Bipartisan effort tries to tackle crisis facing local pharmacies in Pennsylvania
Legislature passes law to 鈥榣evel the playing field鈥� for small town pharmacists
Mike Jones
The term “bipartisan” seems to have become a dirty word in politics in recent years, but the divided state Legislature just passed a new law designed to give struggling local pharmacies a more “level playing field” when competing for business against major chains.
The Pharmacy Audit Integrity and Transparency Act, which was passed with overwhelming bipartisan support in both chambers and was signed into law by Democratic Gov. Josh Shapiro on July 17, is an attempt to stop predatory practices by insurance middlemen know as Pharmacy Benefit Managers, or PBMs, that can skim reimbursements or push customers away from smaller pharmacies.
“We’ve been talking about this for years, trying to get a level playing field so we can take care of our communities,” said Erich Cushey, who owns Curtis Pharmacy. “It’s a first step, but we’re excited to see where things are going.”
Cushey and his wife, Tina, have locations in Washington, Claysville, Carmichaels and Connellsville, so on Thursday they invited local state representatives, other pharmacy owners and industry advocates to discuss what the legislation will mean for smaller operations like theirs. State Rep. Jessica Benham, D-Allegheny, who was the primary sponsor for House Bill 1993 that was the framework for the eventual passage of Act 77 of 2024, stood alongside Republican state Rep. Bud Cook, who represents Greene County, at the Carmichaels pharmacy as they talked about the bipartisan effort to make things more fair for local pharmacies.
“A good idea is a good idea,” Cook said about the bipartisan effort on an important issue. “That’s where we’re at. To get things done.”
“This is an issue that unites us,” Benham said. “Regardless of your party or whether you’re from a rural area or a city, you rely on your local pharmacy.”
Benham said Pharmacy Benefit Managers “are putting local pharmacies out of business” because they’re squeezing profits from prescription prices or steering customers to larger chains. She noted 140 pharmacies have closed in Pennsylvania this year alone, so this bill hopefully “gives pharmacies some breathing room” moving forward.
It is an incredibly complex issue that most patients have no idea is happening when they hand over their insurance card to a pharmacist and get their prescription drugs in return. In essence, the law allows for more equitable rebates from the PBMs, limits patients from being pushed away from local pharmacies for corporate entities and gives the state Insurance Department more tools to audit the process, which is widely considered to not be very transparent.
Benham said she didn’t even know there was an issue until last year when she went to her local Spartan Pharmacy in Brentwood and talked to the owner about the financial consequences they’re facing with diminished returns due to PBMs having a larger stake in their payments.
“The goal is to keep pharmacies open and level the playing field. When you walk in the front door, they call you by name,” Benham said of the importance of local pharmacies. “A lot of people don’t know what PBMs are. I call them secretive middlemen. … It’s secretive on purpose.”
After spending nine months helping to craft the legislation, Benham is now traveling the state and speaking with other local representatives about the law and the need to save small pharmacies, including Thursday’s appearance with Cook. She noted that major pharmacy chains have branched out with their own insurance companies and even their own PBMs, which can skim some of the money from small pharmacies without offering the patients any savings.
“It’s not saving the customers money because the PBM is automatically inflating the cost,” Benham said.
The main issues center around reimbursement, dispensing fees and in-network provisions that cut out local pharmacies or make it not financially viable for them to fill a prescription. Urban pharmacies, which are more prevalent, face other issues because they may receive more insurance plans from Medicare or Medicaid recipients, which is a different problem with reimbursements.
While the new law is a good start, all agreed there still need to be overall changes to the reimbursement model and the practice of steering customers to larger pharmacies at the behest of the PBMs.
Cushey said that his pharmacy in Carmichaels is the last one until the southern state line at West Virginia, meaning his location might be the closest place for people in Point Marion in neighboring Fayette County to visit. But if he’s not in their network, they might be forced to travel even farther to a supermarket or drugstore pharmacy.
There are currently only eight pharmacies in Greene County, although there are some areas in Pennsylvania with only one or two in the entire county. That makes the law even more important for rural areas that face fewer choices for medical care.
“We rural Pennsylvanians face a whole different set of issues,” Cook said. “We don’t want to keep losing these services in rural Pennsylvania.”
The bill passed 170-30 in the state House with all local Republican representatives voting in favor except for state Rep. Ryan Warner, whose district is in northern Fayette County. The final bill passed 48-1 in the state Senate, with only former Republican gubernatorial candidate Doug Mastriano voting against it.