House Report Accuses CVS of Antitrust Tactics, Dispensing GLP-1s Is Now a Financial Loss, Health System/Insurer Negotiations Devolve Into Finger Pointing Theater

Hey all, 

Happy Tuesday! If you were under the impression that healthcare was a collaborative effort to heal the sick, this week’s headlines suggest it’s actually a cage match where hospitals and insurers use patient anxiety as a folding chair to smack each other over contract terms. While the giants brawl in public, independent pharmacies are realizing that the most fiscally responsible business strategy is to simply stop filling prescriptions entirely, especially while conglomerates like CVS are allegedly busy ensuring the game is rigged against anyone else trying to play. Ultimately, we have built a system where the only thing rising faster than the cost of care is the audacity of the middlemen managing it.

Enjoy the rundown!

Jacob Brody (Co-Founder and CEO, ZorroRX)

(Fierce Healthcare) House Report Alleges CVS Aimed to Stifle Pharmacy Hub Competition

A new report from the House Judiciary Committee accuses CVS Health of potentially violating antitrust laws by modifying network policies to prevent independent pharmacies from utilizing alternative pharmacy-hub options. The investigation, based on internal documents, claims CVS sent cease-and-desist letters and leveraged its market scale to hinder competitors in the digital pharmacy space. In a development that is sure to shock absolutely no one, it turns out the massive healthcare conglomerate might actually enjoy using its immense power to crush the little guys and avoid pesky things like fair competition. Full Article

(Drugstore Cowboy) The Broken Economics of Independent Pharmacy

Alec Ginsberg reveals the stark financial reality of running C.O. Bigelow, showing that despite aggressive purchasing strategies and high volume, the pharmacy realized a meager 8.7% gross margin on insurance prescriptions while incurring actual losses on GLP-1s. The data highlights a 0.17% profit margin on brand drugs, proving that expensive medications are not profit centers but financial landmines that barely cover the cost of the vial. At this point, it seems the most fiscally responsible move for a pharmacy owner is to simply stop filling prescriptions and put their cash into a Treasury bill, since the current system has turned dispensing life-saving medicine into a strictly volunteer activity for the benefit of insurance companies. Full Article.

(Health is Other People) The Increasing Drama of Public Healthcare Contract Disputes

Recent trends reveal that contract negotiations between hospitals and insurers are increasingly spilling into the public sphere, utilizing media campaigns and patient anxiety as leverage in high-stakes financial stalemates. Using the contentious dispute between UMass Memorial and Blue Cross of Massachusetts as a case study, the author illustrates how shared financial instability is driving these corporate "marriages" toward acrimonious public battles where neither side can afford to walk away. Ultimately, it seems the only thing keeping these toxic corporate couples together is the mutual realization that a divorce would be too expensive, leaving patients to play the role of the traumatized children awkwardly staring at the floor while Mom and Dad scream about money in the driveway. Full Article