HARRISBURG (TNS) —The Pennsylvania Insurance Department will soon have the tools necessary to rein in retail prescription costs by regulating drug middlemen, thanks to legislation signed into law July 17, state Insurance Commissioner Michael Humphreys said at a Lawrence County news conference Wednesday.
Humphreys was joined by Gov. Josh Shapiro, state legislators and local government officials at the Hometown Pharmacy in New Castle, in touting the consumer protections that are part of Act 77.
The law prohibits pharmacy benefit managers — middlemen who set the price pharmacies are reimbursed for filling medications — from paying PBM-owned pharmacies more than independent community pharmacies and prohibiting PBMs from steering consumers to in-house drug stores. The legislation is meant to give consumers a bigger say in where they fill prescriptions and assure that PBM service areas have an adequate number of drugstores for consumers to choose from.
“I place real value in these pharmacies because of the way they enrich communities,” Shapiro told a small crowd outside the store under sunny skies as the temperatures pushed into the high 80s. “When the middlemen get rich, our local pharmacies lose. Pharmacies are being forced out of business because of the greed of these companies.”
Since January, more than 140 pharmacies have closed in Pennsylvania, according to ACT Pharmacy Collaborative, a nonprofit educational group affiliated with the University of Pittsburgh.
The Harrisburg-based Pennsylvania Pharmacists Association estimated that more than 70 of those drugstores were independently owned.
Community pharmacy owners have blamed PBMs, which set the prices that drugstores receive for filling prescriptions, for the recent spike in closings. Pittsburgh-area pharmacists have complained they lose money in filling most brand name drugs because of low reimbursement rates set by pharmacy benefit managers.
House Bill 1993, which became Act 77, was sponsored by state Rep. Jessica Benham, D-Allegheny County, but the bill had wide bipartisan support.
The new law will “stop PBMs from screwing over Pennsylvanians,” Shapiro said. “Now we have some transparency and accountability in the process. We lowered prescription drug costs.”
When the law takes full effect, pharmacy benefit managers will be required to file annual reports with the state Insurance Department that detail how much pharmacies are paid to fill prescriptions and the rebates they receive from drug manufacturers.
The reports will give regulators insights into how drugs get slotted in formularies, which determine how much a consumer pays, and slow prescription drug price increases, Humphreys said.
Separately, Shapiro, who has been mentioned as a potential candidate for vice president, told reporters that he’d received a call from President Joe Biden shortly after Mr. Biden announced that he was dropping out of the race on Sunday, and then a call from Vice President Kamala Harris.
He said she only asked two questions: would he endorse her in the presidential campaign, which he did, and what could they do to defeat Donald Trump in Pennsylvania in November.
He said he has not talked with Biden and Harris since then.
Lawrence County Commissioner Chris Sainato, a former state representative who served with Shapiro in the General Assembly, said he expected the governor to eventually run for president.
“The presidency is in his future,” Sainato said before the start of the news conference. “Whether it’s now or down the road, I don’t know.”
“Josh is a solid guy.”
