SHUTTERED DRUGSTORES
Pittsburgh area pharmacists blame ‘draconian’ contracts
Reimbursement cuts that are forcing drugstores to fill many prescriptions at a loss are pushing pharmacists out of business, including a dozen that have closed in Western and Central Pennsylvania in recent months, store owners told a state Senate hearing Monday.
The three big pharmacy benefit managers that dominate the wholesale drug market are forcing drugstores to pay more for drugs than pharmacists are paid to fill the prescription, Chris Antypas, president of Asti’s South Hills Pharmacy in Castle Shannon, told members of the Pennsylvania Senate Democratic Policy Committee. Losses from filling prescriptions, such as the new class of diabetes and weight-loss drugs such as Wegovy and Ozempic, can mean having to cover $150 of the cost, causing more stores to turn out the lights, he said.
“I’m just so fed up,” Mr. Antypas said. “I just can’t continue to do this. The math just doesn’t add up. Can we get past politics to get meaningful legislation passed?”
State Democratic Sens. Katie Muth, of Chester County, and Art Haywood, of Montgomery County, co-chaired the hearing, which was intended to inform lawmakers on legislative issues. Companion bills in the state House and Senate would enable the state Insurance Department to resolve complaints between pharmacists and pharmacy benefit managers and prohibit PBMs from steering patients to their own retail drug suppliers.
House Bill 1993 and Senate Bill 1000 have each been referred to committees for review.
The hearing came as the National Community Pharmacists Association, a trade group in Alexandria, Va., called for revisions to supplier contract terms that the group described as draconian for pharmacists. NCPA sharply criticized Express Scripts Inc., which is owned by health insurer Cigna, for conditions imposed on drugstores to participate in ESI’s Medicare Part D pharmacy network.
“ESI should immediately address these concerns before more independent pharmacies close,” NCPA CEO B. Douglas Hoey wrote in a letter Monday to ESI President Adam Kautzner. “Almost one independent pharmacy a day closed its doors for good last year, a pace that’s continuing into 2024 so far.”
Robert Frankil, executive director, Philadelphia Association of Retail Pharmacists, said between 70 and 80 drugstores were expected to close this year, leaving consumers with longer distances to travel to get prescriptions filled and creating “pharmacy deserts.”
“It’s simply because they’re not getting paid enough for the product,” he said.
Locally, Cambria County- based Mainline Pharmacy closed nine of its 11 stores last month and Yough Valley Pharmacy closed its drugstore in Confluence in February after 40 years in business. They were among stores that owners said were shut down because of reimbursement cuts by pharmacy benefit managers.
Some pharmacists blamed a new ESI contract that went into effect in January, which they said contained reimbursement cuts up to 9% since 2015. In a statement, ESI said “any savings we achieve are passed directly to Medicare beneficiaries and our clients.”
The reimbursement issue has reached a crisis, Richard Ost, managing partner, Somerset Pharmacy LLC in Philadelphia, told the senators.
“I don’t think we have enough oxygen to survive six months,” he said. “This is a crisis. As pharmacies close, it’ll happen quickly. We’re not bleeding; we need stitches. It’s time to protect the pharmacist.”