Independent pharmacies like Murray's Drug face unprecedented challenges

State and federal lawmakers look to fix broken system that favors corporate middle-men

Oregon pharmacies are in trouble. And none are in a more precarious situation than the mom-and-pop drug stores that once defined the industry.

Small-town, family-owned, and multi-generational pharmacies like Murray's Drug are at the forefront of a fight to push back against corporate greed, that many say is responsible for a monopoly on prescription drugs.

John and Ann Murray are the owners of Murray's Drug – which was started by John's parents, Rod and Meg Murray in 1959. John and Ann took over in 1990 and now employ two of their kids, Laurie and Sean. The Murrays own pharmacies in Heppner, Condon, and Boardman and have gotten significant press in recent weeks - as lawmakers and healthcare advocates search for solutions to an emerging crisis.

Corporate middlemen known as Pharmacy Benefit Managers (PBMs), which are owned by corporate giants like CVS and United Healthcare, have essentially ravaged the industry.

In 2023, the United States saw a significant decline in the number of pharmacies, with approximately 4,550 fewer establishments than a decade earlier, according to the National Community Pharmacists Association. Industry analysts caution that these figures do not fully capture the adverse impact on smaller, independent pharmacies. In February, the trade group warned that several thousand more local pharmacies-up to a third of its members-could face closure this year.

Oregon, in particular, is feeling the pinch. According to a new analysis by the Associated Press, Oregon ranks second to last in the nation for retail pharmacies per capita, with only Alaska having poorer access. Last year, 36 pharmacies closed in Oregon, and several more have shuttered their doors in 2024.

Independent providers attribute this trend to the practices of powerful pharmacy benefit managers (PBMs). These PBMs are accused of squeezing the reimbursement rates for independent pharmacies, making it difficult for them to stay afloat.

A recent audit revealed that national pharmacy chains were reimbursed at twice the rate of independent pharmacies for certain drugs. This disparity highlights the uneven playing field and the struggles faced by smaller providers.

The field of pharmacy itself is experiencing a downturn, with only 13,323 new pharmacists graduating in 2022, down from 14,223 the previous year. This represents the largest drop in new graduates since 1983, indicating a waning interest in the profession amidst challenging industry conditions.

These challenges have prompted retail giants to close underperforming brick-and-mortar stores and pivot towards mail-order services.

Ann Murray, who owns Murray's Drug with her husband John Murray, told OPB that mail-order pharmacies cannot provide the same level of service. At local independent pharmacies, like Murray's Drug, staff are familiar with patients and take extra time to look at side effects and potential dangers of prescribed medications. Opponents of the rapidly growing mail-order prescription chains say that mail-ordered prescriptions can be dangerous. The industry is fairly new and has little oversight. There have been growing concerns that patients are being prescribed medications by profit-fueled online doctors, that don't adequately assess the risks posed to patients.

Most mail-order pharmacies use PBMs from CVS and United Healthcare, as do pharmacies in large box stores like Walmart.

The playing field for independent pharmacies has continued to be skewed.

In response, the Oregon Legislature passed House Bill 4149, which tightens regulations on PBMs. Co-Sponsored by Rep. Greg Smith (R-Heppner), the bill mandates that these pharmaceutical middlemen apply for state licensing, among other new rules, to ensure greater accountability and fairness in the industry.

On a national level, Senators Ron Wyden (D-Oregon) and Mike Crapo (R-Idaho) of the Senate Finance Committee have reached a bipartisan agreement to crack down on PBMs. Their proposed legislation aims to strengthen disclosure requirements, ensuring that PBMs reveal their compensation and business practices to healthcare plan fiduciaries. This move is designed to guarantee that employers and their employees are aware of the insurance products being negotiated on their behalf, aiming to curb the hidden profits and bonuses that contribute to higher costs for patients.

In the House, Representatives Joe Courtney (D-CT) and Erin Houchin (R-IN) have also introduced legislation targeting PBMs. Their proposal seeks to enforce stricter compliance with existing rules, ensuring that PBMs disclose the profits they make from deals with drug companies. The goal is to promote transparency and protect consumers from the inflated costs associated with these opaque practices.

As the pharmacy landscape continues to deteriorate, these legislative efforts represent crucial steps towards leveling the playing field and safeguarding the future of independent pharmacies.

But with Congress awash in lobbying money from healthcare giants like United Healthcare, there is concern that a final bill will not make it to the President's desk.

In the meantime, advocates for independent pharmacies say that patronage of local drug stores is the best way for consumers to take action.

The National Community Pharmacists Association says that customers do have power. "Your local independent pharmacists are your most accessible health care professionals and take the time to truly connect and consult with each patient they serve," the association said.

By shopping local and avoiding chains like CVS and pharmacies in box stores, local pharmacies like Murray's Drug will continue to have a central place in our communities -hopefully for generations to come.


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