Illinois Comptroller Gives $4.7 Million to Rural Pharmacies

Illinois Comptroller Susan A. Mendoza has released $4.7 million to be shared by more than 70 rural pharmacies under a new scheme that is meant to boost these businesses.

The $10 million fund, known as the Critical Access Pharmacy program, was set up by the Illinois Department of Healthcare and Human Services to benefit pharmacies located in medically underserved areas of the state.

A statement from the comptroller explained that these supplemental state payments will assist small, independently owned pharmacies that have experienced serious financial difficulty because of rates offered under the state’s managed care program and also because of rate cuts by pharmacy benefit managers. 

“Small rural pharmacies – often the only pharmacies available for miles and miles – are being driven out of business all over Illinois because of unfair competition and state policies. It is important that we step in to help these frontline health care providers stay in business so that they can continue to be there for residents in underserved areas of the state,” Mendoza said.

What are critical access pharmacies?

Under the program, critical-access pharmacies are defined as brick-and-mortar facilities located in counties with fewer than 50,000 residents and whose owners operate fewer than 10 pharmacies. They are located in areas designated as a medically underserved by the Health Resources and Services Administration (HRSA).

For the scheme to work efficiently, Mendoza called for more transparency and accountability within the state’s managed care program.

The Critical Access Pharmacy program began on July 1, 2018, the News Gazette explained. However, funding for quarterly payments to the selected pharmacies only became available at the beginning of the new fiscal year, which began this month.

State Senator Andy Manar (D-Bunker Hill), chairman of a key Senate budget committee, this spring pushed for renewed appropriations for the Critical Access Pharmacy program after it failed to start under former Governor Bruce Rauner’s last term.

“I hear from pharmacists in my Senate district and all over the state nearly every day about the financial hardship they face because of unfair competition. It troubles me to see these small business owners being squeezed out because of state policies they had no control over. Every time a rural pharmacy closes its doors, communities lose access to health care, jobs and economic activity,” Manar said, adding that establishing the program was the right thing to do.

Manar said he was glad that the program had finally been launched that “we’re finally leaving the gridlock of the past behind and bringing this needed program to communities that are at risk of losing their local pharmacies.”

More still needs to be done

The program seems to be a stop-gap measure Illinois devised in an effort to give rural pharmacies a leg, while the state looks for a more lasting solution to keep the prices of prescription drugs low. 

A beneficiary of the program, Owen Sullivan of Sullivan Drugs, told the Herald Review that had they not received funds under the Critical Access Pharmacy program, they would be out of business. “We’ve been around since 1930. They’ve undercut us to the point we can’t survive.”

Illinois Pharmacists Association executive director, Garth Reynolds, was quoted saying more still needed to be done to assist community pharmacies.

“We have to see a change in how pharmacies are valued by the state, especially through the managed Medicaid program. We recognize medication costs have gone up over the past number of years. 

“But that is not because of community pharmacies. The pricing manipulations go way higher than the influence that a community pharmacy can have. But the community pharmacy is the one that gets punished,” he said.

The elephant in the room that needs to be tackled, as far as small pharmacies are concerned, is the pharmacy benefit manager system. Pharmacy benefit managers, or PBMs, are accused of paying larger pharmacies much more for filling the same prescription with the same insurance.

Illinois House Democrats have been very loud in their complaints over drug prices and have introduced a bill that would give the Department of Healthcare and Family Services more direct control over pharmacy benefit managers, who are routinely accused of being responsible for high drug prices.