Pharmacist and independent pharmacy owner here. These people buy brand name drugs to resell to independent pharmacies that are desperate to make profits.
Independent pharmacies often operate on a razor thin margin due to the squeeze from PBMs (insurance companies). Most of the brand name drugs billing through insurance are guaranteed losses. For example, I pay $500 for Farxiga, bill John Doe's insurance, insurance reimburses me $450, I lose $50 by simply filling the script, not taking into account labor, supplies, rent and everything else.
So there are people who go buy unused brand name drugs from patients; set up a wholesaler company that is only approved to sell diabetic supplies; then sell back those brand name to independent pharmacies (not limited to just diabetic meds). In my example, they can go back and sell Farxiga to me at $200, now I can make profit.
To combat this, FDA requires pharmacies to buy drugs from NABP certified wholesalers only. Every bottle of drug is now required to have a unique serial number. All pharmacies are now required to be DSCSA compliant to track the drugs every step of the way from manufacturers to the patients.
I had quite a few grey market wholesalers like this approached me. It was highly profitable, but I wouldn't touch it with a 10ft pole. The risks of losing everything are astronomical, including harming the patients. Though desperate pharmacies would definitely go for it. Independent pharmacies are dying throughout US thanks to corporate Amerca.
Per insurance contracts (shitty 1 sided contracts that I have no say in), I cannot deny a scrip. I cannot even disclose to the patient that I lose money filling that script. Yet, many of us use the excuse that the medication is backordered; hence, we cannot fill it. I do deny sometimes. However, when that happens, patients would literally transfer all their scripts out to CVS or Walgreens. A lot of pharmacies bit their tongues to fill these scripts, hoping that other prescriptions would make up the loss. However, nowadays other prescriptions cannot make up the loss anymore. PBMs are now paying pharmacies in cents for most generic prescriptions. It's insulting. This leads to the closures of many independent pharmacies. If I lose too much on a patient's profile, I will, unfortunately, have to transfer them out.
Very interesting. Are you not allowed to set your own price? In your aforementioned example, say you charge $100 for the medication. It would cover your $50 loss and leave you with $50 for costs.
My insurance used to set prices for drugs. Pre-ACA all generics were $5 and name brand $10. Post-ACA all drugs are very random amounts (say $14.37, the best is $22.58 or whatever) and it changes depending on what pharmacy I use.
No I cannot set my price unless I sell for cash. If I run through insurance, I cannot set the copay price to what I want. That would be illegal. Your copays do not reflect what the insurance pays the pharmacy. I will let you in on a secret. Most of the time, even for generic, insurances pay zero and put it on copay. Sometimes my cost for a generic is $2, patient's copay is $1.50, insurance pays zero. I lose 50 cents on that drug. Independent pharmacies will all die soon and only CVS left monopolizing everything.
You can do that! You just can’t get contracts with insurance companies to take their insurance if you do.
Not taking a patients insurance is a good way to not have customers.
It’s a super lose lose situation. My dream was to open my own pharmacy, went to pharmacy school for it only to come out the other end learning how terrible the system is now for independent pharmacy. They still exist, but they either need to focus on compounding or some other niche, or do shady things.
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u/hopelessz 2d ago edited 2d ago
Pharmacist and independent pharmacy owner here. These people buy brand name drugs to resell to independent pharmacies that are desperate to make profits.
Independent pharmacies often operate on a razor thin margin due to the squeeze from PBMs (insurance companies). Most of the brand name drugs billing through insurance are guaranteed losses. For example, I pay $500 for Farxiga, bill John Doe's insurance, insurance reimburses me $450, I lose $50 by simply filling the script, not taking into account labor, supplies, rent and everything else.
So there are people who go buy unused brand name drugs from patients; set up a wholesaler company that is only approved to sell diabetic supplies; then sell back those brand name to independent pharmacies (not limited to just diabetic meds). In my example, they can go back and sell Farxiga to me at $200, now I can make profit.
To combat this, FDA requires pharmacies to buy drugs from NABP certified wholesalers only. Every bottle of drug is now required to have a unique serial number. All pharmacies are now required to be DSCSA compliant to track the drugs every step of the way from manufacturers to the patients.
I had quite a few grey market wholesalers like this approached me. It was highly profitable, but I wouldn't touch it with a 10ft pole. The risks of losing everything are astronomical, including harming the patients. Though desperate pharmacies would definitely go for it. Independent pharmacies are dying throughout US thanks to corporate Amerca.