NASHVILLE, Tenn. (WKRN) — If you’ve noticed higher prescription drug prices in the new year, you’re not crazy. A new Tennessee law quietly took effect in January regarding something known as pharmacy ‘dispensing fees’ for ‘low-volume pharmacies.’
“A low-volume pharmacy is a pharmacy that dispenses less than 65,000 prescriptions in a year,” Past President of the Tennessee Association of Benefits and Insurance Professionals Adam Milam said. “So, that’s going to include most of the rural, independently owned pharmacies, the mom-and-pop shops, the family businesses.”
A dispensing fee is the ‘charge to cover the cost of dispensing the prescription,’ according to the U.S. Dept. of Health and Human Services.
Before this year, state law said nothing about dispensing fees – they were set by market price. Now, experts say such fees have increased by roughly $10 per prescription for low-volume pharmacies. What, on average, was below $2 is now $11.98 per prescription.
“The numbers are telling us right now that an average family could see an increase of about $680 on top of what they’re already paying for the same level of care,” Milam said.
Because the law only applies to low-volume pharmacies, it’ll affect mostly people who live in rural or more sparsely populated areas.
The change made it so, ‘A pharmacy benefits manager shall pay a professional dispensing fee at a rate that is not less than the amount paid by the TennCare program to a pharmacy.’
Currently, TennCare charges the aforementioned $11.98 per prescription to dispense.
Someone has to feel that hit: the customer or their employer providing insurance.
$10 per prescription may not seem like much—but for a lower-income family who might have a few prescriptions a month or children with prescriptions, it adds up quickly in a year.
“It’s really going to hurt Tennesseans and those other small employers trying to make that balance in keeping their doors open and attracting the talent they need to keep their doors open, as well,” Ownby Insurance Service owner Kevin Ownby said.
He said that ultimately leads them to move away from supporting small, local businesses.
“If I’m going to drive that cost up $40 or $50 more than what Walgreens down the street is, people are going to shift,” Ownby said.
When this bill passed last year’s legislature, the idea was to allow smaller pharmacies to charge more and thus, make more money. But if people end up leaving those pharmacies for bigger ones that don’t charge as much, those gains are nullified.