The Dangers of Advocating Pharmacy Reimbursement

Pharmacists' advocation of prescription filling reimbursement may cause what Kirzner writes as, "[ a failure] to understand that the market has not yet discovered all that it will surely soon tend to discover”. When government protects inefficiencies by creating price flooring, it blocks future innovations yet to be discovered by the entrepreneurial market process.

Many pharmacies through America advocate for government intervention to promote higher dispensing fees. The California Pharmacists Association reacted recently to the June 1st, 2007 California State Legislature Budget Conference Committee. They claim that independent pharmacies face the danger of closing their business. This advocacy is not new of America's pharmacies nor of America's businesses in general. The formula typically adopts the following format. "X price is not fair, so Y business will fail, leaving Z, the American Consumer, without a certain commodity." It follows a "we advocate for the best interest of the consumer" type of terminology that really is a mask for protecting the interest of their businesses.

Do patient's really suffer from these independent pharmacies going out of business? Possibly patients will then lack the special pharmacy services that independents allegedly provide. Realistically, pharmacists at chains or independents rarely spend the time performing the clinical services that raise patient outcomes. There is no randomized clinical trial in America illustrating the enhanced patient outcomes delivered by community pharmacists.

Why should we reward inefficiency in the market? When pharmacies such as CVS or Walmart can deliver patients economies of scale and lower costs prescriptions, why should we protect those pharmacies that fail to do so?