threatens to dissipate the value they create. A more competitive and transparent market for PBM services will help keep that contest fair and transparent – to the benefit of customers and society. . . . In that sense, PBMs aren’t the villain. Too much market power in too few hands is the problem, and that’s something more competition, sensible regulation and vocal consumers might fix."

Report: Chain drugstores get $23.55 to fill a blood pressure prescription, but a small drugstore gets only $1.51

Adams Family Pharmacy often loses money filling
prescriptions. (Photo by A. Miller, KFF Health News)

Even as independent pharmacists face low or no profits from medication sales, pharmacy middlemen reimbursements favor large drugstore chains. The Federal Trade Commission and several lawmakers are starting to take aim at prescription benefit managers' power and repayment practices.

"On Sept. 20, the FTC sued three of the largest PBMs. . .The lawsuit followed a scathing FTC report that said the 'dominant PBMs can often exercise significant control over which drugs are available, at what price, and which pharmacies patients can use to access their prescribed medications,'" reports Andy Miller of KFF Health News.

How PBMs dominate reimbursement in Georgia is a drastic example of smaller pharmacies being shorted. The American Pharmacy Cooperative, which represents independent pharmacies, "reviewed the price differential paid to a north Georgia pharmacy and nearby chain stores," Miller explains. "The analysis showed chains were paid well beyond the family business. For example, the chains received an average of nearly $54 for the antidepressant bupropion, while Bell’s Family Pharmacy in Tate, Georgia, got $5.54. . . . For a drug used to treat blood pressure, amlodipine, chain pharmacies received an average of $23.55, while Bell’s got $1.51. . . Bell’s Family Pharmacy closed earlier this year."

Nikki Bryant is a pharmacist and co-owner of Adams Family Pharmacy in rural Cuthbert, Georgia, who has worked to find creative ways to bolster the business' income because the pharmacy loses money. "Bryant and other independent pharmacists say they lose money filling certain prescriptions while reimbursements favor chain pharmacies like CVS that have corporate ties to pharmacy benefit managers," Miller adds. "Bryant said she can make more profit on cake and coffee than with many medications."

Some lawmakers are scrutinizing PBMs. "Members of both parties in Congress have tackled PBM reform," Miller reports. "House members recently introduced another proposal, known as the Pharmacists Fight Back Act, which supporters say would add transparency, limit costs for patients, ensure they get the benefit of drugmaker discounts, and protect their pharmacy choices."

Years of underpayments by PBMs to smaller pharmacies have disproportionately harmed rural communities by "accelerating closures of mom-and-pop pharmacies across the country, said the National Community Pharmacists Association," Miller reports. "The U.S. loses almost one such pharmacy a day, said Anne Cassity, a senior vice president of the association."

Powerful pharmacy benefit managers are tasked with cutting costs, but their practices can undercut small pharmacies

PBMs increase profits when independent pharmacies
go out of business. (Adobe Stock photo)

The loss of independent pharmacies across the country has been a concern for rural residents, but who are the fabled PBMs, or pharmacy benefit managers, how do they operate and what do they gain when they force smaller pharmacies to close, ask Reed Abelson and Rebecca Robbins of The New York Times. "A New York Times investigation found PBMs, which employers and government programs hire to oversee prescription drug benefits, have been systematically underpaying small pharmacies, helping to drive hundreds out of business."

PBMs garner the power to underpay smaller pharmacies from "two main sources. First, the three biggest players — CVS Caremark, Express Scripts and Optum Rx — collectively process roughly 80 percent of prescriptions in the United States," Abelson and Robbins explain. "Second, they determine how much drugstores are reimbursed for medications that they provide to patients. . . . When local drugstores fold, the benefit managers often scoop up their customers, according to dozens of patients and pharmacists."

The process of how pharmacists purchase medicines, sell them to patients and receive reimbursements is undermined by PBMs who seek to add to their profits by undercutting smaller drugstores' drug reimbursements. The Times reports, "To take just one example: For a month’s supply of the blood thinner Eliquis, several pharmacists in different states said, the big three PBMs routinely paid them as much as $100 less than what it cost the pharmacies to buy the medication from a wholesaler.

"By contrast, the PBMs sometimes pay their own pharmacies more than what they pay local drugstores for the same medications. Independent pharmacies are powerless to fight back. As the unprofitable transactions pile up, some are unable to stay afloat. . . . [The closures] have disproportionately affected rural and low-income communities, creating so-called pharmacy deserts that make it harder for residents to get prescriptions and medical advice."

There is an inherent tension between PBMs and any pharmacy seeking drug reimbursements. The PBMs' purpose is to cut costs, which is accomplished by paying pharmacies less. Those savings can, "in turn, lower insurance premiums for workers and people covered by government programs like Medicare," Abelson and Robbins write. "But that apparent frugality often benefits the PBMs in ways that have nothing to do with their clients’ interests. . . .At the same time that PBMs are reimbursing pharmacies at rates below their costs, the benefit managers are often charging employers much higher prices and pocketing the difference, according to insurance paperwork reviewed by The Times."

