Altoona Times

A bill protecting Pennsylvanians’ access to medications by providing relief to community pharmacies threatened by pharmacy benefit managers (PBMs) has achieved concurrence in the State Legislature, and Sen. Judy Ward (R-30) says such reform "will help our community and independent pharmacies stay in business.”

On Wednesday, the state Senate approved House Bill 1993, introduced by Representative Jessica Benham (D-36) and Representative Valerie Gaydos (R-44), legislation which achieved concurrence on the following day, July 11. Now approved by both chambers, the legislation is headed to the desk of Gov. Josh Shapiro for his signature into law.

Ward elaborated on the importance of her bill to Blair County residents.

“Pharmacies across the state are closing at alarming rates due to the unfair practices of PBMs. In Blair County and many parts of rural Pennsylvania, the closure of a pharmacy can diminish people’s access to healthcare and make it significantly harder to get the prescriptions and medicine they need. This reform will help our community and independent pharmacies stay in business and continue to serve and care for the many people that depend on them,” Ward told the Altoona Times.

PBMs were created to negotiate pricing with drug companies for prescription drugs through Medicaid to lower costs. However, PBMs have resulted in community pharmacies receiving Medicaid reimbursement payments that do not cover the cost of medications. This has resulted in the closure of local pharmacies, reducing Pennsylvanians’ access to nearby medicine. 

Senators Ward and Christine Tartaglione (D-2) sponsored the Senate version of this legislation, Senate Bill 1000.

“Too many pharmacies are disappearing in Pennsylvania and the time is now for meaningful reform to the relationship between pharmacies and pharmacy benefit managers,” Ward previously told the Altoona Times. “Many Pennsylvanians depend on pharmacies for access to care and prescription medication and cannot afford to lose that resource. This bill would put the needs of patients and their ability to access medicine first and brings much-needed relief to pharmacies across the Commonwealth.”

House Bill 1993 will ban harmful practices like patient steering and clawbacks, improve network adequacy requirements, increase transparency and accountability for PBMs through mandated annual reporting, and expand the services pharmacists can offer by allowing them to provide immunizations to a wider range of customers.

“Community pharmacies are a lifeline for many Pennsylvanians, particularly in underserved areas across the Commonwealth, from rural to urban,” Tartaglione said. “The closure of any pharmacies due to the overburden from PBMs is unacceptable. Passing House Bill 1993 is a critical step toward ensuring that all Pennsylvanians have reliable access to their medications without the burdens that PBMs too often bring. By addressing PBM practices such as patient steering, spread pricing, transparency, and others we are taking a sorely needed step towards relieving our community pharmacies and our constituents who rely on them.”

The University of Pittsburgh created the website ActForPharmacy.com that tracks community pharmacy closures.

Mainline Pharmacy in February announced PBM pricing was forcing the closure of nine of its pharmacies in the greater Pittsburgh region across several counties, including Blair, Cambria and Westmoreland. This happened despite a record year for filling prescriptions because it lost $350,000 in the first six weeks of this year from PBM underpayments. Philadelphia lost several community pharmacies in underserved communities, including the 18th Street Apothecary and Haussemann’s Pharmacy.

While PBMs were established to lower costs, their effectiveness is questionable. Three PBMs – CVS Caremark, Express Scripts, and Optum Rx – control 80% of the marketplace. With these big three in place, Pennsylvania’s Medicaid spending on pharmacy benefits has drastically increased from $1.41 billion in 2013 to $3.7 billion annually now according to the National Community Pharmacy Association.

This also comes on the heels on the Federal Trade Commission recently releasing an interim report which emphasizes the impact PBMs have on the accessibility and affordability of prescription drugs, and illustrates how increasing vertical integration and concentration has enabled the six largest PBMs to manage nearly 95 percent of all prescriptions filled in the United States.

“The FTC’s interim report lays out how dominant pharmacy benefit managers can hike the cost of drugs – including overcharging patients for cancer drugs. The report also details how PBMs can squeeze independent pharmacies that many Americans – especially those in rural communities – depend on for essential care. The FTC will continue to use all our tools and authorities to scrutinize dominant players across healthcare markets and ensure that Americans can access affordable healthcare,” FTC Chair Lina Khan said.

Pennsylvania is not the only state experiencing a “pharmacy desert” effect, as New York is encountering a similar trend. And in that state, the FTC plans to sue CVS Caremark, Express Scripts and Optum Rx.

Leigh McConchie, who owns Stone’s Pharmacy in Lake Luzerne, has experienced first-hand the problems dealing with PBMs and looks to the new regulations to bring relief as do many independent owners. He’s seen the regulations change substantially, dropping from 23 to 17 pages, since the first public comment period ended in 2023 and included union backlash triggered by what he describes as misinformation about costs.

“Some of the regulations that were removed were very important to independent pharmacies,” McConchie said. “Specifically, there was a payment floor requiring them (PBMs) to make a minimum payment to us basically equivalent to what we receive from Medicaid…Now they’re allowed to pay us whatever they want.” At times, he said, pharmacies even take a substantial loss filling a script to keep a customer.