Latest news with #VincentDiFonzo
Yahoo
12 hours ago
- Business
- Yahoo
Pa. pharmacists demand state action to regulate PBMs, curb pharmacy closures
A shuttered independent pharmacy in Harrisburg. (Capital-Star photo by Vincent DiFonzo) Last month, pharmacists from across the state travelled to Harrisburg for an urgent meeting with lawmakers. Their goal was to communicate a simple message — pharmacies are closing at an alarming rate, eliminating one of the few places customers can receive free, unscheduled consultations with medical professionals. They warned they're being driven out of business by middlemen in the pharmaceutical supply chain called pharmacy benefit managers, or PBMs. Lawmakers took aim at this problem last year by passing the Pharmacy Benefit Reform Act, which sought to decrease the costs of prescription drugs and regulate PBMs. The legislation was touted by Gov. Josh Shapiro as an example of successful bipartisan reform while he was being considered for the vice presidential nomination. Nearly a year after the law's passage, pharmacists say it has failed to prevent closures. Since January 2024, at least 200 pharmacies have closed across the state. Now, they're asking lawmakers to act again. 'The current PBM system is aptly harming our local pharmacies, jeopardizing patient access to care and threatening the very fabric of our community health infrastructure,' Victoria Elliot, CEO of the Pennsylvania Pharmacist Association, told lawmakers during the meeting last month. Pharmacy benefit managers are companies hired by insurance providers to administer prescription drug benefits of a health plan. They negotiate drug prices, decide what drugs are covered under insurance plans and reimburse pharmacies for drugs dispensed. Theoretically, PBMs secure lower drug prices for patients by streamlining communication between insurance companies, drug manufacturers and pharmacies. Pharmacy advocates insist the opposite is true — that PBMs are raising drug costs and driving them out of business through anticompetitive practices that force them to dispense prescriptions at a loss. Prescription for trouble: Pennsylvania pharmacists say PBMs are driving pharmacy closures The three largest PBMs — CVS Caremark, OptumRx and ExpressScripts — control about 80% of the market and are owned by companies that also own national pharmacy chains and insurance companies. That means pharmacies that don't agree to accept the reimbursement rates they set are likely to lose customers whose insurance plans rely on them. E. Michael Murphy, senior advisor for state government affairs at the American Pharmacists Association and assistant professor of clinical pharmacy at Ohio State University, says low dispensing and reimbursement fees paid to pharmacies by PBMs are a leading cause of closures. 'Oftentimes, when pharmacies dispense a medication for a patient, they're taking a loss on that medication, either in the reimbursement for acquiring that medication from a wholesaler or in the professional dispensing fee,' Murphy said. 'And unfortunately you can only do that for so long before the business model crumbles. That's one of the big reasons that we've seen community pharmacies closing across the country.' Murphy said community pharmacy closures not only hurt small business owners, but also impact the ability of patients to access medications as they have to travel further to pick up prescriptions. 'When a community pharmacy closes, it can have a pretty dramatic impact on the health outcomes of that community,' he said. 'There's concern that can disproportionately affect patients in more marginalized or socioeconomicly vulnerable communities.' Murphy voiced support for ensuring state agencies have the resources to enforce existing laws and regulate 'anticompetitive' PBM practices. Greg Lopes, a spokesperson for the Pharmaceutical Care Management Association, a D.C.-based trade group that represents the country's largest PBMs, says PBMs help, not harm, Pennsylvania pharmacies. 'PBMs recognize that pharmacies provide access for patients to get drugs, so it makes no sense to blame PBMs for pharmacy closures in Pennsylvania,' said Lopes. 'PBMs aren't trying to put pharmacies out of business, in fact, PBMs are supporting community pharmacies in Pennsylvania through programs that increase reimbursement and advocating to allow them to expand the additional clinical services they can offer.' SUPPORT: YOU MAKE OUR WORK POSSIBLE He pointed to 'customer preferences for online options and changing demographics,' as factors driving pharmacy closures. PBM reforms passed with bipartisan support in last year's Act 77, which expanded the Pennsylvania Insurance Department's regulatory power and created new transparency requirements for PBMs operating in the state. But pharmacy advocates say the law didn't go far enough, and pharmacies are still closing at an alarming rate. Rob Frankil, executive director of the Philadelphia Association of Retail Druggists told the Capital-Star that out of approximately 225 pharmacies represented by his organization, 12 have closed since January and 25 closed in 2024. He pointed to low reimbursement as the primary cause. 