Rural pharmacies have been forced into closure for years; now bigger chains are shuttering stores

A Walgreens pharmacy in Murphy, North Carolina,
pop. 1,600. (Wikipedia photo)

 

Over the past decade, rural, independent pharmacies faced shrinking profits and many closed. But now, even big chains are struggling to keep the current drugstore model profitable, reports Nathaniel Meyersohn of CNN News. "CVS is closing 900 stores. Walgreens announced it plans to close 1,200 stores, meaning 1 in 7 will disappear. . . .They are now shutting down because of shifting consumer habits, competition and changes in the pharmacy industry."

Both independent and larger drugstore chains blame some of their financial decline on pharmacy benefit managers, or PBMs, which negotiate rebates from drug manufacturers to insurers. "PBMs have been cutting reimbursement rates to boost their own profits, Elizabeth Anderson, an analyst at Evercore IRI," told CNN. "The pharmacy industry has complained that PBMs have too much control and can squeeze pharmacies. PBMs argue that they help keep drug prices down by negotiating with drug makers."

Walgreens added primary care clinics to try and bolster its bottom line, but the venture was unsuccessful. "Walgreens took a $5.2 billion stake in VillageMD, a primary care network, in 2021. But VillageMD has not been profitable for Walgreens, and Walgreens has tried to cut costs," Meyersohn writes. "The chain has been closing VillageMD locations and said over the summer it will divest from the company."

When the past 20 years of pharmacy availability for Americans is scrutinized, rural residents usually end up with fewer options and a longer drive for medication treatment, but the same can be true for poorer neighborhoods. Meyersohn reports, "Roughly one out of every eight pharmacies closed between 2009 and 2015, which disproportionately affected independent pharmacies and low-income neighborhoods, according to a study published in the Journal of the American Medical Association."

Out-of-pocket prescription expenses can be painful -- here are some steps to control costs

Retail drug prices vary. Shopping around can
save money. (Photo by Jake Dockins, WSJ)

Ringing in the new year can mean the costly reset of health insurance deductibles, but understanding new caps and limits on prescriptions can make out-of-pocket expenses more manageable. "The Inflation Reduction Act of 2022 contained some of the most sweeping drug-price provisions ever enacted," reports Peter Loftus of The Wall Street Journal. Beyond the law's changes, there are several steps people can take to "put a lid on drug costs."

Beginning in 2023, insulin costs were capped at $35 per month for Medicare recipients. Loftus explains, "You can check the websites of the three main insulin manufacturers — Eli Lilly, Novo Nordisk and Sanofi — to see if the price of your insulin is being cut." If you carry private insurance, the cap does not apply.

The reduction act also "expanded the list of vaccines that seniors enrolled in Medicare Part D can receive at no cost," Loftus reports. Details are available here.

Check with your provider to see if swapping out your costly brand-name drug for a generic is an option. Loftus adds, "There's also a newer category of drugs called biosimilars, which are close copies of brand-name biologic drugs such as Humira, the high-selling drug for autoimmune diseases. . . . Here is the growing list of approved biosimilars."

Take time to compare costs. "Prices for the same drug can vary widely depending on where you buy it," Loftus writes. "For generics, check out the growing number of online discount prescription services. The Mark Cuban Cost Plus Drug Co. offers generic drugs at a 15% markup plus pharmacy and shipping fees by cutting out pharmacy middlemen and negotiating directly with manufacturers. Amazon.com offers various pharmacy services, including one that provides eligible medications for $5 a month, found here."

To read about when to consider skipping insurance and to find links to more savings options, you can read Loftus's full article here.

As states receive more than $50 billion in opioid settlement money, companies are competing to get some of the funding

Caution is advised with settlement money.
(Photo by JP Valery, Unsplash)

Money from opioid settlements began to hit state coffers in November, and now a long line of companies and service providers want to help states spend it. Experts are urging caution, reports Aneri Pattani KFF Health News. Marketing pitches for everything from funding new psychedelic research to providing law enforcement with lassos instead of tasers have been flooding state and local officials in charge of distributing the more than $50 billion in settlement funds.

The billions in payments were intended as a punishment and warning to drug companies whose aggressive, harmful and often dishonest marketing practices "fueled an epidemic that progressed to heroin and fentanyl and has killed more than half a million Americans," Pattani explains. "The settlement money, arriving over nearly two decades, is meant to remediate the effects of that corporate behavior."

But as the dollars began to flow to states in early November, "a swarm of private, public, nonprofit, and for-profit entities began eyeing the gold rush," Pattani writes. "Some people fear that corporations, in particular — with their flashy products, robust marketing budgets, and hunger for profits — will now gobble up the windfall meant to rectify it."

JK Costello, director of behavioral health consulting for the Steadman Group, a firm that is being paid to help local governments administer the settlements in Colorado, Kansas, Oregon and Virginia, "receives multiple emails a week from businesses and nonprofits seeking guidance on how to apply for the funds," Pattani adds. "To keep up with the influx, he has developed a standard response: 'Thanks, but we can't respond to individual requests, so here's a link to your locality's website, public meeting schedule, or application portal.'"

