3 ms·

Why were pharmacies viable before? Presumably they didn't lose money for their whole history.

43920 2mo ago
Most pharmacies are having financial issues basically due to being stuck in the middle of the battle between insurers, drug manufacturers, and PBMs over reimbursement rates, and having the weakest negotiating position of all of the parties. AI probably will save the pharmacies some money, but IMO this will probably cause reimbursement rates to decline further, leaving the pharmacies in the same position as before.
- taurath 2mo ago
  Weakest negotiating position other than the customers. The funny part is probably a majority of pharmacies are owned by CVS or Walgreens each of which are insurance companies in their own right, and often people with company health insurance will ONLY allow reimbursements through their company pharmacy.
- Scoundreller 2mo ago
  Tbh, this is most industries. Very few have much of a moat and have some wedge/pressure from their suppliers (land/labor/capital), their clients and competition. Insurance companies and PBMs would probably say the same they have competitors (ie:replaceable) and can’t just pay more for this or that, or reject any cost saving measure available.
jonathan-adly 2mo ago
https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.0... Of the 88,930 retail pharmacies operating during 2010–20, 29.4 percent had closed by 2021.
- nickphx 2mo ago
  and that was not due to answering phones .. adding a nondeterministic black box of bullshit will change nothing.
milkshakes 2mo ago
see: https://en.wikipedia.org/wiki/Pharmacy_benefit_management https://en.wikipedia.org/wiki/Pharmacy_benefit_management
quickthrowman 2mo ago
PBMs gained control of drug pricing and squeezed out the small pharmacies that don’t offer additional services like compounding. CVS And Walgreens both own and operate PBMs. And UHG (Optum), 19 Blue Cross plans collectively own Prime Therapeutics, Kaiser owns one, the DVA has one, Express Scripts is owned by Cigna. There’s likely more I am unfamiliar with too.

43920 2mo ago

Most pharmacies are having financial issues basically due to being stuck in the middle of the battle between insurers, drug manufacturers, and PBMs over reimbursement rates, and having the weakest negotiating position of all of the parties. AI probably will save the pharmacies some money, but IMO this will probably cause reimbursement rates to decline further, leaving the pharmacies in the same position as before.

taurath 2mo ago
Weakest negotiating position other than the customers. The funny part is probably a majority of pharmacies are owned by CVS or Walgreens each of which are insurance companies in their own right, and often people with company health insurance will ONLY allow reimbursements through their company pharmacy.
Scoundreller 2mo ago
Tbh, this is most industries. Very few have much of a moat and have some wedge/pressure from their suppliers (land/labor/capital), their clients and competition. Insurance companies and PBMs would probably say the same they have competitors (ie:replaceable) and can’t just pay more for this or that, or reject any cost saving measure available.

jonathan-adly 2mo ago

https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.00192 https://www.healthaffairs.org/doi/abs/10.1377/hlthaff.2024.0... Of the 88,930 retail pharmacies operating during 2010–20, 29.4 percent had closed by 2021.

nickphx 2mo ago
and that was not due to answering phones .. adding a nondeterministic black box of bullshit will change nothing.

milkshakes 2mo ago

see: https://en.wikipedia.org/wiki/Pharmacy_benefit_management https://en.wikipedia.org/wiki/Pharmacy_benefit_management

quickthrowman 2mo ago

PBMs gained control of drug pricing and squeezed out the small pharmacies that don’t offer additional services like compounding. CVS And Walgreens both own and operate PBMs. And UHG (Optum), 19 Blue Cross plans collectively own Prime Therapeutics, Kaiser owns one, the DVA has one, Express Scripts is owned by Cigna. There’s likely more I am unfamiliar with too.