NCPA survey finds majority of local pharmacies need small business federal aid
Nearly 90% of community pharmacies will apply for small business federal aid under the CARES Act to help them get through the coronavirus storm, according to a new survey released Monday by the National Community Pharmacists Association.
“Pharmacies are ‘essential businesses’ staying open during the COVID-19 pandemic to keep serving their communities, but many are on the brink at the very time they are needed most,” said Doug Hoey, NCPA's CEO. “In the 18 months before this crisis, the number of pharmacies had shrunk by over 2,000, mostly due to low reimbursement from pharmacy benefit managers. Ten million patients lost the pharmacy of their choice in just over a year, a staggering number that will only grow during the pandemic recovery if pharmacies don’t have relief from below-cost PBM reimbursements so they can be there into the future.”
As the pandemic strains neighborhood pharmacies, nearly half of pharmacy owners rank the overall financial health of their business as somewhat poor or very poor, according to the survey.
Eighty-five percent of independent pharmacies report seeing an increase in the number of products reimbursed below acquisition cost since March 1, forcing them to dispense more prescriptions at a loss. Additionally, 66% are experiencing negative cash flow issues as pharmacy DIR fees, decreasing reimbursement and coronavirus-related expenses make it difficult to stay in business. Half of pharmacy owners reported paying more than $10,000 in pharmacy DIR fees since March 1. If this pace continues, the average independent pharmacy will be on track to have approximately $100,000 clawed back in the next 12 months.
“Some of the most vulnerable patients and communities rely on the safety net that is local pharmacy,” Hoey said. “Small businesses are the economic backbone of the U.S. economy. The Trump administration and Congress must work together to authorize additional funds for the Paycheck Protection Program, support America’s small business economy, and help the pharmacy safety net serve communities in normal times and in times of crisis.”
The NCPA survey was conducted from April 9 to14. It was sent to approximately 8,000 independent pharmacy owners and managers, with approximately 510 responding.