Investor Presentaiton
remote areas, but do not provide the same in-person care as community pharmacies. Sometimes there
are issues with timely deliveries, which can be critical for people on certain medications.
Low or unfair reimbursement rates have been cited as a key factor for pharmacy closures. A national
study in 2020 found the average cost for pharmacies to dispense each prescription was over $12.24
Most of this cost is to support employment of pharmacists and technicians. Pharmacists report
inconsistent reimbursements make it challenging to adequately staff and resource retail pharmacies.
Pharmacists we interviewed noted there are some prescriptions they lose money on, some they make
a little profit on, and a small number they make a significant amount of profit on. PBMs can set
pharmacy reimbursement rates, which can vary significantly between drugs and pharmacy types.
Figure 13: CCOs reported spending $767 million on prescription drugs in 2021
Emergency room
$226 $251
Mental health
Hospital-outpatient
Prescription drugs
Hospital- inpatient
Physician/professional services
$0
$506
$642
$523 $649
$658 $767
in millions
$698
$949
2019
2021
$989
$1,191
$1,200
Source: OHA publicly reported financial data
Other states have provisions in statute to address this issue. For instance, Kentucky prohibits PBMs
from reducing the amount reimbursed on a claim to effective rates; other states require the use of
National Average Drug Acquisition Costs as a basis for reimbursement when available. Arizona requires
PBMs to disclose the methodology for maximum allowable cost lists to provider pharmacies. Oregon
has no such provisions in statute. In some states these middlemen have been removed entirely from
their Medicaid coordinated care programs.
We analyzed 316,755 Medicaid claims to assess how pharmacy reimbursements may vary. Of the claims
we tested, 69% were far below the $12 average cited in the 2020 study. In our testing, more frequently
dispensed drugs — like metformin and omeprazole - tended to have much lower estimated pharmacy
profits than less frequently dispensed medications. For the 13 drugs tested, the average estimated
profit was $7.16 per claim, which likely is not enough to cover labor and other operating costs.
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24 See the 2020 Cost of Dispensing Study commissioned by national pharmacy associations.
Oregon Secretary of State Report 2023-25 | August 2023 | page 20View entire presentation