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‘Desperate times’: Independent pharmacies fear closure, due in part to pharmacy benefit managers

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mississippitoday.org – Gwen Dilworth – 2024-10-08 12:13:00

Turnage Drug Store survived both world wars, the Great Depression, the rise of chain pharmacies and the decline in popularity of the soda fountain. 

But the 119-year-old Water Valley pharmacy may now be facing its greatest threat yet: untenable reimbursement rates and non-negotiable contracts from pharmacy benefit managers, said co-owner Robert Turnage. 

Turnage is one of many independent pharmacy owners in Mississippi who fear that if more stringent regulations are not imposed on pharmacy benefit managers, their businesses – some of the most accessible health care providers, particularly in rural parts of the state – may be forced to close. 

“Everyone here is on the verge of closing their doors if something drastic is not done,” Bob Lomenick, the owner and pharmacist at Tyson Drugs, Inc. in Holly Springs, told lawmakers at the House Select Committee on Prescription Drugs meeting Aug. 21 at the Capitol. The meeting room was filled with independent pharmacists who came from around the state to plead their case with legislators.

Pharmacy benefit managers are private companies that serve as the middlemen between pharmacies, drug manufacturers and insurers. They negotiate pricing and conditions for access to drugs, process prescription claims and manage retail pharmacy networks. 

A Federal Trade Commission report published in July sounded alarm bells about the companies’ “extraordinarily opaque” business practices and the considerable influence they exert upon independent pharmacies, or retail pharmacies not owned by a publicly traded company or affiliated with a large chain. 

Pharmacy benefit managers’ anti-competitive business practices have increased prescription drug costs and diminished access to medicine and patient choice about which pharmacy to patronize, the report said. 

U.S. Congress is also investigating the impact of pharmacy benefit managers’ business practices. 

There are about 380 independent pharmacies in Mississippi, said Robert Dozier, the executive director of the Mississippi Independent Pharmacy Association, an organization that advocates for the interests of 180 pharmacy members.

A significant portion of Mississippi’s population, especially in rural areas where chain pharmacies are less likely to exist, is reliant on independent pharmacies, said Meagan Rosenthal, an associate professor in the University of Mississippi’s Department of Pharmacy Administration. 

A pharmacy closure in a rural area is likely to create a pharmacy desert, or an area with limited or no access to a pharmacy. Research has shown that pharmacy closures have negative impacts on patients’ health, especially in medically underserved areas.  

Over 300 pharmacies closed nationwide in 2023, said Joel Kurzman, the director of state government affairs for the National Community Pharmacists Association, a national organization that advocates for independent pharmacies. 

“It’s a startling figure,” he said. 

Pharmacy technician Drew Luckett processes a prescription at Brandon Discount Drugs in Brandon, Miss., on Thursday, Oct. 3, 2024. Independent pharmacies are facing financial challenges due to reduced reimbursements from the companies that serve as middlemen between pharmacies, drug manufacturers and insurers. Credit: Eric Shelton/Mississippi Today

Shrinking reimbursements

Sharon Bonck, a pharmacist at Sartin’s Discount Drugs in Gulfport, said the rates pharmacies are paid for dispensing prescription drugs to patients with health insurance have dwindled over the past 10 years. In the past two or three years, however, the rates have become “disastrous” for business. 

Some prescriptions yield negative, or “underwater,” reimbursements, or payments from health insurance plans that are less than the pharmacy’s cost to acquire the drug. Others don’t earn a profit high enough to meet the pharmacy’s average operating expenses.

Pharmacy benefit managers set reimbursement rates for pharmacies by contract. But independent pharmacies often do not have the leverage to negotiate the terms of the contracts.

“I’ve never, never, not one time, been able to negotiate a contract,” said Lomenick. “It’s take it or leave it. If I don’t take it, I won’t have patients coming into my store.” 

Independent pharmacies are faced with a difficult decision: sign a contract that may not adequately compensate them for their service, or turn it down and lose customers. 

As reimbursement payments for some health insurance plans have waned, pharmacists have begun to more often choose the latter. 

Russell Love, the owner of Love’s Pharmacy, a chain of three pharmacies on the coast, said he stopped filling prescriptions for patients with TRICARE, a health insurance program for military service members and their families, and Magnolia Health’s Ambetter health insurance this year, also due to low reimbursement rates. Beginning in 2025, he will not accept Medicare Part D plans. 