KFF Health News "obtained email records in eight states that show health departments, sheriffs' offices, and councils overseeing settlement funds are receiving a similar deluge of messages," Pattani reports. "In the emails, marketing specialists offer phone calls, informational presentations, and meetings with their companies. Alabama Attorney General Steve Marshall recently sent a letter reminding local officials and vet organizations to reach out.

While some private sector companies will be partners, "the key, agree public health and policy experts, is to critically evaluate products or services to see if they are necessary, evidence-based, and sustainable — instead of flocking to companies with the best marketing," Pattani reports. "And, ultimately, failure to do due diligence could leave some jurisdictions holding an empty bag."

Newly released data reveals a 'virtual opioid belt' developed over about 15 years in West Virginia, Virginia and Kentucky

Average number of pills distributed per person per year, ranked by county from 2006 to 2019. White is equal to zero pills and scarlet is 120+ pills; shades of pink are ranges between those two. (Post via Openmap, with DEA Automation report data)

America's battle with pain-pill prescriptions might be tapering off, but deaths spawned by its spin-offs, heroin and fentanyl, have increased, and deeply affected regions are still clawing toward a recovery.

A database maintained by the Drug Enforcement Administration shows how the use of pain pills increased dramatically, particularly in Appalachian counties. The database "tracks every single pain pill sold in the United States, tracing the path from manufacturers and distributors to pharmacies in every town and city," reports Steven Rich, Paige Moody and Kevin Schaul of The Washington Post. "These records provide an unprecedented look at the surge of legal pain pills. . . which resulted in more than 210,000 overdose deaths during the 14-year time frame ending in 2019. It also sparked waves of an ongoing and raging opioid crisis first fueled by heroin and then illicit fentanyl."

The information can help people "understand the impact of years of prescription pill shipments on their communities," the Post reports. "A county-level analysis shows where the most oxycodone and hydrocodone pills were distributed across the country over that time — more than 145 billion in all."

The DEA's database, known as ARCHOs, was not willingly shared with the public. The Post and HD Media, which publishes the Charleston Gazette-Mail in West Virginia, "waged a year-long legal battle for access to the database, which the government and the drug industry had sought to keep secret," Rich, Moody and Shaw add. "The initial release of data covered 2006 to 2012, and was later updated through 2014. . . . The Post analysis shows that the volumes of the pills handled by the companies climbed as the epidemic surged, increasing by 52 percent from 8.4 billion in 2006 to 12.8 billion in 2011."

Appalachian counties have maintained that their regions were targeted by pharmaceutical companies' greed. The maps show how those areas suffered more than other areas of the country. The Post reports, "Comparing county-level maps of prescription opioid overdose deaths and pill shipments reveal a virtual opioid belt of more than 90 counties stretching southwest from Webster County, W.Va., through southern Virginia and ending in Monroe County, Ky. This swath includes 18 of the top 20 counties ranked by per-capita prescription opioid deaths nationwide and 15 of the top 20 counties for opioid pills distributed per capita."

The maps show a 'virtual opioid belt' through Appalachia. (Post map, from DEA and CDC data)

Some of the most common prescription drugs face extinction; 'repatriating' our drug supply' offers one solution

Photo by Alexander Grey, Unsplash

Imbalanced profits between brand-name and generic drugs is one cause of Americans' prescription drug woes, reports Geoffrey Joyce for The Conversation, a journalistic platform for academics. "Patients and their providers increasingly face limited or nonexistent supplies of drugs, many of which treat essential conditions such as cancer, heart disease and bacterial infections. The American Society of Health System Pharmacists now lists over 300 active shortages, primarily of decades-old generic drugs no longer protected by patents. . . . I believe the drug shortage problem illustrates a major shortcoming of capitalism. While costly brand-name drugs often yield high profits to manufacturers, there's relatively little money to be made in supplying the market with low-cost generics, no matter how vital they may be to patients' health."

The hole in the generic-drug supply chain can have a dramatic impact on rural pharmacies that often make survival profits off their reimbursement. “Filling a generic prescription, from a financial standpoint, is like pulling the slots at a casino,” Ben Jolley, an independent pharmacist in Salt Lake City, told Markian Hawryluk of KFF Health News. “Sometimes you lose a quarter, sometimes you lose a buck, and sometimes you make $500. But you have to have those prescriptions that you make $500 on to make up for the losses on the rest of your meds.”

To shore up generic drug production, their profits would need to dramatically increase. Joyce explains, "Prices of brand drugs in the U.S. are among the highest in the developed world, while generic drug prices are among the lowest. [Brand-name] patents allow the drugmakers to cover the costs. . . and earn a profit without the threat of competition from a rival making an identical product. . . . Once the drug becomes generic any company can manufacture it. . . . Profits are determined by their ability to manufacture the drug at the lowest marginal cost. This often results in low-profit margins. . . . One of the consequences of generics' meager margins is that drug companies outsource production to lower-cost countries. As of mid-2019, 72% of the manufacturing facilities making active ingredients for drugs sold in the U.S. were located overseas, with India and China alone making up nearly half of that."

