PA bill tackles problems with pharmacy benefit managers, heads to Governor for a signature

11 July 2024- The state Senate today approved a bill introduced by Representative Benham (D-36) and Representative Gaydos (R-44) to protect Pennsylvanians’ access to medications by providing relief to community pharmacies threatened by pharmacy benefit managers (PBMs).  Senators Judy Ward (R-30) 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 said. “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 would 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 pharmacist 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.”

PBMs were created to negotiate pricing with drug companies for prescription drugs through Medicaid to lower costs. Unfortunately, PBMs have resulted in community pharmacies receiving Medicaid reimbursement payments that do not cover the cost of medications.

PBM pricing is causing community pharmacies to close, reducing Pennsylvanians’ access to nearby medicine. The University of Pittsburgh created the website 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 the big three in place, Pennsylvania’s Medicaid spending on the pharmacy benefit has drastically increased, from $1.41 billion in 2013 to $3.7 billion now annually, according to the National Community Pharmacy Association.

House Bill 1993 now heads to the House of Representatives for concurrence. If the House approves in the Senate’s changes, the bill would go to the Governor for his signature.