“A lot of veterans can’t get their meds at their local pharmacy,” said Todd Dear, associate director of the Mississippi Board of Pharmacy, at the legislative committee hearing Aug. 21. 

TRICARE prescription claims are managed by Express Scripts, one the three largest pharmacy benefit managers in the country. Together, CVS Caremark, Express Scripts and OptumRx managed 79 percent of prescription drug claims for about 270 million Americans in 2023, according to the Federal Trade Commission’s report. 

These three pharmacy benefit managers also own mail order and specialty pharmacies, health insurance plans, health care providers and companies that market and sell drugs, giving them “significant power over prescription drug access and prices,” wrote the federal agency’s findings. 

The report also indicated that in some cases, pharmacy benefit managers reimburse their affiliate pharmacies at higher rates for specialty, high-cost drugs than for unaffiliated pharmacies.

Express Scripts executives told lawmakers that pharmacy benefit managers work to negotiate rebates with drug manufacturers that result in cost savings for employers who sponsor health plans. 

“Pharmacy access is vital,” said Tony Grillo, Express Scripts’ vice president for supply chain finance. “We do need these independent pharmacists. There are a lot of communities in the state that are small and rural. There’s a lot of communities in this country that are small and rural. We need these pharmacies in our network. It’s not in our interest to put these folks out of business.”

Low reimbursement rates also impact what drugs Mississippians can access at independent pharmacies, like brand name drugs for diabetes and weight loss, including insulin, antidepressants and inhalers. 

GLP-1 drugs, which are used to treat type 2 diabetes and weight loss, have some of the most untenable reimbursement rates, said pharmacist Michelle Little, the owner of Freedom Pharmacy in Hattiesburg. The loss for pharmacies, paired with supply shortages, makes them difficult for patients to access.

Mississippi has some of the highest diabetes and obesity rates in the country. Fifteen percent of Mississippians have been diagnosed with diabetes, and 40% are obese. 

Little said she has been forced to turn patients away due to low reimbursement rates. 

“It breaks our heart,” she said. “…We’re not able to service our patients and customers like we have been in the past.”

Ryan Harper, owner of Brandon Discount Drugs, reviews a prescription at Brandon, Miss. pharmacy on Thursday, Oct. 3, 2024. Independent pharmacies like his are struggling financially because the companies that serve as middlemen between pharmacies, drug manufacturers and insurers have lowered the payments they receive for filling prescriptions covered by health insurance plans. Credit: Eric Shelton/Mississippi Today

Limited health care access

Pharmacies may choose not to fill a prescription due to low reimbursement rates, but in other cases, pharmacy benefit managers restrict which pharmacies insured patients can visit by creating pharmacy networks. 

Robert Turnage said some of his long-time patients’ insurance plans no longer allow them to fill their prescriptions at Turnage Drug Store. For Water Valley residents, that means a 60-minute round trip drive to Oxford, the closest town with major chain pharmacies. 

“That absolutely has consequences for patients,” said Rosenthal, who said patients may choose to go without their medication to avoid driving long distances. 

Pharmacies that participate in pharmacy benefit manager-designed networks usually agree to accept lower payments in exchange for a higher volume of patients, who are required to use an in-network pharmacy. 

Pharmacists fear being kicked out of pharmacy benefit managers’ networks as retaliation for lodging complaints with the Mississippi Board of Pharmacy, the board’s executive director Susan McCoy told lawmakers Aug. 21.

But more and more, she said, pharmacists are coming forward due to the precarious position of their business. 

“It’s getting desperate times,” McCoy said. “Our pharmacies are starting to come to us and say, ‘you know, it doesn’t matter if I get retaliated against, because I’m not going to be here anyway. Go ahead and do what you need to do to take action against the PBMs.’” 

Reform attempts in Mississippi

Three states have passed laws setting reimbursement floors for prescription drugs and requiring transparency of drug pricing, said Kurzman. Several other states have regulations for their state health plans. 

The Mississippi Legislature passed a law in 2020 that gave the Mississippi Board of Pharmacy additional authority to ensure that pharmacy benefit managers are following the law, including levying fines. 