A generic drug's paltry profits also mean its quality can suffer, which can be dangerous. "A company that sells a new, expensive, branded drug has a strong profit motive to keep quality and production high. That's often not the case for generic drug manufacturers, and this can result in shortages," Joyce reports. "In 2013, the Department of Justice fined the U.S. subsidiary of Ranbaxy Laboratories, India's largest generic drug manufacturer, $500 million after it pleaded guilty to civil and criminal charges related to drug safety and falsifying safety data. In response, the Food and Drug Administration banned products made at four of the company's manufacturing facilities in India from entering the U.S., including generic versions of gabapentin, which treats epilepsy and nerve pain, and the antibiotic ciprofloxacin."

What are the options? "One option is to simply find ways to produce more generic drugs in the U.S.," Joyce adds. "California passed a law in 2020 to do just that by allowing the state to contract with domestic manufacturers to produce its own generic prescription drugs. In March 2023, California selected a Utah company to begin producing low-cost insulin for California patients. . . . Whether this approach is feasible on a broader scale is uncertain, but, in my view, it's a good first attempt to repatriate America's drug supply."

Rural pharmacies are medical 'cornerstones' in their communities; despite financial stresses, some are growing

Photo by Tbel Abuseridze, Unspash

Rural pharmacies have long served their communities as multi-service medical clinics, and many have faced financial stresses lately, but the future may be brighter. "Pharmacies are often cornerstones of rural communities providing access to medication and medical equipment as well as providing medication counseling, monitoring of blood pressure and glucose, and other services," reports Dr. Whitney Zahnd for The Rural Monitor. "Over the past several years, studies from the Rural Research Alliance of Community Pharmacies have demonstrated notable decreases in pharmacies in rural communities. The now 20-year financial impact of Medicare Part D, coupled with the increasing influence of pharmacy benefit managers, has negatively impacted the financial viability of rural pharmacies. This has led to a 9.8% decline in pharmacies in non-core rural areas and a 4.4% decline in micropolitan rural areas between 2003 and 2021."

Not all the news is bad. Zahnd writes, "Recent findings from Rural Policy Research Institute have identified that, since 2020, the tide may be turning. The rate of closures has slowed since 2020, and new rural pharmacies have opened throughout the country." NuCara Pharmacy, which began as a rural pharmacy in Conrad, Iowa, pop. 1,000 is an example of a smaller pharmacy chain that has managed to innovate and stay open. "CEO Brian Wegmann noted additional changes that have broadened both the modalities of pharmacy services, such as the inclusion of telepharmacy, and the expansion of services provided by NuCara, such as infusion, home health, and respiratory services. Additionally, NuCara has moved into areas where chain pharmacies like ShopKo moved out of rural communities, such as Greenfield, a rural town of just over 2,000 people in southwestern Iowa."

Beyond additional "modalities" of support, some area researchers made rural pharmacies their object study to "understand the unique challenges and strengths they possess, especially as many interventions and initiatives are developed in urban or suburban settings that may not be translatable to rural settings," Zahnd reports. In the Southeast, researchers from several universities formed Rural-CP, which "reviewed how other pharmacy practice-based research networks were structured and started making in-person and virtual site visits to rural pharmacies. . . . They are now engaged with 125 rural community pharmacies across seven states in the Southeast, most of which are independent or small chain pharmacies. . . . Any projects that engage these pharmacies also must provide a financial incentive, which has ensured that pharmacies are supported for their time."

Rural pharmacies are also finding ways to face their recruitment challenges. The University of Illinois-Chicago rural pharmacy education program "is one of a handful of programs at schools of pharmacy that provide a concentration or certificate in rural pharmacy," Zahnd explains. "The Rpharm program, established in 2010, is an interprofessional program that educates students about unique elements of rural pharmacy practice and prepares them for working in an interprofessional environment alongside medical and nursing students who are participating in the University's rural medicine and rural nursing programs. . . . . Wegmann of NuCara Pharmacy noted the mutual benefit of having pharmacy students do rotations in rural NuCara Pharmacy locations. He told Zahnd: "We're an attractive spot for student rotations because of the dynamic and diverse practice settings that we can offer because of our compounding and home infusion services as well as our community sites."

Farmer who grew up dirt poor secretly paid for neighbors' prescriptions; he's gone, but legacy of giving is spreading

Hody Childress and daughter Tania Nix (Photo by Ronald Nix)

The kindness of strangers, it seems like a fable . . . or so croon the lyrics of an old Susan Ashton melody.

In Geraldine, Alabama, pop. 910, this fable came to life: "Every month for more than a decade, a local farmer, Hody Childress, had made anonymous cash donations to the pharmacy, Geraldine Drugs, aiming to help neighbors struggling to pay for prescription medication," reports Emily Schmall of The New York Times. "The wider community learned of his good deed only after he died at 80 in January. Now, his family and donors from across the United States have vowed to continue his legacy."

Schmall shares a recent example: "When the doctor saw what a hornet sting had done to Eli Schlageter, 15, causing his mouth and throat to swell, his advice to Eli’s parents was unequivocal: Get an EpiPen. . . . But they were stunned to learn that a single dose of the lifesaving drug cost $800 . . . So, to help the family, the pharmacist, Brooke Walker, turned to an envelope full of carefully folded hundred-dollar bills from an anonymous donor."

