NCPA outlines need for legislation protecting community pharmacy in Pennsylvania

ALEXANDRIA, Va. — The National Community Pharmacists Association on Thursday announced the need for legislation in Pennsylvania to protect independent pharmacy operators there. 

“Across the Keystone State 1,005 independent community pharmacies serve patients, employ 10,040 people and contribute greatly to local and state tax revenue,” stated Douglas Hoey, NCPA CEO. “The viability of these small businesses is being undermined by the practices of billion-dollar companies known as pharmacy benefit managers, hired by most health plans to administer prescription drug benefits. For Pennsylvanians, their communities and the future of these pharmacies, we encourage lawmakers to swiftly enact common-sense reforms to achieve a more balanced business relationship between PBMs and community pharmacies.”

Hoey singled out three trends that are particularly in need of legislation and further oversight: 

  • First, in order to care for Pennsylvania patients covered by a given health plan, community pharmacists must sign take-it-or-leave-it contracts from Fortune 500 PBMs, Hoey noted. These contracts give the PBMs full authority to determine how they will reimburse pharmacies, especially for generic drugs, which account for nearly 80% of drugs dispensed. Thus, these small business providers are “flying blind” in terms of taking into account the operating costs of their prescription drug inventory;
  • Second, a pharmacy’s acquisition cost for scores of generic drugs are skyrocketing by as much as 600%, 1,000% or more, but the PBMs continue to reimburse community pharmacies at an outdated, lower price. Pharmacists report repeatedly being faced with loses of $40, $60, $100 or more per prescription as the PBM waits several months before updating its reimbursement rates; and
  • Third, by reimbursing pharmacies at low rates and charging health plans at much higher rates — a practice known as “spread pricing” — the PBMs generate profits while propping up insurance costs for employers, government agencies and consumers. Legislation increasing transparency into pharmacy benefit management could reduce the cost of PBM spread pricing, Hoey said. 

NCPA is working on these issues in conjunction with the Pennsylvania Pharmacists Association, Value Drug Company, the Philadelphia Association of Retail Druggists and the Keystone Pharmacy Purchasing Alliance.

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