The board completed an audit of Optum Rx this year – the first pharmacy benefit manager the board has audited – but has not yet released its findings.

It took several years for the board to hire staff to carry out the law and receive approval for budget increases due to the high cost of audits, said McCoy. 

But independent pharmacists say the law isn’t enough – setting minimum reimbursement rates and increasing price transparency are desperately needed reforms to ensure that pharmacies stay afloat. 

For the past several years, state lawmakers have proposed legislation to further regulate pharmacy benefit managers.

In 2023, a bill that would have set minimum reimbursements for prescriptions at the national average drug acquisition cost, or NADAC, died in the House Insurance Committee, chaired by Rep. Jerry Turner, R-Baldwyn. 

NADAC is a price index that approximates the amount pharmacies pay for prescription drugs. 

But pharmacists argue NADAC as a baseline is not enough, because it does not factor in pharmacists’ dispensing and operational costs. Arkansas, which uses a NADAC pricing model, will require pharmacy benefit managers to include dispensing fees in their reimbursements to pharmacies, as a result of an emergency rule passed in September.

A 2024 bill that would have increased pricing transparency and prohibited pharmacy benefit managers from retaliating against pharmacies or charging insurance plans or patients more than the amount they paid pharmacies for a prescription died during the legislative session.

The House Select Committee on Prescription Drugs will make recommendations to the state Legislature after several more hearings. 

“I’m optimistic that the State of Mississippi is going to do something,” said pharmacist Chris Bonner, the owner of Chris’ Pharmacy in Columbus. “It’s going to be too late for some people if they don’t do something soon.” 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

Mississippi Today

Bill to revise law for low-income pregnant women passes first legislative hurdle

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mississippitoday.org – Sophia Paffenroth – 2025-01-22 18:00:00

Low-income women would be able to access free prenatal care faster under a bill that passed the House Medicaid committee Wednesday. 

The same law passed the full Legislature last year, but never went into effect due to a discrepancy between what was written into state law and federal regulations for the program, called Medicaid pregnancy presumptive eligibility.

House Medicaid Chair Missy McGee, R-Hattiesburg, author of the bill, revised last year’s bill to remove the requirement women show proof of income. She is hopeful the policy will garner the same support it did last year when it overwhelmingly passed both chambers. 

House Medicaid Committee Chairwoman Missy McGee, R-Hattiesburg. (AP Photo/Rogelio V. Solis)

“CMS (The Centers for Medicare and Medicaid Services) had some issues that they really did not approve of in our law, and after we talked it through we realized that the changes they wanted to make do no harm to the intent of the Legislature, do no harm to the law itself, do not add any costs to the fiscal note of the program,” McGee said during the committee meeting. 

Changes include that a pregnant woman will only have to attest to her income – not provide paystubs – and will not have to provide proof of pregnancy. 

McGee’s bill also makes changes to the time frame for presumptive Medicaid eligibility. Last year’s legislation said women would only be eligible for 60 days under the policy, with the hopes that by the end of those 60 days her official Medicaid application would be approved. Federal guidelines already have a different timeframe baked in, which state lawmakers have included in this bill. 

The federal timeframe, now congruent with McGee’s bill, says a pregnant woman will be covered under presumptive eligibility until Medicaid approves her official application, however long that takes – as long as she submits a Medicaid application before the end of her second month of presumptive eligibility coverage. 

“Let’s say a woman comes in for January 1 and is presumed eligible. She has until February 28 to turn her application in,” McGee said, adding that if Medicaid took a month to approve her application, the pregnant woman would continue to be covered through March. 

Eligible women will be pregnant and have a household income up to 194% of the federal poverty level, or about $29,000 annually for an individual. 

The bill does not introduce an additional eligibility category or expand coverage. Rather, it simply allows pregnant women eligible for Medicaid to get into a doctor’s office earlier. That’s notable in Mississippi, where Medicaid eligibility is among the strictest in the country, and many individuals don’t qualify until they become pregnant. 

An expectant mother would need to fall under the following income levels to qualify for presumptive eligibility in 2025:

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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WATCH: Auditor Shad White calls Senate chairman ‘liar,’ threatens to sue during budget hearing

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mississippitoday.org – Taylor Vance – 2025-01-22 17:28:00

A Wednesday budget hearing for the State Auditor’s Office devolved into shouting and a tense back and forth that culminated in Auditor Shad White calling Sen. John Polk of Hattiesburg a liar and threatening to sue the legislator for defamation. 