Childress's giving often made a difference. "Over the years, Dr. Walker said, the fund had helped at least two people a month who didn’t have insurance or whose benefits didn’t cover their prescription medicine," Schmall reports. Eli Schlageter's mother, Bree Schlageter, told Schmall, “What he doesn’t know, now that he’s in heaven, is that he helped a kid that works on a farm that he started. Look at that circle.”

Geraldine and DeKalb County (Wikipedia)

Now it spawns other circles. "Ms. Nix and her family and Dr. Walker have received calls and messages on social media from people across the United States wanting to donate," Schmall reports. "Last week, Dr. Walker received a check from someone in Tennessee. On Monday, a person called from Miami. He told her that unless she needed the money, he was going to approach his local pharmacy and start his own Hody Childress account."

Childress "grew up poor, surviving with his family on subsistence farming and by hunting small game," Schmall reports. His son said the house had no electricity until his father was about 7. His daughter, Tania Nix, said, “Giving that way, that just got on his heart and he felt like he needed to do it.”

UPDATE, Feb. 3: Nix and her brother told Steve Hartman of CBS that their father was "nearly broke" at his death because he had spent $10,000 or more helping people pay for prescription drugs.

CVS, Walgreens in tentative deal to pay state and local governments billions for opioid crisis; Walmart still in talks

"CVS Health and Walgreen Co. announced agreements in principle Wednesday to pay about $5 billion each to settle lawsuits nationwide over the toll of opioids, and a lawyer said Walmart is in discussions for a deal, reports Geoff Mulvihill of The Associated Press. "The developments amount to what could be the last round of huge settlements after years of litigation over the drug industry's role in an overdose epidemic that has been linked to more than 500,000 deaths in the U.S. over the past two decades."

The epidemic had its roots in rural areas, especially Appalachia. "Most of the deaths initially involved prescription drugs," Mulvihll notes. As governments, doctors and companies took steps to make them harder to abuse and obtain, people with opioid use disorder increasingly switched to heroin, which proved more deadly. In recent years, opioid deaths have soared to record levels around 80,000 a year. Most of those deaths involve illicitly produced version of the powerful lab-made drug fentanyl, which is appearing throughout the U.S. supply of illegal drugs."

The lawsuits by state and local governments alleged that drugstores were filling prescriptions they should have recognized were inappropriate, largely because there were so many of them.

The proposed deal would have CVS pay the governments $4.9 billion and Native American tribes about $130 million over a decade, Mulvihill reports: "Walgreens would pay $4.8 billion to governments and $155 million to tribes over 15 years. The exact amount depends on how many governments join the deals. The deals call for most of the funds . . . to be used to fight the opioid crisis. CVS announced its plan along with an earnings report Wednesday, and Walgreens made an SEC filing with some details. . . . Neither CVS nor Walgreens is admitting wrongdoing."

Paul Geller, a lawyer for the governments, said talks are continuing with Walmart, which has a large pharmacy business and a disproportionate share of rural retail.

"The proposed pacts bring a nationwide tally of finalized and completed settlements between companies and governments to more than $50 billion," Mulvihill reports. "The settlement was announced as litigation over the role of pharmacies in the opioid crisis has ramped up. On Tuesday, 18 companies — most of them pharmacy-related — submitted reports to a judge overseeing opioid litigation detailing where they face lawsuits. Only a handful of opioid settlements have had bigger dollar figures than the CVS plan. Distributors AmerisourceBergen, Cardinal Health and McKesson this year finalized a combined settlement worth $21 billion and drugmaker Johnson & Johnson finalized a $5 billion deal. Purdue Pharma, the maker of OxyContin, and members of the Sackler family who own the company have a proposed settlement that would involve up to $6 billion in cash, plus the value of the company, which would be turned into a new entity with its profits used to combat the epidemic. That plan has been put on hold by a court."

Rural communities lost 10% of their retail pharmacies in the last 20 years, and most were independents', not chains'

Change in count of independent pharmacies, 2003-21: rural in red, micropolitan
(10,000-50,000 city pop.) in green (RUPRI Center for Rural Health Policy Analysis)

"Rural America is losing pharmacies, especially independently owned drug stores that are mainstays of rural communities," Liz Carey reports for The Daily Yonder. "Challenged by slow payments, decreasing reimbursements from insurance companies and Medicare, and growing competition, nearly 600 independent rural pharmacies have closed since 2003, a study from the RUPRI Center for Rural Health Policy Analysis at the University of Iowa found. During the same period, the number of franchise pharmacies fell by about 70, while chain pharmacies like CVS and Walgreens grew by about 90 stores."

In that time frame, the number of rural retail pharmacies fell 9.8% while the number in metro counties grew 15.1%. "Of the retail rural pharmacies, independently owned pharmacies declined by 16.1%, while the number of independently owned metropolitan pharmacies increased by 28.2%," Carey reports. "There were 3,698 independently owned rural pharmacies in 2003. By 2021, there were only 3,102. Nearly half of the pharmacies located in rural areas are sole, independently owned retail stores, researchers said."

