CENTER SQUARE- State lawmakers took aim at the corporate megaliths that pharmacists say are squeezing out competition, creating pharmacy deserts and forcing independent owners to shutter their doors.
Sen. Katie Muth, D-Royersford, said during a Senate Democratic Policy Committee hearing that large chain pharmacies and their partnerships with insurance companies “have dominated the market” with “anti-competitive practices,” putting access out of reach for many.
Pharmacy deserts occur when residents in rural areas have to travel more than five miles and those in urban areas have to travel more than one mile to receive care.
Distance is compounded by the fact that many who are in the most dire need of access live with disabilities that limit their mobility. When large chains avoid locations in high-crime areas, low-income residents and people of color suffer additional hardships.
Richard Ost, managing partner at Somerset Pharmacy, presented legislators with a map of Philadelphia showing CVS locations dotting along the perimeter of a three-mile gap in the city, demonstrating a desert for residents of Germantown, Allegheny West, North Philadelphia, and Strawberry Mansion.
Bills in both the House and Senate have been put forward with bipartisan support to create government oversight of Pharmacy Benefit Managers, or PBMs. PBMs administer contracts between insurance providers and pharmacies, setting the costs of medication and pharmacists’ reimbursement rates.
As it stands, “the big three” – Caremark, Express Scripts and Optum – control over 90% of the prescriptions filled in the nation.
Rob Frankil, executive director of the Philadelphia Association of Retail Druggists, said this creates “a lopsided world where pharmacies have no leverage to negotiate a contract for fair reimbursement, or in many cases, even to be in a network.”
Independent pharmacists like Chris Antypas, owner of Asti South Hills Pharmacy in Pittsburgh, say they’ve had enough and residents can expect the closures of independent pharmacies to continue.
“I’m going to get out and go and sell candy bars because it’s a whole heck of a lot easier,” Antypas said.
The pharmacists who testified emphasized the vital and dynamic role they play in healthcare, as they are often more accessible than the patients’ doctors. Pharmacists are called upon for more than just medication but also expertise and care, essential elements that are lost, they say, in profit-based business models.
Nationwide, there have been over 300 pharmacy closures in the first three months of 2024 with no signs of slowing. Seventy of those were in Pennsylvania and 30 of them were independent.
Grocery store pharmacies – which occupy a middle ground between giants like CVS and independent retailers – say they, too, suffer from the issues created by PBMs.
“It’s remarkably simple math,” said Nick Cicco, vice president for pharmacy at Weis Markets and president of the Pennsylvania Association of Chain Drug Stores. Pharmacies close when they are paid less than their cost of drugs.
According to Cicco, in 2023, the PBM market in the United State was valued at just under $492 billion and is expected to reach nearly $681 billion by 2029. Pennsylvania only collects $35 in registration fees for PBMs.
A host of measures, included in Senate Bill 1000, would provide oversight for PBMs, forcing them to be transparent about how they use rebates from drug companies and prohibiting them from steering patients to specific pharmacies.
“Corporate greed should not stand between Pennsylvanians and their prescriptions. PBMs currently act as an unchecked, unregulated middleman in the pharmaceutical industry,” asserted Sen. Lindsey Williams, D-Pittsburgh, who noted that the issue is “jeopardizing patient lives.”