In what would normally be a mundane meeting at the state Capitol, the Appropriations subcommittee hearing erupted over questions related to NFL hall of fame quarterback Brett Favre and a $2 million dollar consultant’s study White commissioned to determine ways state leaders could save money.

“You’re not a lawyer — this is not a cross examination,” White told Polk, the Republican who helps set his agency’s budget. 

The first argument between the two occurred when Polk questioned how White’s agency calculated the dollar figure for investigative fees and unpaid interest the auditor alleges Favre owes the state in connection to the state federal welfare scandal. 

“I’ve had several numbers people look at the court record and look at what you’re saying (Favre) owes, and nobody can make it come to your number,” Polk said. “Does that surprise you?” 

White did not address the specific instance of how the agency calculated the figure, but he said generally the agency tracks the number of hours certain investigators spend on a case. But White took issue that Polk was questioning that dollar figure at all. 

“I have never once been called before this body to testify before any sort of hearing on the DHS scandal,” White responded. “The largest public fraud in state history. And the first question I get in my time as state auditor from a state senator is ‘Hey did you get the Brett Favre number correct?’” 

The other major argument that erupted in the hearing was when Polk questioned a $2 million contract that White’s agency executed with Massachusetts-based consulting firm Boston Consulting Group to find wasteful spending in state agencies.

White believes the contract with the firm was necessary to determine how state leaders can trim the fat in state agencies. But Polk has questioned whether auditor skirted the appropriations process by not getting legislative or gubernatorial approval to conduct the study, and whether the study was more to help White’s future political ambitions than address government spending..

Polk alleged that White did not conduct a proper Request for Proposal, a process government bodies use to solicit services from private companies. The process is used to encourage competition among businesses and net the lowest price. 

“You are a liar,” White said of Polk. “You’re making this up right now.” 

Polk responded that the Department of Finance and Administration told him White’s agency did not use an RFP. 

The Forest County lawmaker also asked White if any of his family members had worked for Boston Consulting Group. The auditor said no and if Polk insinuated that any of his family had, then he would sue the legislator for defamation. 

“This line of questioning feels less about policy and it feels more about politics to me,” White said. “That’s exactly what it feels like. I’ve never been questioned on an audit like this right up until the moment where the lieutenant governor thinks I might be the thing standing between him and the governor’s office.” 

Both White and Republican Lt. Gov. Delbert Hosemann have publicly said they’re considering running for governor in 2027. Hosemann, the presiding officer of the Senate, appoints senators to lead committees. 

Polk told Mississippi Today in an interview that Hosemann had not directed him to ask any specific question, and the lieutenant governor gives deference to committee leaders on how to manage committee functions. Rather, Polk said he was the one who originally raised his concerns with Hosemann. 

Polk said his line of questioning simply stemmed from his role on the money-spending Appropriations Committee, which sets his agency’s budget, and was to ensure that White’s agency was spending money efficiently. 

“So that’s my only thing here — is to make sure the citizens of Mississippi and the taxpayers of Mississippi get their money’s worth from you or anyone else in state government,” Polk said. “And I’ll be honest with you, your calling me a liar previously is so uncalled for.” 

Polk recently requested and received an attorney general’s opinion that said White overstepped his authority in hiring the consultant for $2 million. An AG opinion does not carry the force of law, but serves as a legal guideline for public officials.

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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Jackson State faculty senate president sues for wrongful termination

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mississippitoday.org – Molly Minta – 2025-01-22 17:00:00

The Jackson State University’s president and governing board are facing a lawsuit from the faculty senate president who last fall was placed on leave pending termination. 

Dawn McLin’s lawsuit comes more than two months after a faculty panel reviewed the university’s basis for her termination and recommended she be reinstated to her position as a psychology professor. 

But the university’s president, Marcus Thompson, has yet to respond to the panel’s recommendation, putting McLin in what she alleges is a state of limbo meant to force her to resign. 

“Their intentional delay prevents Dr. McLin’s reinstatement and continued oversight of her research grants while, at the same time, rendering it impossible for Dr. McLin to pursue alternative employment in academia,” the lawsuit states. 

