HARRISBURG April 16, 2024 – State Senator Katie Muth (D-Chester/Montgomery/Berks), chair of the Pennsylvania Senate Democratic Policy Committee, and Senator Art Haywood (D-Montgomery/Philadelphia) co-hosted a virtual public hearing yesterday on Zoom to discuss how pharmacy closures across Pennsylvania are impacting already underserved communities. 

The Senate Democratic Policy Committee hearing featured two panels of testimony that included the perspective of both independent pharmacies and larger chain pharmacies – both groups citing the challenges they are facing due to pharmacy benefit managers (PBMs).

“Yesterday’s hearing highlighted the issues faced by independent pharmacies that serve our communities, including the negative impacts of Pharmacy Benefit Managers (PBM) contracts that force independent pharmacies to accept unfavorable contracts with low reimbursement rates,” Muth said. “The monopolies created by large chain pharmacies that are tied in with insurance companies and PBMs have dominated the market with their anticompetitive practices leading to rising prices, closures of independent pharmacies, and forcing people to drive ten plus miles to access prescription drug services with increased costs and inconvenience.”

PBMs administer prescription drug plans for health insurance plans. In the US, three pharmacy benefit managers control about 80 percent of the market – CVS Caremark, Cigna’s Express Scripts and UnitedHealth’s Optum Rx. Testifiers at the hearing indicated that this structure, and the tactics used by PBMs, drive up costs, lower reimbursement rates for independent pharmacies, and limit networks by steering patients to their own pharmacy or mail order pharmacy.

“I’m so glad that we are having this conversation. We know that individuals face challenges in access to local pharmacy services. For some, the challenge is transportation; for others, it’s income or a combination of other factors. But we can figure out and address these challenges,” Haywood added. “I am eager to explore all the issues and learn about how we in the General Assembly can act to remedy some of the damage that has already been caused by closures and how we can prevent further closures, particularly in neighborhoods of need.” 

According to a CBS news report in March, more than 307 independent pharmacies have closed nationwide in the past three months. Testimony at the hearing provided by the Philadelphia Association of Retail Druggists indicated that since January 1, 2024, over 70 pharmacies have closed in Pennsylvania – including over 30 independent pharmacies and over 40 chain pharmacies.

“Corporate greed should not stand between Pennsylvanians and their prescriptions. PBMs currently act as an unchecked, unregulated middleman in the pharmaceutical industry,” Sen. Lindsey Williams (D-Allegheny) said. “The hearing demonstrated the need for reform before more pharmacies go out of business, jeopardizing patient lives.” 

The three Senators are all cosponsors of Senate Bill 1000, a bipartisan bill that would give the Commonwealth more oversight of PBMs by directing the Insurance Department to develop a process for hearing and resolving pharmacy complaints against a PBM. The bill would require PBMs to be more transparent and limit or ban several practices by PBMs. The bill is currently in the Senate Health and Human Services Committee.

Participants in the hearing included Robert Frankil, Executive Director, Philadelphia Association of Retail Druggists; Richard Ost, Managing Partner, Somerset Pharmacy LLC; Chris Antypas, President, Asti’s South Hills Pharmacy; and Nick Cicco, President, Pennsylvania Association of Chain Drug Stores. 

For more information on this policy hearing and to access all submitted testimony and a full recording of today’s hearing, visit www.SenatorMuth.com/policy.

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Panel 1: Independent Pharmacists

Panel 2: Chain Pharmacies