As Arkansas experiences a spike in cases of COVID-19, many independent pharmacies across the state are not adequately stocked with Paxlovid, a crucial antiviral medication that helps mitigate serious effects of the disease among vulnerable populations, including the elderly and people with underlying health conditions.
At the height of the pandemic, the federal government struck a deal with Pfizer, the manufacturer of Paxlovid, to provide millions of packets of the treatment regimen to pharmacies, hospitals and other medical providers. The government stopped covering costs of Paxlovid for most patients at the end of 2023, and Pfizer has since shifted to commercial sales of the medication.
Paxlovid’s price, on average, is now nearly a whopping $1,400, according to the most recent Medicaid data. Medicare and Medicaid recipients, and uninsured patients, can still receive Paxlovid at no charge through the end of the year, according to the federal government.
But that doesn’t mean patients can always find it at their local pharmacy.
“Paxlovid is too expensive for us to stock, but we will special order for the next day,” Bob Hedge, owner of Prescription Corner Drug in Paragould, said. “However, many insurance plans won’t cover it, and, if they do, the copay is so high that most of our patients can’t afford it.”
The latest U.S. Centers for Disease Control and Prevention data that tracks levels of COVID-19 in wastewater across the country shows viral activity in Arkansas as “high,” down from a grade of “very high” earlier in July. Arkansas reports wastewater data to the CDC from eight sites around the state.
As of July 26, most states in the South were reporting “high” or “very high” levels based on wastewater monitoring, including Missouri, Tennessee, Louisiana and Texas. (Wastewater data “can be used as an early warning that levels of infection may be increasing or decreasing,” according to the CDC.) Multiple pharmacists said there is a noticeable spike in calls from people who are sick.
While many insurance plans provide some coverage for Paxlovid, it’s the upfront costs independent pharmacies incur to stock the drug that are driving supply issues in Arkansas. Pharmacists told the Arkansas Times that it can take weeks or months for insurance carriers to reimburse them for the medication, creating cash flow problems.
It takes up to three months for pharmacies to be reimbursed for a coupon from Pfizer that provides Paxlovid for free to patients, pharmacists said. Some insurance companies offer reimbursements that fall short of the wholesale price to pharmacies, meaning pharmacies that provide lots of Paxlovid to their customers could incur significant losses.
The numbers simply don’t add up, they said.
“I just checked my wholesaler, and they have plenty in stock, but at over $1,300 cost per treatment pack, we only keep two packs in stock across all six of our pharmacies,” Lelan Stice, owner of Doctor’s Orders Pharmacy, said.
A standard dose pack of Paxlovid contains tablets of different antiviral medications that should be taken twice daily over the course of five days. The medications are most effective at preventing serious disease when taken within the first five days of symptoms, according to the Paxlovid website.
Doctor’s Orders has locations in White Hall, Pine Bluff, Star City and Hensley.
“Insurance is generally paying at cost or below,” Stice said. “Medicaid only pays $10 over the cost, so economically, it doesn’t make sense for the pharmacy to keep it in stock.”
Krystal Soo, a pharmacist with Soo’s Drug and Compounding Center in Jonesboro, also said supplies are low. “There are a lot of calls in Jonesboro from people asking who has it in stock,” Soo said. “Patients should be able to find it, but it is not something you can just walk into any pharmacy and get.”
Anne Pace, co-owner of Kavanaugh Pharmacy in Little Rock, said the business receives daily calls from patients searching for the medication. “Oftentimes, they have already called three or four pharmacies before they have gotten to me,” Pace said, adding the pharmacy keeps about one pack of Paxlovid in stock per day.
“When the government was covering it for free, we would have 30 to 40 boxes at a time,” Pace said.
Now, Pace said, it’s hard for the pharmacy to keep even one or two packets of Paxlovid in its inventory because it costs so much up front.
“You start to think about all of the drugs we are having to stock,” Pace said. “There are such high holding costs, it is impossible for us to carry that much inventory.”
The Paxlovid situation isn’t a “crisis,” Pace said, but it’s an example of a larger problem in the health care system: If pharmacies aren’t reimbursed adequately for certain drugs, they won’t carry them, and patients are harmed.
“I don’t know of another business expected to give out something and take a loss on it,” she said.
John Vinson, head of the Arkansas Pharmacists Association, agrees. Paxlovid is a symptom of a broken pharmaceutical industry that federal lawmakers are finally beginning to address head-on, he said.
The issue centers on pharmacy benefit managers, or PBMs, which effectively serve as middlemen between insurance carriers, pharmacies and drug manufacturers, setting the prices of drugs for millions of Americans. Independent pharmacies say PBMs often reimburse them at lower rates than large corporate chains, running mom-and-pop shops out of business in Arkansas and elsewhere. One of the nation’s largest PBMs, CVS Caremark, is owned by the same company that operates the national CVS pharmacy chain.
Small pharmacists say PBMs have slashed reimbursement rates for generic medications while pushing costs for brand name drugs, like Paxlovid, to astronomical levels.
“A lot of pharmacies are paying $1,400 to buy the drug, then the PBM and insurance company are reimbursing them $1,300,” Vinson said. “They are not going to buy something at a loss so pharmacies are choosing not to stock it at all, or have very limited supplies.”
Similar supply issues have arisen with other prescriptions, like the popular weight loss drugs Wegovy and Mounjaro, Vinson said.
“It is bigger than Paxlovid,” Vinson said. “You name a brand name drug, and the fact that it is not available is not just because of manufacturer shortages. Access to weight loss drugs, diabetes medications, drugs for mild-to-life-threatening illnesses is hindered by a broken payment model.”
(Vinson said some pharmacists have told him there are wholesaler shortages of Paxlovid as well. The Arkansas Times did not receive responses from inquiries to wholesalers, including Cardinal Health Inc. of Ohio and Louisiana Wholesale Drug Co.)
Federal lawmakers introduced a bill this week aimed at cracking down on PBMs. Also on Tuesday a House committee held its third hearing on the industry and its practices. That hearing featured testimony from executives representing the nation’s three largest PBMs: CVS Health’s Caremark, UnitedHealth Group’s Optum Rx, and Cigna Express Scripts.
Arkansas lawmakers have made efforts to limit the power of PBMs. In 2018, after a similar situation emerged with supplies of Tamiflu, a flu medication, state lawmakers called a special session and passed legislation to regulate PBMs.
Vinson said that while that was a step in the right direction, PBMs “continue to find loopholes in the laws to not insure payments are reasonable and fair.”
“As a result, you still have access issues for certain drugs,” Vinson said. “Paxlovid is one of those.”
The Arkansas Department of Health “is not aware of any Paxlovid shortages,” spokesperson Danyelle McNeill said via email. “It is possible that retail pharmacies/outlets may run out temporarily.”
Dr. Robert Hopkins, a University of Arkansas for Medical Sciences professor of internal medicine and pediatrics, said he also had not heard of widespread Paxlovid supply issues.
“Some of the independents may not be carrying it because of cost,” Hopkins said. “Most pharmacies do have it available. The challenge is insurance copays or people not having insurance.”
Hopkins said the UAMS hospital system is “seeing an increase in the numbers of our patients” infected with COVID but added that it is not “a huge surge compared to where we were earlier in the pandemic.” Health department data shows 52 hospitalizations due to COVID over the past week.
A new COVID vaccine booster is expected to be released in the coming months, and Hopkins encouraged people to get vaccinated.
“COVID is not gone,” he said. “We need to be cautious.”