OTTUMWA — Sometimes buying prescription medications isn’t as simple as it sounds, even for the government.
In a move expected to save the county tens of thousands of dollars, the Wapello County Jail is shifting from a process that purchased medications through a national company to a local one.
Sheriff Mark Miller said more inmates are on prescription medicines these days, representing a serious cost to the county.
The new approach will save money without putting anyone’s care at risk.
Local pharmacist Mark Frahm spotted the potential when reviewing legal notices in the Ottumwa newspaper. The county purchased medications through CVS/Caremark, which bought them from him. There was a significant markup in the cost when they sold the medications to the county.
That didn’t sit right with Frahm.
“We were losing money on the jail account, then saw in the Courier (that) CVS/Caremark was getting paid much more than I was,” Frahm said.
In one case, he said, he bought drugs from a wholesaler. Cost: $1,500.
“The PBM gives us a thousand dollars, so we lose $500. Then they charged the jail $5,000. It’s outrageous,” he said. “They aren’t treating pharmacies fairly. It’s barely enough to cover the drugs, if that.”
When Frahm talked to Miller, he saw the opportunity to cut out the middleman.
By paying South Side Drug the $1,500 the medications cost, plus a handling fee of less than $12, the pharmacy makes its money back and the county saves about $3,500 on that purchase.
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“He wanted our business directly, for us to work through him; he told us he’d charge us what his cost was, plus a handling fee. It seems fairer all around,” Miller said.
In an online statement, CVS said the cost of drugs remains “a top concern for our clients and our members.”
The change at the jail could have significant ripples throughout the county’s approach to health care costs.
Supervisor Jerry Parker said the move made sense for both South Side Drug and the county jail. In fact, when he heard Frahm explain the situation, Parker threw his support behind the effort to find out what health plans, jails and other institutions were getting for their money, bringing the matter to the attention of the state Senate Oversight Committee.