Negotiated pricing is a major reason for the closures, said one of the study's authors. When pharmacies' costs go up, reimbursements from insurance providers, Medicare and Medicaid sometimes don't keep pace. Delays in those reimbursements are a problem too. "Additionally, competition from not just the chain pharmacies, but mail-order pharmacy services works against the independent retail store," Carey reports. "Another challenge, researchers said, is the aging rural population, and the difficulties handling these more complex patient cases."

Fewer drug companies are participating in federal drug-discount program, posing another threat to rural hospitals

"Hospitals and community and rural health clinics that serve low-income patients say drug manufacturers have threatened their financial stability by dramatically cutting back their participation in a federal drug-discount program that saves those health providers millions of dollars a year," Michael Ollove reports for Stateline. "Without the drug discounts, the hospitals and clinics say, they are getting close to laying off health-care workers, reducing hours or scaling back or scrapping mobile health vans, free cancer screenings, behavioral-health treatment and a host of other services that help patients with low incomes who lack insurance."

The program is known as 340B, for a section of law. Drug companies give a discount (generally 20%-50%) to providers that serve patients regardless of ability to pay. "In exchange, the government promises that Medicare and Medicaid will cover their products," Ollove reports. But in the past two years, 17 drug companies, including Bristol Myers Squibb, Johnson & Johnson, Gilead, Merck and Pfizer, have reduced their participation. Their lobby, "PhRMA, argues that the discounts have been used too broadly and for patients who could afford the drugs’ higher retail prices."

Drug makers also don't like providers letting patients fill prescriptions at their "contract pharmacies," which charge the discounted rates. PhRMA argues that there isn't enough transparency from the contract pharmacies to ensure that providers aren't abusing the program. "But safety-net providers say eliminating those drugstores, many of which are geographically closer to their patients, essentially deprives them of savings and their patients of 340B discounts," Ollove reports. "Only small minority of safety-net providers operate in-house pharmacies."

PhRMA bases its objections on two studies: A 2020 report from the Government Accountability Office that found 1,536 rule violations in 2012-19, and a 2018 study in the New England Journal of Medicine that said there's no clear evidence the program has expanded care or lowered mortality rates of low-income patients. But safety-net providers "assert that violations of the rules represent a tiny fraction of the thousands of prescriptions filled under the 340B program," Ollove reports. "They point out the program is overseen by the U.S. Department of Health and Human Services and insist that they plow all the savings back into the mission of caring for low-income patients. The New England journal’s study, they say is flawed."

The drugmakers' withdrawal from the program has hurt many rural hospitals. Recently surveyed hospitals "reported median annual losses of $2.2 million in discounts, with a tenth of those hospitals expecting losses of $21 million or more," Ollove reports. "Rural hospitals surveyed expected annual losses of $448,000, with a tenth projecting losses of $1.3 million or higher. That comes amid a financial crisis that has seen at least 130 rural hospital closures in the past decade." In another survey, one-third of community health centers said that, without 340B discounts, more than half of their patients would go without vital medications such as insulin or inhalers for children with asthma.

“These are billion-dollar companies. . . . The percent they are taking from us is so small to their bottom line, but it is so significant to us," Dr. Kemi Alli, CEO of the Henry J. Austin Health Center in Trenton, N.J., told Ollove. "It just seems inconceivable why they even put the effort into this to take away from the most vulnerable in our society. It doesn’t make any moral sense."

Federal funding of Covid tests for uninsured Americans running dry; nation's largest lab to charge $125/test

"As the White House pleads with Republicans in Congress for emergency aid to fight the coronavirus, the federal government said that a fund established to reimburse doctors for care for uninsured Covid patients was no longer accepting claims for testing and treatment 'due to lack of sufficient funds'," Ellen Barry reports for The New York Times. Some U.S. health-care providers are informing uninsured people they can no longer be tested for the virus free of charge, and will have to pay." People with private insurance, Medicare or Medicaid are not affected.

Quest Diagnostics, one of the nation's largest networks of testing sites and labs, began telling uninsured clients last week that they must pay $125 per test, Barry reports. "On Wednesday, the federal Heath Resources and Services Administration stopped accepting claims for testing and treatment for uninsured patients. On April 6, the agency will stop reimbursing providers for vaccinating uninsured people." Those include pharmacies. Coronavirus infections often lack Covid-19 symptoms, so without free testing, uninsured people could unknowingly infect others in vulnerable populations. Around 31.2 million Americans were uninsured in 2020.

"Early this year, during the Omicron wave, the program allowed leading laboratories to perform 500,000 tests a month free of charge to uninsured individuals, according to the American Clinical Laboratory Association," Barry reports. "In 2021, the program spent $130 million to reimburse providers for testing, treating and vaccinating uninsured people. The White House recently requested $22.5 billion in emergency Covid aid, but Republicans in Congress have said they will not approve another aid package unless the White House finds another way to source the funds. . . . An initial deal to use about $7 billion in state-government coronavirus aid to help pay for a smaller, $15.6 billion package collapsed earlier this month when rank-and-file House Democrats and governors objected to clawing back that money."

Opioid treatment programs are inaccessible for many rural Americans, and many don't offer the full range of treatment

Percentage of opioid treatment programs than accept Medicaid coverage, by state
Map by The Pew Charitable Trusts; click the image to enlarge it.

