Local Pharmacies Under Pressure

I received a letter from my group insurance company yesterday informing me that I could no longer fill a prescription at a retail pharmacy and receive benefits.  Instead, I could fill it through the group owned mail order pharmacy or switch to a generic drug.  This for a well known branded drug.

The explanation I received was from the “in an effort to control drug costs” category, but after thinking about it longer it raises the question of why this drug?  Presumably the insurance company has contracted with my local pharmacy (a national chain) on pricing, so I pay the difference.  Why is my group insurer so concerned with the premium I pay over their reimbursement rate to my local pharmacy.  The only reason I could come up with is that they no longer like their contracted reimbursement price and perhaps were able to negotiate a better rate through their own group owned mail order pharmacy.

The implications of this example are obvious in the emerging new healthcare order.  My choices are being limited by being forced to either change suppliers, switch to a generic, or receive no benefits.   We can logically extend this example over time from drugs to doctors to hospitals.  As health insurance slowly becomes nationalized every dollar squeezed out of the system becomes critical.  You may be able to achieve the same result, but you’ll have to do it their way.


About Mike

Mike has been an executive in the biotechnology industry for the past 20 years. Mike is a graduate of University of California, Santa Barbara, earning Bachelors degrees in Business Economics and Geography. Mike also earned his MBA in Finance from California State University, Fresno. Mike is married to the mother of his 3 children and currently lives outside of Boulder, CO. In his spare time Mike enjoys hiking, fishing, skiing, reading and coaching basketball.
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