Troll-E-Trolls R Us

Here’s oldie but goodie ( https://sfstandard.com/2025/01/23/san-francisco-residents-losing-neighborhood-pharmacies/) showing how government interference screws up businesses not once but three times leading closure of 12 Walgreens stores and causing two neighborhoods to lose their last pharmacy and access to prescription drugs. While there is plenty of blame to go around within pharmaceutical industry, they are regulated by the government to a much higher level than other industries. Let’s dig into the three points made in the article and add some commentary on government interference:

1. Proposition 47 reduced thefts under $950 in value from felony (jailtime) to misdemeanor (citation). Guess what happened? Pharmacies lost money from increase retail theft. Then when, they put items under locked glass cases, they lost more money from consumers who didn’t want to deal with those restrictions.
2. Pharmacies got squeezed by low ball reimbursements from insurance and the so-called Pharmacy Benefit Managers (PBMs), who control pricing of prescription drugs. A big driver was the federal government enacting polices to make insurance behave more like social welfare to cover prescriptions, rather one-time less predictive events like accidents or diseases. Specifically, the Affordability Care Act of 2010 (aka Obamacare) expanded Medicaid and increased influence of the PBMs. The insurance companies adjusted with lower payments to pharmacies partly driven by the need to cover more people while charging them a lower (or no) insurance premium rate. Couple this change with fewer people using cash (since adults were “forced” to get insurance under Obamacare or pay a tax) and more expensive drugs, and voila, PBMs become more popular to handle more people and higher costs. Regardless of the potential social benefit, that doesn’t change the negative impact of these policies on pharmacies in San Francisco as seen by the closures.
3. While some pharmacies deserve their share of the blame for not better preventing the opoid crisis, the government should have better understood the risks and behaviors of addiction. It’s their job (specifically the Federal Drug Administration) to challenge pharmaceutical companies. Oxycontin pills were falsely believed to be less addictive because they were designed to be time-released medication as the pill was digested (See December 1995 timeline at https://www.fda.gov/drugs/food-and-drug-administration-overdose-prevention-framework/timeline-selected-fda-activities-and-significant-events-addressing-substance-use-and-overdose). The federal government naively failed to realize that people would crush up the pills and snort them in one go.

So where does this leave San Francisco. Not in a good place. The most likely solutions ironically (tragically?) rely on the San Fran and California state government. First, do your job and set laws that deter criminals from theft and prosecute those who commit theft. Second, figure out how to deal with PBMs, like other states have.

California recently passed Bill 41 to reshape PBM rules as of January 1, 2026 (https://www.jdsupra.com/legalnews/california-senate-bill-41-reshapes-pbm-2960751/#:~:text=Executive%20Summary,provisions%20phasing%20in%20through%202029). Only time will tell how much that will, but don’t your hold breath on pharmacies coming back anytime soon….good thing CVS offers direct mail….enjoy San Franciscans!