McLin has received support from the Jackson State faculty senate, as well as state and national organizations that support academic freedom, including the American Association of University Professors. Thompson has ignored multiple letters from the professional organization, which has called his delay in reinstating McLin as “extremely disturbing.”  

A Jackson State spokesperson did not respond to a request for comment by press time. A spokesperson for the Institutions of Higher Learning Board of Trustees said the board does not comment on pending litigation.

McLin’s lawsuit is not the only legal action that Thompson is contending with on the heels of his first year as president of Mississippi’s largest historically Black university. A federal judge recently allowed a former administrator’s lawsuit against IHL for hiring Thompson to proceed, prompting individual trustees to appeal the decision to the 5th U.S. Court of Appeals.

This month, another former administrator named Linda Rush filed a lawsuit alleging discrimination when Thompson demoted her to hire a less-experienced man, Kylon Alford-Windfield, to lead the university’s division of enrollment management. Sixty days later, the lawsuit claims, Alford-Windfield fired Rush without cause. 

Reached for comment, Alford-Windfield said he had not read the lawsuit before murmuring “hm, that’s funny” after a reporter described the complaint. 

A ‘sham investigation’ in retaliation

McLin’s lawsuit alleges that Jackson State undertook a “sham investigation” at IHL’s behest to remove her from the university after she oversaw repeated no-confidence votes in the administration. 

This prompted an associate provost named Brandi Newkirk-Turner to “seek revenge” through her close relationship with Thompson and the IHL commissioner, Alfred Rankins, according to the lawsuit. 

On Aug. 1, shortly after McLin’s contract was renewed, she was given a letter from Thompson stating his intent to terminate her for cause, including “hostile conduct, bullying, harassment and intimidation of fellow JSU employees (including those over whom you have no supervisory responsibilities), interference in the re-accreditation process, abuse of your position as president of the Faculty Senate, and interference in departmental business operations.” 

Though Thompson stated multiple grievances and complaints had been filed against McLin, his letter named just one specific example, a time when McLin allegedly turned her chair in a “show of disrespect” to a faculty member who was giving a presentation. 

That professor was Newkirk-Turner, McLin alleged in the lawsuit. 

When McLin requested a hearing in front of a faculty panel, Jackson State took over six weeks to respond, the lawsuit alleges, even though university policies state that when an employee is suspended or placed on leave, an investigation must move forward as quickly as possible. 

The university allegedly gave McLin 10 days to prepare for the hearing, but refused to provide her employment contracts, post-tenure reviews, personnel file or the investigative file underpinning her termination. 

During the hearing, McLin’s attorney was not allowed to speak on her behalf, even though Jackson State appeared to the panel through an attorney named Charles Winfield, the lawsuit alleges. 

Winfield did not present any witnesses to support the university’s allegations, the lawsuit states. It is unclear if he presented more allegations against McLin than Thompson’s letter did. 

The faculty panel ultimately found that Thompson’s firing of McLin was “retaliatory in nature, ultimately promoted by [Dr. Newkirk-Turner], and moved along by a ‘fact finding mission’ initiated by IHL.”

Demoted, then allegedly fired without reason

When Thompson was named president by the IHL board, a longtime administrator at Jackson State named Linda Rush was serving as the interim vice president for enrollment management.

Rush, who had worked at Jackson State for more than 25 years, allegedly told Thompson she wanted to remain in the position. Thompson praised her contributions to the university, calling her “a gift” who “will not be going anywhere because she is JSU.” 

But in mid-January, Thompson demoted Rush to executive director of admissions, hiring in her place Alford-Windfield, who had about five years of experience in higher education, the lawsuit alleges. 

Thompson and Alford-Windfield were connected: The two were candidates in Jackson State’s executive doctoral program in urban higher education. Days after Thompson’s appointment as president, he went on an international trip with Alford-Windfield and other students from the program. 

After that, Rush alleges that Alford-Windfield left her to perform all aspects of his job, including preparing his cabinet reports and speaking notes, while he posted daily Instagram stories.

Sixty days later, Alford-Windfield fired Rush without reason, offered to write her a letter of recommendation and had her escorted from campus. 

This article first appeared on Mississippi Today and is republished here under a Creative Commons license.

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