State representatives will discuss regulation of pharmacy benefit managers during a roundtable event

Western Pennsylvania state officials will hold a roundtable discussion Thursday at Westmoreland County Community College to discuss proposed regulations for pharmacy benefit managers with regional stakeholders.

State Reps. Jessica Benham, R-Pittsburgh, and Eric Nelson, R-Hempfield, will host a discussion from 8 to 10 a.m. to discuss Benham’s bipartisan bill, which aims to address the complaints of independent pharmacy owners across the state. The event will be held at 145 Pavilion Lane in Youngwood, in the Student Achievement Center.

Pharmacy benefit managers are third-party intermediaries between drug manufacturers, pharmacies and insurers. They reimburse pharmacies for prescriptions that customers buy with insurance.

Independent pharmacy owners say reimbursements are much lower than the actual cost of the drugs. Low reimbursements can cause pharmacies to lose money on every transaction, especially for new, expensive brand-name drugs like Ozempic.

Mainline Pharmacy, which closed nine of its 11 locations earlier this year, said it lost more than $350,000 on about 17,500 prescriptions filled in early 2024 due to low reimbursements from benefit managers.

Related:

• From billionaire Mark Cuban to independent store owners, there is no shortage of criticism of pharmacy benefit managers

• Here’s why pharmacies are on a financial precipice

• Bitter Pill: Customers Lament Loss of Small-Town Pharmacies as Reimbursement Formulas Become Unsustainable

Benham’s House Bill of 1993 would have imposed more regulations at the state level on pharmacy benefit managers. It would direct the state insurance department to develop a process for reviewing and resolving pharmaceutical complaints against companies.

The bills would prohibit certain practices in benefits manager contracts, including “patient steering,” in which a pharmacy benefits manager directs a patient to use a preferred pharmacy by approving only certain pharmacies and reducing co-pays for pharmacies preferred by the benefits manager.

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

Benefits managers would also have to be transparent about the amounts of rebates and payments they receive from drugmakers, as well as how they are distributed.