More than 200 professional and student pharmacists from across Pennsylvania joined with state legislators today at PA Pharmacy Legislative Day to call on the General Assembly to pass bipartisan legislation that will bring desperately needed reforms to how pharmacy benefit managers (PBMs) operate in Pennsylvania. Senate Bill 1000 and House Bill 1993 will stop this predatory practice once and for all.
Both pieces of legislation have broad bipartisan support. Gov. Josh Shapiro recently called for #PBMReformNow in his state budget address. PBMs are supposed to negotiate good prices with drug companies for prescription drugs through Medicaid — and they do. Unfortunately, the savings aren’t passed on to the health insurers they represent or the pharmacies dispensing the prescriptions. Instead, those Medicaid dollars are going right into the pockets of PBMs.
For example, despite filling more prescriptions in 2023 than any other time in its 40-plus years in business, Mainline Pharmacy announced in January it would close nine locations. The pharmacy said it lost $350,000 over six weeks due to being paid less from PBMs than what it cost to purchase the medications. For a popular diabetic injectable, Mainline’s cost to buy the drug is $2,858, but the reimbursement they received from the PBM led to a loss of $422.
“The timing is perfect to take steps to create a transparent and accountable PBM system that will lower prescription drug costs and protect access to pharmacies for Pennsylvania taxpayers,” said Chris Antypas, a pharmacy owner and president of the Pennsylvania Pharmacists Association. “With strong bipartisan support in the legislature, everyone agrees it’s time to turn off the taxpayer money spigot for PBMs in Pennsylvania.”
Pennsylvania’s annual Medicaid spend on the pharmacy benefit has drastically increased, from $1.41 billion in 2013 to $3.7 billion, according to the National Community Pharmacy Association (NCPA). Not only is that increasing the cost of prescriptions, but it’s also leading to the increased closure of community pharmacies. Since January, over 70 chain and independent pharmacies have closed.
To achieve #PBMReformNow, Senate Bill 1000 (sponsored by Sens. Judy Ward, R-Blair and Christine Tartaglione, D-Philadelphia) and House Bill 1993 (sponsored by Reps. Jessica Benham, D-Allegheny and Valerie Gaydos, R-Allegheny) would:
- Ensure pharmacies are reimbursed for the cost to buy and dispense drugs;
- Stop the process of “spread pricing,” where PBMs charge payers, such as a health plan, a higher price for medications than what they pay to pharmacies, keeping the difference or “spread” as profit;
- End the practice of “patient steering,” which occurs when PBMs force patients to use a PBM-owned pharmacy or risk paying higher out-of-pocket costs;
- Grant the Department of Insurance power to audit PBM contracts with pharmacies.
- Develop a process of receiving, hearing and resolving complaints from pharmacies about PBMs.
- Set fixed amounts for PBM claim processing and administrative fees.
“We thank Gov. Shapiro, Sens. Ward and Tartaglione, and Reps. Benham and Gaydos for their leadership, and so many members of the legislature for their incredible bipartisan support,” said Victoria E. Elliott, R.Ph., MBA, CAE, chief executive officer of the Pennsylvania Pharmacists Association. “We need to stop mass closures of pharmacies that have become an integral part of local communities across the commonwealth. Passing #PBMReformNow will preserve community pharmacies as viable local businesses and restore patients’ choice of their preferred pharmacy provider.”
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Save Community Pharmacies is a coalition of the: Pennsylvania Pharmacists Association (PPA); PA Association of Chain Drug Stores (PACDS); Philadelphia Association of Retail Druggists (PARD); and Value Drug Company. Visit www.SaveCommunityPharmacies.org for more information.
