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.

I know, you may have had to read that sentence a second time. Better said, PBMs are “middlemen,” intended to negotiate prices and discounts between prescription drug manufacturers, insurers and pharmacies.

Unfortunately, what was intended to be a benefit to consumers has become anything but.

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. Here’s an example why.

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.

But pharmacists have said reimbursement rates have lowered so substantially that they are losing money.

Worse yet, three of the most dominant PBMs are CVS Caremark, OptumRX and Express Scripts. They are owned by three of the largest health care conglomerates in the country—Aetna, United Healthcare and Cigna. This means these three entities have cornered over 80% of the prescription drug pharmacy benefit market.

The phrase “pharmacy deserts,” authored by The Center for Rural Pennsylvania, describes the severity of the issue. As of 2022, 27% of Pennsylvanians live more than 5 miles away from a pharmacy. Also of note, 21 of Pennsylvania's 67 counties have fewer than 10 pharmacies.

Not many initiatives in Harrisburg have a bipartisan solution, but thankfully, this one does.

House Bill 1993, of which I happily serve as a co-sponsor, will require PBMs to report financial information on rebates and payments received from drug manufacturers and how those rebates and payments were distributed by the PBM. In addition, the legislation will limit or ban several practices by PBMs, including patient steering and spread profit schemes.

Finally, the Pennsylvania Insurance Department would develop a process for hearing and resolving pharmacy complaints against PBMs.

House Bill 1993 passed on the House floor 198-4. Identical legislation, Senate Bill 1000, was recently passed by its chamber’s Health and Human Services Committee 11-0.

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

Here are some additional news topics and reminders I would like to share.
Dragon Egg Hunt Underway - I am so excited to announce a fun way to explore our local communities! My Dragon Egg Hunt coincides with a resolution I have sponsored recognizing Aug. 17, 2024, as International Geocaching Day in Pennsylvania. 

I partnered with Dash Printworks, which has placed dragon eggs that can be searched for solo, as a family or with a team. If you find an egg, please read the enclosed note. Clues on where to find the eggs can be found at RepJillCooper.com, as well as on my Facebook and Instagram pages. 

DISCLAIMER: Safety is paramount! Eggs will not be placed on private property or in locations that are dangerous or hazardous. If in your adventure, you or your party find yourselves in a hazardous environment or on private property, please re-evaluate the clues and hints.

Growing PA’s Meat-Processing Businesses - The Pennsylvania Department of Agriculture is now accepting applications for its 2024-25 Very Small Meat and Poultry Processor Reimbursement Grant Program. 

The grant program supports the development and expansion of current or future meat and poultry processing operations across Pennsylvania, offering reimbursement funds to cover costs associated with opening or expanding operations, or obtaining a grant of inspection from the U.S. Department of Agriculture’s Food Safety Inspection Service.

A total of $500,000 is available for 2024-25, with a maximum grant amount of $100,000. Applications can be submitted through the Single Application for Assistance online applications system and are due by 5 p.m. Friday, Aug. 2. Additional information is available here.

Fair Scheduled for July 27 – Be certain to mark your calendar for my Community Health, Wellness and Career Fair, being held on Saturday, July 27, from 10a.m. to 1p.m. at Knead Café, Banquet on Barnes, 1011 Barnes St. in New Kensington. This free event is available to residents throughout the 55th District. Meet the organizations that serve our neighborhoods! There will also be a prize raffle and live bloodhound demonstration. 

Representative Jill Cooper
55th Legislative District
Pennsylvania House of Representatives