Why discount cards are challenging for independent pharmacies

Editor’s Note: This story provides additional context to the September 2023 cover story, “In the Cards,” which readers can find here. 

While pharmacy retailers concede that prescription discount cards can drive traffic into their stores, they can carve away the already thin margins of many independent pharmacy operators. This has led many independents to decline to accept the cards.

“In a lot of cases these discount cards actually make more off the prescription than the pharmacy does, which makes no sense,” said Patrick Berryman, senior VP and chief operating officer at the National Community Pharmacists Association.

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Pharmacies are being reimbursed at a low contracted rate, which may be only pennies, while the discount card could be recouping multiple dollars, he said. In addition, the card companies charge pharmacies a fee for accepting the card, which they then split with the PBM that they work with to provide the discount.

“There are also patient data concerns, because in most of these cases, these are the pharmacies’ patients, and the pharmacies are concerned about where that data goes,” said Berryman. “They're concerned with what these companies are doing with the patient's data because they're getting the patient information, they're getting the drugs they're on, etc. They're concerned that data may be going places it shouldn't be going and it's getting sold.”

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In addition, some of the discount cards either don’t work with independents, or treat independents differently than they do large chains, he said. Some cards, for example, require that in order for a pharmacy to be listed in their pharmacy locator service, they need to be certified by the National Association of Boards of Pharmacy, which may be too expensive for many independents.

In addition, some of the cards also promote the mail-order services of the PBMs they work with, Berryman said. They often also promote telehealth, which may conflict with the relationships that independent pharmacies have with local physicians, he said.

“We just encourage patients to ask their pharmacists, and shop around and ask what the cash price is,” said Berryman. “That’s how patients can do the best, frankly.”