Vincent Mazzamuto is at a crossroads with his pharmacy. It’s either lay off employees, or risk shutting down.
But it’s not that simple.
Mazzamuto and Adam Agovino took over Sedgwick Pharmacy, a local business that has been a staple in Van Cortlandt Village for more than 40 years, in 2004. In recent years, the two owners realized Sedgwick Pharmacy was in real danger of closing its 3887 Sedgwick Ave., location because of the very thing that keeps them open in the first place: prescription drugs.
“While most businesses purchase inventory and recoup those costs when they sell to customers, the prescription drug system is very different,” Mazzamuto said. “Pharmacies have no say in what patients pay for drugs.”
That’s where pharmacy benefit managers, also known as PBMs, come in. PBMs are essentially middlemen who negotiate drug prices with manufacturers as well as how much pharmacies are reimbursed, more often than not producing high drug prices for customers.
Reimbursements have been so low within the last few years that independent pharmacies are sometimes unable to meet simple costs like purchasing bottles to place prescription pills in, paying workers, or even cutting a check for rent.
The New York City Pharmacists Society, an organization under the Pharmacists Society of the State of New York that seeks to protect and support independent pharmacies and pharmacists, conducted a survey in January finding 70 percent of city pharmacy owners were forced to either reduce store hours or lay off employees last year because of low PBM reimbursements. This year, 92 percent of pharmacy owners are seriously considering making these drastic changes.
Roger Paganelli, a third-generation pharmacist in Belmont who serves on the board of the city pharmacists society, says he expected such results.
“I’d like to say that I was stunned, but I wasn’t stunned,” he said. “I was well aware because I myself am feeling the crunch of the PBMs’ abusive practices. I’ve had to lay off some employees — not cut back hours yet, but considering so.
“I can’t reconcile of having to go to an employee and tell them, ‘Listen, we can’t keep you on board anymore because the pressures from the pharmaceutical benefit managers don’t pay us.’ It’s a difficult thing to deal with.”
Over at Sedgwick Pharmacy, Mazzamuto feels the same. While the local business has cut store hours in recent months, Mazzamuto still weighs the decision of whether he’ll need to resort to staff cuts as well, especially as drug reimbursements continue to shrink.
“I don’t know how you can make it up,” he said. “We’re at the whim of the PBMs. If you get underpaid for a product, you can’t recoup that. So the only alternative now is to start analyzing your business and see where you could cut costs.”
Stella Borukhova, owner of Riverdale Specialty Pharmacy also faces the threat of cutting store hours and laying off employees. When she opened up shop at 3547 Johnson Ave., last year, dealing with PBMs was something she wasn’t looking forward to.
“They really control the market by forcing patients to go to (a) specific pharmacy and limiting their choices,” Borukhova said.
While PBMs and the threat of independent pharmacies becoming endangered species is a nationwide issue, people like Paganelli and the New York City Pharmacists Society are trying to bring awareness of the issue to lawmakers in Albany.
Late last year, more than 500 independent pharmacy owners launched FixRx, a campaign to regulate PBM practices and their negative impact on local pharmacies.
And just last month, the state senate stood with Gov. Andrew Cuomo to call for this regulation.
“That’s what we see as our mission right now,” Paganelli said. “Get the PBMs out in the open so that the public can know about them (and) the legislators can know about them.”
Mazzamuto hopes a change statewide will alleviate the issues he faces as a pharmacy owner, and in turn help those struggling to afford prescription drugs.
“We as pharmacists feel that we are the first in line at health care,” he said. “When a patient has some sort of issue, the tendency is to go to your pharmacy. To have that jeopardized is something that really hurts us as community pharmacists.”
As for the patients who rely on independent pharmacies for their medications, Borukhova hopes they know how much pharmacists care, especially with the risks in speaking out against PBMs.
“I want them to know we’re here for them to make sure they get what they need and get the prescription drugs at the best cost possible,” she said. “But the way to do it is let legislators know, to get these proposals out there that prohibits drug pricing, and to be able to monitor (it), because there’s no monitoring these PBMs.”