Opioid overdose deaths have shot up during the pandemic, topping a record-setting 100,000 in the 2021 fiscal year. But only 11 percent of the 2.7 million Americans with opioid-use disorder received medication-assisted treatment in 2020, and opioid treatment programs remain out of reach for many Americans with opioid-use disorder, including those in rural areas, Sheri Doyle and Vanessa Baaklini report for The Pew Charitable Trusts. Not only are OTPs scarcer in rural areas—Wyoming, one of the most rural states, had none at all as of 2020—but rural programs may not do much good if they don't accept Medicaid, offer buprenorphine, or have mental-health care that goes beyond drug treatment,

Pew found significant disparities among the states. OTPs are the only health-care facilities that may offer patients all three types of medication-assisted therapy for opioid addiction, but 60.5% didn't offer injectable naltrexone and 24.2% didn't offer buprenorphine.

Buprenorphine availability may have been hampered because medical providers once had to obtain special training and a waiver to prescribe it, but in April 2021 the Department of Health and Human Services largely did away with the waiver. However, the treatment still may be hard to get because the Drug Enforcement Administration also began cracking down on pharmacies suspected of improperly dispensing it, so many pharmacies subsequently refused to dispense it all.

Medicaid acceptance among OTPs also varied widely, from 100% in several states to none in Mississippi and South Dakota; 83.2% of OTPs overall accept Medicaid, Doyle and Baaklini report. When Medicaid is not accepted, the poor must pay out of pocket or seek charity.

Mental-health issues are common among those with opioid-use disorder, and treating such problems—which are often at the heart of opioid misuse—can help make drug treatment stick. But only 46.1% of OTPs offer mental-health treatment, Doyle and Baaklini report.

The study found wide disparities in the availability of OTPs that cater to specific populations: 64.1% offer treatment in other languages, 56.9% offer treatment specially for pregnant people, 24% for LGBTQ Americans, 24% for veterans, and 4.7% for adolescents.

Pew has recommendations for improving access, including a re-conception of the programs. OTPs have "punitive rules that reflect a distrust of patients—such as observed daily dosing, regular urine drug screens, and limits on access to take- home medication—rather than encouraging a collaborative setting in which the provider and patient work in partnership," says a Pew brief published with the study.

Also, state laws "prevent or discourage new OTPs, such as prohibiting OTPs near schools, requiring new OTPs to obtain a certificate of need (a legal document demonstrating public need for new facility services), or requiring licensure by the state board of pharmacy, a level of oversight not required by the federal government," Pew reports. "West Virginia law even prohibits new clinics from opening at all."

To increase access, Pew recommends that all OTPs accept Medicaid, that states should encourage mobile methadone clinics, and that more OTPs in general should be opened.

Covid roundup: Child-care programs with mask mandates less likely to close for quarantine; beware of antibody tests

A new x-ray technique shows how Covid-19 ravaged the

lungs of a 54-year-old victim. In the scan above, open

airspaces are cyan, open blood vessels are red, and blocked,

damaged blood vessels are yellow. (National Geographic)

Here's a roundup of recent news stories about the pandemic:

Child-care programs that require children 2 and older to wear masks are less likely to close due to infection of a child or staff member, a new study shows. The findings matter because such unpredictable closures make it harder for parents—especially moms and single parents—to work outside the home.

Many drugstores offer coronavirus antibody tests. But they're often a poor indicator of how protected you are from Covid-19, because different people can be protected from infection with different amounts of antibodies. The test also should not be used instead of a PCR or rapid-antigen test, because it can't tell whether you're currently infected. Read more here.

New X-ray techniques show how Covid-19 can damage the body—especially the lungs—with shocking clarity. Read more here.

Though the Omicron surge seems to be waning, rural hospitals have had a tough time with it and resources are still stretched thin. One Missouri hospital built a makeshift intensive care unit for a critical patient with supplies from Walmart after failing to find a single ICU bed at 19 larger hospitals in the region. And monoclonal antibody treatments are in such short supply that many hospitals use a lottery system to determine who gets them.

Four hospitals in rural Maine were too small to qualify for a federal relief program that sent ambulance teams to help transport patients. So the hospitals banded together and applied as a region, and the tactic worked. Read more here.

A new study links coronavirus vaccines to slight menstrual-cycle changes, but no damage to fertility. Cycles were extended by an average of less than a day for people who got one dose, or two days for people who got two doses within a single menstrual cycle. Read more here.

A right-wing journalist who was hospitalized with Covid-19 showed social-media followers a prescription for ivermectin, an anti-parasitic drug that has been baselessly promoted as a Covid cure. His testimonial shines a spotlight on a small minority of doctors who reap financial windfalls from prescribing unproven Covid treatments, usually by telehealth. Such doctors rarely face consequences for unethical behavior, though. Lawmakers in North Dakota and Tennessee have restricted medical boards' and regulators' ability to penalize such doctors, and 10 other states are trying to pass similar measures.

Practices of insurance companies, pharmacy benefit managers (middlemen) lead to closures of rural pharmacies

Rural residents depend on local pharmacies more than ever during the pandemic, seeking masks, home coronavirus tests and vaccinations. "But even with that increased business, retail pharmacies, big and small, are closing their doors ... straining small towns where options were already limited," April Ehrlich reports for NPR affiliate Oregon Public Broadcasting.

