‘Unsustainable’ PBM model drives Lehan Drugs to drop pharmacy services 

DEKALB, Ill. – Over the course of nearly eight decades, Lehan Drugs has adapted many times in response to change and competition, but the growing stranglehold of pharmacy benefit managers (PBMs) had fifth-generation owner Jim Lehan saying enough is enough. 

Lehan Drugs in September stopped providing pharmacy services at its DeKalb, Ill., location, but it will continue to provide home equipment there and at multiple locations in the state. 

“We’ve had reimbursement cuts over the years, but it got to the point where there are PBMs controlling 80%-plus in our market,” said Lehan. “In August, 40% of our refills for prescription were filled below our cost to obtain the medications.” 

Lehan Drugs, which has six locations in Illinois and Wisconsin but only provided pharmacy services in DeKalb, transferred its prescription services to Walgreens effective Sept. 12. Lehan’s great-grandfather and his brother launched the family-owned company in 1946 as a Walgreens agency. Over the years it passed down through the family and experimented with different product mixes, before it “dove into DME” around 2005. 

The writing was on the wall, Lehan says, when the contracts he was being offered for 2025 were the worst yet, particularly those from CVS Caremark and Express Scripts, which control the majority of his local pharmacy market. CVS Caremark, Express Scripts and OptumRx are the country’s three largest PBMs, controlling nearly 80% of the national market. 

“It was a difficult decision to shut down the pharmacy,” said Lehan, “but saying no to just one of those two PBMs means losing 40% of your prescriptions, and it wasn’t sustainable.” 

Lawmakers may finally be taking heed. Bills aimed at curbing “abusive” practices have been introduced in the House of Representatives and the Senate and the Federal Trade Commission has sued Caremark Rx, Express Scripts and OptumRx for allegedly engaging in anticompetitive and unfair rebating practices that have artificially inflated the list price of insulin.  

For Lehan, getting out of the pharmacy business has meant he’s finally able to speak up about PBMs. 

“It’s difficult to be specific about challenges experienced with PBMs because they have a lot of gag-clause language (in their contracts), and you can be removed from their networks,” he said. “It’s too late for us, but the issue is becoming more mainstream and the general public is beginning to understand what’s going on.” 

• Related: The National Community Pharmacists Association has long called for PBM reform.