Gov. Josh Shapiro is touring the state to tout new legislation reforming the practices of pharmacy benefit managers, also known as PBMs.
PBMs act as a middleman between insurance providers, drug manufacturers and pharmacies.
Gov. Shapiro spoke at a ceremonial bill signing on Friday at Thompson’s Pharmacy, an independent chain in Hollidaysburg and Altoona. He said a new law gives the state regulatory oversight over PBMs to end predatory practices, including one called “steering.”
“PBMs would steer customers to different pharmacies. Oftentimes, it was favoring the chains that actually own the PBM. So rather than getting your medication at a local independent pharmacy like Thompson’s, you'd have to travel further from home," Shapiro said.
Bill Thompson, the owner of Thompson’s Pharmacy, said many independent pharmacies have had to close because of harmful PBM practices.
“We still have work to do to ensure the long term viability of independent pharmacies in Pennsylvania. We cannot have any more pharmacies, community pharmacies, closed in the state of PA," Thompson said.
Other lawmakers at the event said PBMs underpaid pharmacies for prescriptions. This law prevents PBMs from paying independent pharmacies less than the amount they reimburse their own affiliated pharmacies.
State Sen. Judy Ward, who represents the 30th district, said she learned about harmful PBM practices after talking with Thompson.
“I could not wrap my brain around this. I said, ‘you pay for the drugs, but you don't get reimbursed for the full amount. How does anybody run a business like that?’ He said, ‘that's the point, Judy,’” Ward said.
Gov. Shapiro signed the new law on July 17.
