Independent pharmacists such as Robert Maher feel trapped, state lawmakers learned Thursday.

A pharmacist knows the people in the community well, from grandparents to parents to kids, Maher said.

They also know the pharmacy in today’s prescription payment system can’t take care of those people without going out of business.

“It’s sad when you see people you know, and you can’t even fill those prescriptions,” Maher said. He has served for years in leadership roles at Klingensmith’s Drug Stores, an independent pharmacy chain with locations in Leechburg and elsewhere in Western Pennsylvania.

Maher and more than a dozen other pharmacists explained their plight to state Rep. Jessica Benham, D-Pittsburgh; Eric Nelson, R-Hempfield, and Valerie Gaydos, R-Allepo, at a roundtable discussion Thursday at Westmoreland County Community College. It was one of a series of public input sessions held across the state in the past year.

Hundreds of pharmacists are facing a conundrum as they struggle with what they say is the unequal relationship between pharmacies and pharmacy benefit managers — third-­party intermediaries between drug manufacturers, pharmacies and insurance providers.

Pharmacy benefit managers reimburse pharmacies for the prescriptions customers buy through insurance.

Greg Lopes, a spokesperson for the industry group Pharmaceutical Care Management Association, said earlier this year that many things factor into pharmacy closures.

“Pharmacy benefit managers are supporting community pharmacies in rural areas, including Pennsylvania, through programs that increase reimbursements,” Lopes said in a statement. “(Pharmacy benefit managers) recognize the vital role pharmacies in Pennsylvania play in creating access to prescription drugs for patients. A strong relationship between (Pharmacy Benefit Managers) and pharmacies means a better experience and more affordability for patients, which is our top priority.”

Independent pharmacy owners have contended these reimbursements are far less than the actual cost of medications, leading to staggering financial losses for them.

Since the beginning of the year, more than 100 independent pharmacy locations in Pennsylvania have shut down, according to the Pennsylvania Pharmacists Association and the state Board of Pharmacy.

“What you’re looking at is a business that’s just going out of business,” said Michael Sheffler of Precision Care Pharmacy in Greensburg. “They’re getting forced out of business by things out of their control. With that, it affects the customer base.

“Look at it from a macro perspective: the customers are going to suffer. That’s the bottom line.”

Pending bipartisan legislation — House Bill 1993 in the state House and Senate Bill 1000 in the state Senate — would put pharmacy benefit managers under more state scrutiny and limit certain practices that pose some of the greatest challenges to pharmacies.

According to Lopes, the Pharmaceutical Care Management Association will fight the proposed legislation.

Senate Bill 1000 was referred to the Health and Human Services committee in January. House Bill 1993 is up for a health committee vote in two weeks. It was referred to the committee in April.

Benham, Gaydos and Nelson all are sponsoring the House bill.

At Thursday’s roundtable, New Stanton Pharmacy’s Shane Daugherty showed a letter sent last year by a pharmacy benefit manager to his pharmacy’s customers that claimed the pharmacy was no longer in-network.

In reality, Daugherty said, he had, in fact, accepted the contract with the benefit manager, and had to call all of his customers to clear up the confusion.

“We’re not only losing money, but we’re also losing money again with our time, taking the time out of our days on Sundays to call all of these patients to tell them that we actually are in-network,” he said.

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Pharmacy struggles

At the discussion, pharmacists and lawmakers mulled the bills’ potential impact and considered what to do with an increasingly dire future for independent pharmacies.

Senate Bill 1000 and House Bill 1993 would direct the state Insurance Department to develop a process for hearing and resolving pharmacy complaints about benefit managers.

The bills would ban certain practices in benefit manager contracts, including “patient steering.” That’s when a pharmacy benefit manager directs a patient to use a “preferred” pharmacy by approving only certain pharmacies and lowering copays for the pharmacies the benefit manager prefers.

Pharmacies must enter into contracts with benefit managers to get reimbursed. They usually have little option other than to accept the terms of these contracts with the companies, even if they are disadvantageous to the pharmacy.

That’s because so many customers’ insurance companies rely on benefit managers to distribute and formulate reimbursements.

Another prohibited practice would be “spread pricing,” in which benefit managers reimburse a pharmacy for a prescription and then bill an insurer or an employer that provides health insurance a higher price for the same prescription.

Benefit managers also would have to be transparent about the amounts of rebates and payments they get from drug manufacturers as well as how they distribute them.

Benham said she plans to push for an amendment to the current House bill to add provisions that would prevent mail-order pharmacies, which pharmacy benefit managers often favor, from counting toward “network adequacy,” a measure of how many pharmacies in a given area are included within a benefit manager’s network.

This, she said, would hopefully push benefit managers to offer better contracts to independent pharmacies so they include enough brick-and-mortar pharmacies in their network to meet the requirement.

“If local pharmacies are turning down contracts and saying, ‘That doesn’t meet my needs. I’m going to lose money on that,’ they’re going to have to come back with a better contract,” Benham said.

Dark days ahead?

The proposed legislation does not address all the challenges of the relationship between pharmacies and pharmacy benefit managers. It does not directly change Medicaid reimbursements, Benham said, because of a “single-subject” rule against dealing with multiple departments in one piece of legislation.

Gaydos said it might take time for the transparency piece of the legislation to pull together data.

“We know that does not help today,” she said. “We know this is a crisis.”

Nelson said it was part of the group’s bipartisan goal to encourage Gov. Josh Shapiro to set aside money for reimbursement reform in this year’s budget.

“We need to work both ends of the candle — reimbursement and transparency,” he said.

Chris Antypas, who is an owner of four pharmacies and president of the Pennsylvania Pharmacist’s Association, said addressing low reimbursements is extremely important. He shared a dire prediction of the future if this legislation and future legislation does not regulate pharmacy benefit managers and reimbursements: More and more pharmacies will close.

“When we leave, nobody’s coming back. We’re not going to go through this again,” he said. “If our reimbursement doesn’t change as a result of this, then we have to make the business decision to get out before it’s far too late and we’ve lost even more.”

He thanked the state representatives for their work so far on the bills.

“The gap that is felt in a community when a pharmacy leaves is almost hard to describe,” Antypas said. “At the end of the day, as I said, we’re just going to be gone. Real people, our own families, are going to be the ones that are left holding the bag. We don’t have three years.”

Ed Christofano of Hayden’s Pharmacy, which has locations in Youngwood, Mt. Pleasant and Donegal, said low reimbursements can even cause pharmacies to lose money on essential opioid-epidemic recovery drugs such as Narcan.

“Enough is enough. You cannot continue to expect the independent pharmacies to be under the thumb of (pharmacy benefit managers), losing money to do their job in service of the community,” Christofano said.

“It’s about fighting for patients’ accessibility and their choice in where they want to go.”

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