Two major factors are creating the trend, said Rick Chester, owner of Medicap Pharmacy in Talent, a town of 6,500 between the Cascades and the Coast Range near the California line. First, insurance companies are pushing people to get prescriptions by mail, taking business from already struggling rural pharmacies and, because of slower mail service, is often impractical for rural residents.

The other issue is profit-seeking policies from lightly regulated pharmacy benefit managers, the middlemen that stand between pharmacies and insurance companies. "Basically, when someone gets a prescription through an insurance or Medicare plan, the PBM is supposed to reimburse the pharmacy for the drug cost and some overhead. But in recent years, PBMs started decreasing the amount they reimburse when pharmacies don't meet certain sales markers," Ehrlich reports. "According to a report by the U.S. Centers for Medicare and Medicaid Services, PBMs have increased their fees for Medicare plans by more than 91,000% in the last two years. PBM reimbursements have gotten so low that sometimes pharmacies say they actually lose money when they fill prescriptions from certain insurers. And some pharmacies ... just can't make it work financially. The PBM Trade Association disputes that PBMs are the reason for rural pharmacy closures.

Some states, such as Kentucky, have cracked down on PBMs; one big one is owned by CVS Health, a pharmacy chain. Sen. Ron Wyden (D-Ore.) wants Congress to increase oversight of PBMs because he believes current laws are vague and inconsistent. "They can kind of decide, gee, we really weren't making enough money, but we'll say the pharmacy's inefficient and just throw some more costs at them," Wydeon told Ehrlich.

Meanwhile, rural residents are having a hard time getting pharmacy services, especially people with busy schedules or chronic illnesses. In Baker City, Ore., for example, one of the town's four pharmacies closed last year. The other three pharmacies are often overwhelmed now, with lines sometimes going out the door, Ehrlich reports. The lines are so long that some people bring dinner to eat in line, and store clerks bring out wheelchairs for old or sick people who can't stand in line for long.

Pandemic roundup: Interactive graph shows death disparity; hospitals sound the alarm; rural pharmacies struggling

Deaths per 100,000 residents per week, March 7, 2020 through Dec. 11, 2021
(Daily Yonder graph; click on the image to enlarge it or click here for the interactive version.)

Here's a roundup of recent news stories about the pandemic and vaccination efforts:

The Covid-19 death rate in rural America is twice as high as the urban rate, and has been higher than the urban rate since the second wave back in late summer 2020. That's mostly because of rural America's lower coronavirus vaccination rate, but other factors are also in play, Liz Carey and Tim Marema report for The Daily Yonder. Rural Americans are also less likely to wear masks, socially distance, or take other precautionary measures. They're also, on average, older and in poorer health than Americans in metro counties, and have less access to health care.

The Yonder digs further into rural-urban pandemic death toll disparities in a series of interactive charts. Read more here.

In Vermont, Pennsylvania, and other states, an influx of Covid-19 patients is straining resources in rural hospitals' intensive care units.

As hospitals fill up, paramedics spend more time moving patients and have less time to treat them. Read more here.

Rural pharmacies are struggling, and the pandemic has made it worse. Here's how some rural pharmacists bucked the trend.

Major retailers found liable for opioid epidemic in 2 Ohio counties; ruling bolsters public-nuisance legal strategy

Recent court rulings in Oklahoma and California rejected claims that drug companies were responsible for the opioid epidemic, but an Ohio court ruling this week was a positive signal for other lawsuits using the strategy of claiming a public nuisance. Those cases could bring billions of dollars in payouts to states and municipalities to mitigate the addiction crisis.

On Tuesday a court ruled that major retailers CVS, Walgreens and Walmart helped fuel the opioid epidemic in two Cleveland-area counties. Jurors in a federal court concluded that the pharmacy chains' actions in Lake and Trumbull counties "helped create a public nuisance that resulted in an oversupply of addictive pain pills and the diversion of those opioids to the black market, Nate Raymond reports for Reuters. The verdict is the first the companies have faced over the issue.

The prosecutor will seek more than $1 billion from the companies to help the two counties address the toll of addiction, but "Judge Dan Polster will decide how much the companies owe to abate the epidemic in the counties and is expected to hold a trial on that question in April or May," Reuters reports.

The companies say they plan to appeal the verdict, citing recent Oklahoma and California rulings as proof that the public-nuisance claim was inappropriately applied. "The pharmacy chains have blamed drugmakers for marketing the addictive medications, and doctors for overprescribing, arguing that others were significantly responsible for the flood of legal opioids that were diverted to illegal use," Meryl Kornfield and Lenny Bernstein report for The Washington Post. "But federal law puts a 'corresponding responsibility' on the pharmacist to determine that a prescription he or she fills is for a legitimate medical purpose." Other chains such as Rite Aid and Giant Eagle have previously settled with the counties for undisclosed sums in the matter.

It's unclear whether the public-nuisance strategy will ultimately prove effective. Similar claims are ongoing elsewhere, in state courts in New York and Washington, and a federal court in West Virginia, Kornfield and Bernstein report.