Introduction to Colorado Pharmaceutical Structure

(i) Pharmaceutical Care Management Association (PCMA)

• Since the 1960's the pharmaceutical structure in Colorado is largely ruled by Pharmacy benefit Managers (PBM's) - which are middlemen between pharmacies, drug manufacturers, and insurers. PBM's gained more influence after the 2000's when the Congress negotiated with PBM's regarding drug pricing and Medicare enrolment. PBM's are represented by a larger entity known as the 'Pharmaceutical Care Management Association (PCMA).'
• PBM's are contracted by government entities, health plans, and employers to regulate drug-related matters which include: drug costs, prescription drug benefits, coverage plans, negotiating with drug manufacturers, and processing prescription drug claims.
• PCMA represents PBM's and is responsible for looking after consumer benefits such as reducing prescription drug costs and improving safety and convenience for consumers, employers, unions, and government programs.
• According to the Colorado Health Institute, like most states, the Colorado state does not have efficient regulatory oversight or reporting requirements for PBMs. As a result, only 3 PBM's (CVS Caremark, OptumRx, and Express Scripts) control up to 85% of the U.S. market.

(ii) National Community Pharmacists Association (NCPA)

• The National Community Pharmacists Association represents the (a) community, or (b) independent pharmacists.
• According to NCPA's view, for the past 25 years, the PBMs have focused more on enriching themselves, than bringing the drug costs down.
• According to NCPA's Senior Vice President, Mr. Kurt Proctor, 'The number of independent pharmacies are getting squeezed out of business, while the community pharmacies are holding pretty steady.'

Statistics:

• According to NCP's estimates, in 2020, the number of independent community pharmacies in the U.S. are 21,909.
• In 2019, the number of community pharmacies in the USA was 23,061, as opposed to chain pharmacies which were 39,084.
• In the U.S, in 2018, independent community pharmacy covered a $75.8 billion market, with 93% of the sales from prescription drugs.
• According to Quest Analytics of National Council for Prescription Drug Programs, in Colorado, the number of independent pharmacies increased from 136 (in 2010) to 155 (in 2020).
• The growth rate of independent pharmacies in the state of Colorado was 16% between 2010-2019, from 136 pharmacies (2010) to 158 pharmacies (in 2019).
• According to the Colorado Sun Article, the three largest PBM's including CVS Health, Express Scripts, and OptumRx caters to around 180 million Americans, which covers about 80% of the U.S market share.
• Regarding the pharmacist's workforce in Colorado, the largest chunk worked in chains or mass pharmaceutical merchandisers (39%), followed by working in hospitals or inpatient health care facilities (22%). Whereas in rural areas of Colorado, 37% worked for chain stores, 21% worked for in-hospital setting, while, more than one-quarter (27%) worked for independent community pharmacies.
• According to NCPA digest of 2019, the following statistics are relevant to U.S. Independent Pharmacies in the year 2018:

List of Independent Pharmacies

• List of 155 Independent Pharmacies in the Colorado state can be found on this weblink. An excel spreadsheet has been created to dig up information on each pharmacy's name, address, whether they lie in rural or urban area based on zip code, their website, contact details, and business volume. This spreadsheet needs to be completed in the detailed research section following the proposed methodology.