Changes in the drug store industry have claimed Big Clifty's Midway Pharmacy as a victim. The small store will close Aug. 10.

Pharmacist Trevor Ray blames the closure on low Medicaid reimbursements and "middle men" that are taking millions that used to go to pharmacies.

Ray said CVS Caremark, which is the pharmacy benefit manager for 80 percent of the pharmacies in Kentucky, has drastically reduced Medicaid reimbursements to pharmacies, and small, independently owned pharmacies are losing money.

According to Ray, CVS controls this money and reimburses pharmacies differently, depending on if they are CVS owned or independently owned. This is causing small independently owned pharmacies, like Midway Big Clifty, to go out of business.

Grayson and surrounding counties have lost five pharmacies in the past six months, Ray said, adding that the state of Ohio went through the same issue before Kentucky and lost 165 pharmacies in total.

According to the National Community Pharmacists Association, since 1987 when pharmacy benefit managers were incorporated, prescription drug benefit costs have increased by 1,010 percent, and patients' out of pocket costs increased by 169 percent.

Pharmacy benefit managers are "middle men" between insurance companies and health care providers, and, according to the NCPA, they pocket hundreds of millions of dollars that should be reimbursed to the pharmacies.

As an example, Ray said that in June Midway was reimbursed $400 for a certain prescription, and was only reimbursed $200 for the same prescription in July.

Midway is not the only local pharmacy to feel the effects of these low reimbursements. Jim Marshall, of Clarkson Drug Store, said the situation has been difficult financially for his pharmacy as well, and he hopes things will change.

Marshall said there have been many insurance claims that pay below what the medicine costs.

While Marshall has maintained his store's hours and employees, he said he has had to cut back on inventory and delivery to only three days per week instead of every day.

"There's not much margin between profit and loss," he said, adding that he has reached out to his supplier in order to renegotiate pricing to make the medication more cost efficient.

Ray has been working with other pharmacists around Kentucky to combat the reimbursement issues with Medicaid.

"I have testified at Frankfort four times," he said.

A bill that Ray and other pharmacists worked on, Senate Bill 5, was passed by the legislature and signed by the governor this year. Under the bill, pharmacy benefit managers will be required to show proof of the total amount of Medicaid dollars they receive and the total amount of Medicaid money reimbursed to pharmacies, including any fees they charge.

Before the bill, CVS was not required to show proof of any money changing hands, so, Ray said, CVS chose how much to reimburse and profited from the low reimbursements without any recourse.

Ray said closing the pharmacy was not an easy decision. All patient records at the Big Clifty Midway will be moved to Midway Pharmacy in Clarkson, but patients can have their prescriptions transferred to any pharmacy they choose. Big Clifty area will still be able to use the free countywide delivery service. He said the staff at Big Clifty will continue to be a "part of the Midway family," and he expects a smooth transition for customers.