Even without the saturation issues, pharmacy (in particular independents) is completely screwed already thanks to the PBM reimbursement squeeze. There is NO hope for independents (and even some large chains, i.e. Target, lol) without massive PBM reform.
To all of you future pharmacists, let me ask you a very simple question. How in the h#ll are you going to operate a pharmacy profitably on an average 3.00 margin. Please do the math (factor in pharmacist salary, tech salary, benefits, rent, overhead etc) Ive done it and the ONLY answer is to SLASH the pharmacist salary. How many scripts can 1 pharm and 3 tech reasonably do in an 8 hour period? 250? 400 with a robot? Even if you assume its 400, you got $1,200 dollars net profit to play with.
For those of you who say a 3.00 margin is impossibly low and will never happen, consider already that on some plans that I take (Cigna, Humana, ESI) the reimbursement has essentially come down to MAC (which means your Acq. Cost) + an absurdly low Dispensing fee (just got a contract reinstatement letter for MAC + 0.45 Disp Fee, and AWP minus 18.5 plus 0.45)
On my Cigna claims, I make 1.54 profit margin/rx averaged over 1,200 scripts Year to Date.
What do the PBMs say about it? "If you don't like the payment terms, don't sign the contract". They couldn't give 2 f*cks whether or not you are in their network. In many cases, they collect even larger margins on rxs themselves vs what the actual pharmacy gets (the spread between what the PBM pays the pharmacy , usually MAC, vs what the PBM bills the plan sponsor, usually AWP minus a percentage). What kind of service is the PBM providing to justify this? The plan sponsors are taking it up the butt just as much as the pharmacies are, however the lack of PBM transparency makes it very easy for PBMs to hide this spread. This comes on top of collecting fee per prescription.
Has anyone else seen the latest (and in my mind, the most outrageous) PBM tactic involving charging the full copay to the patient (lets say its 8.00 for generic), yet reimbursing the pharmacy at MAC price (might be 2 or 3 dollars depending on the drug) and pocketing the difference in the form of a NEGATIVE third party reimbursement? That's right. I collect the patient copay of 8.00, then turn around and hand 5 of that straight over to the PBM. All the while, the patient is completely clueless about this, as in his/her mind they just paid 8.00 for the prescription, without realizing that they actually paid 3 dollars for the prescription and paid 5 to OptumRX. This disgusting practice can only be classified as nothing more than pure, unadulterated, corporate greed. The PBMs have you by the balls and they know that there is not a d#mn thing you can do about it.
How about back-end DIR fees? Look this up if you don't know about it. CVS Caremark's Silverscript plan charges a 3% DIR Fee on ALL brand claims, effectively erasing the small profit that the pharmacy made. On a 300 dollar brand name medication, you may appear to make a 12 dollar profit, only to have 9 dollars stolen back in the form of a DIR fee. Thankfully this practice should be coming to an end in 2016, however that only means that the discount off AWP will become even greater. Its all a huge scam.
So what does the future hold? Its is completely and utterly doomed. I see no realistic way to change this. The PBMs are too powerful. The only silver lining is that if enough prospective pharmacists do their due diligence and study the outlook of the profession first, and realize that the profession is dying, and then stay the H#LL away from pharmacy school, the forecasted pharmacist surplus might not become as dire as it looks now.
As I see it, in 10 years I expect the average retail pharmacist pay to be somewhere around 60K, even after adjusting for inflation.
Of course with retail salaries this low, others will follow or go even lower, since salaries are always "market based". This includes the Sellout PharmD's working for PBMs who are ultimately shooting themselves in the foot, along with the rest of the profession which they obviously loathe.
Wake up people.
