Westmoreland Review

Jul. 03, 2024

Healing a Broken Pharmacy System

According to the National Association of Insurance Commissioners, Pharmacy Benefit Managers (PBMs) are third-party companies that function as intermediaries between insurance providers and pharmaceutical manufacturers.

"PBMs are 'middlemen,' intended to negotiate prices and discounts between prescription drug manufacturers, insurers and pharmacies," said Rep. Jill Cooper (R-Westmoreland).

However, what was intended to benefit consumers has become problematic.

Last month, it was reported that Pennsylvania lost 140 independently owned pharmacies since 2024 began. The reason for the closings is largely blamed on the PBM system.

"Perhaps you’ve dropped off a prescription for a brand name drug at your local pharmacy. Your copay (likely) covers some of the pharmacy’s cost to buy the drug. The PBM is supposed to reimburse the pharmacy for the rest of the cost," Cooper explained.

Pharmacists have indicated that reimbursement rates have lowered so substantially that they are losing money.

Three dominant PBMs—CVS Caremark, OptumRX, and Express Scripts—are owned by three of the largest healthcare conglomerates in the country: Aetna, United Healthcare, and Cigna. These entities control over 80% of the prescription drug pharmacy benefit market.

The term "pharmacy deserts," coined by The Center for Rural Pennsylvania, highlights this issue's severity. As of 2022, 27% of Pennsylvanians live more than five miles away from a pharmacy. Additionally, 21 out of Pennsylvania's 67 counties have fewer than ten pharmacies.

Few initiatives in Harrisburg have bipartisan support; however, this one does.

House Bill 1993 requires PBMs to report financial information on rebates and payments received from drug manufacturers and how those rebates and payments were distributed by the PBM. It also aims to limit or ban several practices by PBMs, including patient steering and spread profit schemes.

Furthermore, under this legislation, the Pennsylvania Insurance Department would develop a process for hearing and resolving pharmacy complaints against PBMs.

House Bill 1993 passed on the House floor with a vote of 198-4. Identical legislation in Senate Bill 1000 recently passed its chamber’s Health and Human Services Committee with an 11-0 vote.

"Public transparency and a level playing field between large companies and small businesses is an important part of fixing these issues," Cooper stated. "Ultimately, consumers will benefit by having more options and more competitive pricing."

Additional news topics:

Dragon Egg Hunt Underway - Rep. Cooper announced an initiative coinciding with International Geocaching Day on Aug. 17, encouraging community exploration through a Dragon Egg Hunt organized in partnership with Dash Printworks.

Growing PA’s Meat-Processing Businesses - The Pennsylvania Department of Agriculture is accepting applications for its Very Small Meat and Poultry Processor Reimbursement Grant Program for fiscal year 2024-25 until Aug. 2 at 5 p.m., offering up to $100,000 per grant from a total fund pool of $500,000.

Fair Scheduled for July 27 – A Community Health, Wellness & Career Fair will be held on July 27 from 10 a.m. to 1 p.m., featuring various organizations serving residents throughout the district along with activities such as prize raffles and live demonstrations.

Representative Jill Cooper

55th Legislative District

Pennsylvania House of Representatives