'Eleven of the 12 pharmacies that my association lost this year are in Philadelphia,' he said. 'They all went out of business because they're not being paid enough for the prescriptions they're filling.' He wants legislation that addresses reimbursement rates directly. One proposal is to require PBMs to reimburse pharmacies based on the average national cost of the medication they're dispensing, plus a fee set by the state that accounts for a pharmacist's time and materials used. Neighboring West Virginia passed a similar law in 2021. A spokesperson for Shapiro, asked if the governor would support further PBM reforms, responded with a quote from the governor's February budget address, highlighting last year's PBM reform law. 'We knew it was a problem that shady middlemen could jack up the cost of prescription drugs while driving our community pharmacies out of business,' the statement said. 'So we came together to pass landmark reforms that bring transparency to how pharmacy benefit managers operate, keep more money in Pennsylvanians' pockets, and protect the small and independent pharmacies we rely on in our communities.' The primary sponsor of that PBM reform law, Rep. Jessica Benham (D-Allegheny), told the Capital-Star that further PBM reform is necessary, but said, 'We are somewhat limited on the state level with what we are able to do.' Benham added that understanding the full impact of Act 77 will take time. She noted the bill required the state Insurance Department to conduct a study on the impact on consumers and pharmacies of future legislation to set a standard dispensing fee of $10.49. They will also study the impact of patient steering and spread pricing on prescription drug costs and pharmacy access. Patient steering is a practice in which PBMs drive customers to their preferred pharmacies, often owned by the same parent company as the PBM. Spread pricing occurs when a PBM pays one price for a drug and reimburses a pharmacy less, profiting off the difference. An Insurance Department spokesperson said the study requires 'specialized expertise.' The department will procure a vendor 'to assist with the development and implementation of the study,' but have not begun this process yet. 'We will have to wait for the results to then move forward on further legislation,' Benham said. As it stands, a number of PBMs are contracted by individual Medicaid providers, and are allowed to set their own reimbursement policies. Frankil told lawmakers last month that dispensing fees can be as low as a dollar. A 2020 study commissioned by a community pharmacy advocacy group found the average cost of dispensing a prescription for a pharmacy is $12.40. One proposal Benham said she supports would have the Department of Human Services, which oversees state Medicaid, use a single PBM to administer Medicaid benefits, an action pharmacy advocates are demanding that has precedent in other states. In 2022, the Ohio Medicaid Department moved to a single PBM to administer Medicaid, with one entity overseeing prescriptions covered by Medicaid. This forced Medicaid managed care organizations to work with a single PBM contracted through the state's Medicaid Department, rather than procuring their own. A 2025 study found this move saved Ohio's Medicaid Department $140 million, saved the state $333 million in administrative costs and allowed $700 million dispensing fees to be paid to pharmacies in the two years since its implementation. Murphy, an Ohio resident, praised this move. 'Oftentimes, when I talk to pharmacists in Ohio, they'll say that Ohio Medicaid is the best and most stable source of revenue for their businesses, which is just indicative of how positive this program has rolled out,' he said. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
4 days ago
- Business
- Yahoo
Pa. Democrats call on GOP to oppose Trump's 'Big Beautiful Bill' as state budget season starts
State Rep. Malcolm Kenyatta (D-Philadelphia) decried the "Big, Beautiful Bill" during a press conference outside Pennsylvania Capitol. (Capital-Star photo by Vincent DiFonzo) Pennsylvania Democrats stood on the Capitol steps in Harrisburg Monday and called on Republicans to oppose cuts to entitlement programs that are working their way through Congress. 'They don't want to talk about this massive negative impact it's going to have on the quality of life of so many Pennsylvanians,' Senate Minority Leader Jay Costa (D-Allegheny), said. 'It's not too late for them to join us, to be part of the discussion that says 'no.'' The proposed federal spending cuts are part of what Republicans call their 'Big, Beautiful Bill,' a budget reconciliation package that includes much of President Donald Trump's agenda. The bill has already passed the and can pass the U.S. Senate with a simple majority vote, which Republicans can muster without Democratic support. The bill would renew Trump's 2017 tax cuts that are set to expire and increase funding for immigration enforcement. To offset the costs, it includes dramatic spending cuts, especially to entitlement programs. Though the nonpartisan Congressional Budget Office found it could add $3.8 trillion to the deficit over the next 10 years. Democrats in Harrisburg say the bill's spending cuts will have dramatic impacts in Pennsylvania. They've warned it could result in hundreds of thousands of Pennsylvanians losing Medicaid coverage, and tens of thousands losing access to food assistance programs like the Supplemental Nutrition Assistance Program (SNAP). The state, they say, does not have the funds to make up for that. Sen. Vincent Hughes (D-Philadelphia), the minority chair of the Senate Appropriations Committee, said there is little room to make up for potential federal cuts with state funding. 