Weight-Loss Drugs Blow Up Employer Budgets, PBMs (Not Amazon) Killed the Drugstore, and Asking if Community Pharmacy Has a Pulse Left

Hey all,

Happy Thursday! It seems the grand strategy of starving retail pharmacies with PBM reimbursement cuts is finally getting noticed by journalists and academics. We have managed to turn dispensing into a breathless race to the bottom while the cost of the actual inventory skyrockets, creating a perfect storm where the system pays a fortune for the product but refuses to fund the provider. Perhaps if we stopped treating pharmacists like over-educated vending machines and finally acknowledged their clinical value, the industry wouldn't be desperately checking its own wrist for a pulse today.

Enjoy the rundown!

Jacob Brody, (Co-founder and CEO, ZorroRX)

(BenefitsPro) GLP-1 Agonist Cost-Effectiveness

A new NBER working paper suggests that weight-loss drugs like Wegovy do not generate enough health improvements to offset their high costs for employer health plans, with data showing that overall per-patient spending actually increased by approximately $6,800 despite the health benefits. While recent price reductions may have brought GLP-1s in the U.S. closer to financial viability, the analysis indicates they have not quite reached the break-even point necessary to be cost-neutral for employers. Full Article

(Forbes) The Real Reason Retail Pharmacies Are Dying..

Despite improved productivity and revenue over the last decade, retail pharmacies like Walgreens and Rite Aid are failing because Pharmacy Benefit Managers (PBMs) have aggressively squeezed reimbursement rates, causing gross margins to collapse below 20%. The industry's decline is not due to operational obsolescence, but rather a shift in the supply chain power dynamic solidified by the 2011 Express Scripts-Medco merger that turned dispensing into a commodity business. Although the path forward requires evolving into clinical service hubs, pharmacies face an uphill battle to fund this transformation because industry consolidation has already destroyed the profit margins previously used to reinvest in growth and innovation. Full Article

(Drugstore Cowboy) What Do We Want Community Pharmacy to Be?

Fourth-generation pharmacist Alec Ginsberg argues that the current healthcare system has reduced community pharmacy to a mere distribution channel focused on volume and compliance, ignoring the vital clinical expertise pharmacists possess and demonstrated during the pandemic. He contends that the profession must reclaim its role as a human-centric practice defined by proximity and accountability, serving as a safety guardrail that algorithms cannot replace. This philosophy resonates deeply with us at ZorroRX, as we firmly believe in leveraging pharmacists as true clinicians who practice medicine, rather than treating them as simple dispensing machines. Full Article