Then, in 2016, 20 percent of Komoto’s business vanished, practically overnight. The insurer Centene Corp. purchased the health plan that covered his patients — many of them Hispanic farm workers who had developed a level of trust with Komoto’s traveling nurses. Centene had its own mail-order pharmacy, and it told the patients to go there instead, he said.
Using tactics that have drawn the attention of federal regulators and attracted lawsuits, drug plans and insurers have boxed out their smaller partners so they can take the business for themselves, independent pharmacies say.
“There was nothing we could do,” Komoto said of Centene steering his patients away. “It’s not like there were hoops we didn’t meet or criteria we didn’t meet. It appears they just wanted the business.” Other health plans put similar pressure on Komoto, and he froze hiring to cut down on headcount.
What happened to Komoto’s business shows the growing pressure on small operators in the health-care industry, who are seeing their profits squeezed by a tightly interwoven web of distributors, retailers and health-plan administrators. As patient demand lower costs, bigger players such as Centene can use their size and connections to box out independents.
The drug supply chain is being drawn even more taut, and the power of the big players even greater. This month, insurer Cigna Corp. said it would buy Express Scripts Holding Co., the U.S.’s biggest stand-alone pharmacy benefit manager, or PBM. In December, drugstore chain and PBM giant CVS Health Corp. said it would buy insurer Aetna Inc.
Enjoy curated articles directly to your inbox.