CENTRAL CITY (TNS) — At the senior center on Sunshine Avenue, 86-year-old Dan Bulger worried about the future of the town’s only drugstore just across the street.

“We depend on that pharmacy,” said Bulger, a retired insurance broker. “That would be a big loss to the town.

“They’re hometown people.”

Penn Laurel Pharmacy has been an anchor for years in Central City, population less than 1,000, many of whom are elderly. Now, a contract dispute between the drugstore owner and a big pharmacy benefit manager threatens to close the store along with five other pharmacies in the family-owned chain that dates to the 1960s.

The closing of the store would mean driving 16 or 17 miles to the nearest pharmacy, Bulger said. Getting there on the area’s winding roads in winter could be difficult.

Penn Laurel is owned by Martella Pharmacies and the sting of the closings would be felt most in the Somerset County coal mining towns of Central City, Windber and Boswell, where Martella drugstores are the only places to fill prescriptions.

On Friday, Martella filed a four-count lawsuit in Cambria County Common Pleas Court seeking class-action status against pharmacy benefit manager Express Scripts and others to stop the company from ending its contract with the pharmacy. The agreement was to end Monday, which would’ve meant that up to 80% of the prescriptions Martella fills would suddenly cost consumers much more because the drugstore would be out of the Express Script network.

A court injunction issued shortly after the lawsuit was filed has put the contract termination on hold for now.

Highmark Inc. and UPMC Health Plan, which dominate the region’s health insurance market, were among the defendants named in the case because they “acted in coordination” with Express Scripts to “remove Martella’s Pharmacies as an in-network provider,” according to the lawsuit filed by Matthew J. Scanlon, from the Pittsburgh law firm of Scanlon & Wojton.

In a statement, Express Scripts said Martella’s was being cut from its network because the pharmacy “failed to properly disclose” disciplinary histories with state and federal regulators regarding the safeguarding and dispensing of controlled substances.

“These failures to disclose as well as the underlying conduct at issue violate the quality and safety standards in our provider manual and provider agreement,” the company said.

Highmark and UPMC both contract with Express Scripts, which like other PBMs, acts as a middleman between health insurers and pharmacies in developing and managing prescription drug plans for employers. Express Scripts also operates a mail-order pharmacy of its own.

Highmark and UPMC officials declined to comment on the lawsuit.

Express Scripts did not disclose further details about its decision to cut Martella, but the contract issues may be related to the indictment of former owner Joseph Martella on 108 counts related to the illegal distribution of narcotics in 2018. He pleaded guilty to the charges in 2020 and was sentenced to probation and a fine of $3,000.

More recently, former Martella employee Matthew Miller was charged with stealing $30,000 worth of narcotics and other medications in 2022. He pleaded guilty to one felony and was sentenced to 18 to 36 months in prison.

Jacqueline Martella, current owner of the Johnstown-based chain, did not return calls for comment.

The Cambria County lawsuit is the latest to challenge PBM power to control drug pricing, which include one filed earlier this year by the Michigan attorney general against Express Scripts and others. The lawsuit alleges that reimbursement to independent pharmacies was purposefully suppressed, which contributed to drugstore closings and restricted patient access to prescriptions.

The claims have been echoed by many independent pharmacy owners in recent years.

The challenge to PBM power comes as a raft of independent drugstores have closed in the region.

Last year, nine of 11 Mainline Pharmacy stores closed in the Johnstown area because of losses blamed on PBM reimbursement for filling prescriptions, and the Rite Aid chain declared bankruptcy for a second time in May, closing dozens of stores across the state including eight stores in Cambria County and “overwhelming remaining pharmacies and leaving the region medically fragile,” according to the lawsuit.

A hearing on the court injunction in the Martella case is scheduled Wednesday in Ebensburg.

Mark Pasquerilla, a real estate developer based in Johnstown, said Martella has a reputation for service, sometimes filling prescriptions at night for patient emergencies. No other pharmacy does that, he said.

“What is going on here and who is benefiting?” Pasquerilla said. “This is outrageous.

“It really makes no sense to me why this is being allowed to happen,” he said.