'Knowing the state budget the way I know it, we know that we have no capacity to backfill any of those cuts,' he told the Capital-Star. According to the left-leaning think tank Pennsylvania Policy Center, the bill includes roughly $600 billion in cuts to Medicaid spending over 10 years, and would institute new work requirements for people covered through the program. They say the result could mean more than half a million Pennsylvanians would lose health care. Currently, around 23% of Pennsylvanians, or around 3 million people, are covered by Medicaid, according to the state Department of Human Services. Rep. Arvind Venkat, (D-Allegheny), who is also an emergency physician,said before the Affordable Care Act expanded Medicaid, 20% of his patients didn't have health insurance. 'They would come into the emergency department too late for me to treat them, and that is a real thing,' he said. The reason some gave him was the fear of medical debt that they'd accumulate because they were uninsured. He worries that will happen again if more people lose insurance 'We need to call out the cynicism from our Republican colleagues in Congress. On the one hand they're saying they don't want to take coverage from anybody,' Venkat said. 'But then they're happy to brag that they're going to save $1.7 trillion in decreased federal funding. And the only way that happens is if people lose insurance or stop seeking healthcare when they need it.' The bill's Republican defenders say that the cuts are the result of eliminating fraud and waste, and will ultimately reduce spending to help bring a ballooning budget back in line. Republican Sen. Dave McCormick did not respond to questions from the Capital-Star, but addressed the bill at a televised debate with Democratic Sen. John Fetterman Monday morning. He said entitlement spending has been on the rise, and attributed that to an uptick of claims by people for whom benefits were never intended. 'Those are working-age men without dependents, and those are illegal immigrants in a number of cases,' McCormick said. 'So what I'm arguing for is that we need to cut out the use of those programs … by people for whom they weren't designed.' The reconciliation bill would also cut SNAP spending by nearly $300 billion, according to the Pennsylvania Policy Center, by reducing the federal government's share of spending. It would also expand work requirements. As it stands, parents raising dependent children under 18 are not required to meet them, but the bill would lower the age of qualifying dependents to 7. People 55 and older are also not required to meet work requirements, but the bill would change that to 65 and up. Pennsylvania Department of Human Services Secretary Val Arkoosh has warned that 140,000 Pennsylvanians could lose access to the food assistance program with the changes to work requirements. According to the Department's most recent data, in 2023, around 2 million Pennsylvanians received SNAP benefits every month. 'This bill would be the largest cut ever to food assistance in U.S. history,' Costa said. He added that the bill could mean cuts to the Farmers Market Nutrition Program, which pays farmers to provide fresh food for seniors and people who receive Women, Infants and Children (WIC) nutritional assistance programs. Rep. Malcolm Kenyatta (D-Philadelphia), the vice chair of the Democratic National Committee, called on Republicans to join his party in opposition. 'I think we have an opportunity to stop this, but the problem is it's only Democrats out here,' he said. Spokespeople for Senate Majority Leader Joe Pittman (R-Indiana) and Senate President Pro Tempore Kim Ward (R-Westmoreland) did not respond to questions from the Capital-Star. As it stands, the U.S. Senate is likely to make changes to the bill before returning it to the House. A number of Senate Republicans have raised concerns over how much the bill could add to the deficit. Populist Sen. Josh Hawley (R-Missouri) raised concerns about cuts to Medicaid, which he called 'morally wrong and political suicide.' Gov. Josh Shapiro also warned of a steep impact if the House version of the bill is passed. He said that it could impact not just patients, but hospitals that rely on Medicaid funds. 'We've got 25 rural hospitals that right now are operating on a deficit that likely would have to shutter if these Medicaid cuts go in effect,' Shapiro said at a press conference Monday morning in Harrisburg. 'It is certainly my hope that our federal representatives wouldn't vote for something that takes something away from Pennsylvania students or Pennsylvania seniors and everybody in between,' he added.
