Independent Pharmacies in Pennsylvania Continue to Face Challenges from PBM Business Practices
By Consumers for Quality Care, on June 20, 2024
Independent pharmacies throughout Pennsylvania are struggling to stay in business, thanks to the monopolistic practices of pharmacy benefit managers (PBMs), according to Pennsylvania Capital-Star.
Bob Schreiber of Morrisville opened Burns Pharmacy in 1977. His business was a fixture in the community, and he ran it successfully for decades until 2016. That’s when the prevalence of huge, corporate PBMs started to hurt his bottom line. The losses eventually became so large and unsustainable that in 2019 he sold the business. Schreiber was crestfallen over the forced sale, stating, “It just got progressively worse. The last two years that I was in business, we lost money, which I had never seen in my 42 years.”
Increasingly, PBMs are squeezing these independent pharmacies from both sides. Some independent owners noted that they get charged high and unpredictable fees by PBMs, while reimbursements are typically insufficient, not increasing in pace with their costs. Although they see these fees as unfair, owners of independent pharmacies feel obligated to accept them, often dispensing medicine at a loss in order to avoid losing access to a PBM’s network and their large customer base. This trend is only increasing with little signs of slowing down, and more independent pharmacies are shutting their doors. Nearly 70 chain and independent pharmacies across the state have permanently shut down so far this year, according to the Pennsylvania Pharmacists Association.
Pat Lavella, the former President of the Pennsylvania Pharmacists Association, explained how PBMs are negatively affecting patient care in rural areas and small towns, stating, “pharmacies are the front line of medical care in many of these small communities. If we go away, those questions don’t get answered and those problems don’t get treated.”
Lawmakers are starting to take notice of the outsized power of PBMs and are listening to the concerns of Bob Schreiber and other mom-and-pop pharmacy owners. State Senator Judy Ward is one of many Pennsylvania legislators who have introduced bills which would give the Pennsylvania Insurance Department more enforcement and regulatory power over PBMs.
If left unchecked, PBMs will continue to engage in anticompetitive business practices, forcing independent pharmacies to shut their doors and limiting consumers’ ability to access their medications. CQC urges lawmakers and regulators to continue scrutinizing PBM activities and take action to ensure access to affordable care for all consumers.
