It’s hard to believe that right now, in the 21st century, countless Pennsylvanians are losing access to affordable prescription drugs. But that’s exactly what’s happening as more and more community pharmacies are being forced to close their doors due to the little-known role pharmacy benefit managers (PBMs) play in our health care system.
Because of PBMs, our commonwealth’s community pharmacies are faced with Medicaid reimbursement costs that do not cover the expenses incurred to purchase drugs. For some of our pharmacies, this challenge threatens their very survival.
PBMs were created with the best intentions to negotiate pricing with drug companies for prescription drugs through Medicaid to lower costs. But today, three PBMs — CVS Caremark, Express Scripts and Optum Rx — control 80% of the marketplace. With the big three in place, Pennsylvania’s Medicaid spend 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 (NCPA).
In February, Mainline Pharmacy 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 they 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.
We’re seeing this issue repeated across the commonwealth and the nation. The University of Pittsburgh has created a website (ActForPharmacy.com) that tracks community pharmacy closures and provides a sobering view of the challenges Pennsylvania community pharmacies face in staying open — and of Pennsylvanians who desperately need their prescriptions.
That’s why we’re sponsoring bipartisan legislation in the state House (House Bill 1993) and Senate (Senate Bill 1000) to stop this vicious cycle and bring transparency to the process. Transparency is critical to solving this problem because no one really knows how much PBMs are making at the expense of Pennsylvania’s dedicated community pharmacies and their patients.
We’re pleased the need for PBM reforms was cited by Gov. Josh Shapiro in his state budget address. Our legislation will direct the state Insurance Department to develop a process for hearing and resolving pharmacy complaints against a PBM. It also will require PBMs to report financial information on rebates and payments received from drug manufacturers and how those rebates and payments were distributed by the PBM. In addition, the legislation will limit or ban several practices by PBMs, including patient steering and spread profit schemes.
The time to enact comprehensive PBM reform is now. Nationally, the issue is taking center stage. A recent White House roundtable on lowering health care costs and bringing transparency to prescription drug middlemen included Pennsylvania pharmacist Dr. Chichi Ilonzo Momah, CEO and founder of Springfield Pharmacy in Delaware County. Speaking for community pharmacists, Dr. Momah detailed what’s happening to community pharmacists and the negative impact PBMs have on the Pennsylvania patients they serve.
Also at the roundtable was billionaire philanthropist Mark Cuban, a co-host of “Shark Tank” and owner of the NBA’s Dallas Mavericks. An outspoken critic of PBMs, Cuban has formed Cost Plus Drug Company, which provides complete price transparency from manufacturing to prescription delivery.
Let’s stop the needless closure of any more community pharmacies. Pennsylvania has the ability to better protect our commonwealth’s pharmacies, which are vital to their communities through the jobs they create and Pennsylvania families who depend on them for their prescription medications.
(Republican Sen. Judy Ward represents Blair County and Democrat Christine Tartaglione represents parts of Philadelphia. Democratic Rep. Jessica Benham and Republican Rep. Valerie Gaydos represent parts of Allegheny County.)
