HARRISBURG \u2014 As pharmacy closures have continued across the state, a bipartisan group of lawmakers has questioned how the Shapiro administration is following through on the promises of a 2024 law meant to support these stores.<\/p>\n
They\u2019ve also questioned the state\u2019s oversight of corporate middlemen, known as pharmacy benefit managers (PBMs), who manage drug plans for employers and insurance companies. Critics say they harm patients by driving up drug costs and community pharmacies by offering insufficient reimbursements.<\/p>\n
State Sen. Lindsey Williams (D., Allegheny) \u2014 one of six lawmakers who signed a July letter raising concerns about the enforcement of the bipartisan and much-touted law known as Act 77 \u2014 told Spotlight PA she wants pharmacists to feel that PBMs truly are being held accountable.<\/p>\n
\u201cThat\u2019s what this legislation is trying to do,\u201d she told Spotlight PA. \u201cAnd I\u2019m hoping that we can push it along to make sure that it fulfills its intent.\u201d<\/p>\n
When Democratic Gov. Josh Shapiro signed Act 77, he said PBMs\u2019 \u201cgreed and conduct\u201d were primarily to blame for independent pharmacy closures and that they \u201cmanipulate and profit off of the pharmaceutical system, screwing over consumers and our community pharmacies along the way.\u201d The law limits practices that critics say PBMs use to unfairly make profits and forces them to disclose key information about rebates and administrative fees.<\/p>\n
But the law \u2014 for a number of reasons \u2014 has not stopped hundreds of pharmacies from closing over the past year.<\/p>\n
Now, lawmakers and pharmacists are reckoning with its limits \u2014 and the question of whether it will live up to the hopes that surrounded its passage. Earlier this year, the Pennsylvania Pharmacists Association warned closures would continue without further state action<\/a>.<\/p>\n \u201cSome of the things that we thought would be cleared up with Act 77 are not,\u201d state Sen. Judy Ward (R., Blair) told Spotlight PA in July. \u201cThat\u2019s disappointing to me.\u201d<\/p>\n The law\u2019s protections and requirements only apply to some health insurance coverage \u2014 about 24% of the state\u2019s market, according to the Shapiro administration. Included are fully-funded commercial plans \u2014 the kind people buy on their own or that their employer purchases \u2014 though an Insurance Department spokesperson told Spotlight PA the state can only regulate contracts issued in Pennsylvania, citing two court cases. That out-of-state exclusion has concerned some pharmacy advocates.<\/p>\n Despite the limits, Pennsylvania Insurance Commissioner Michael Humphreys said earlier this year<\/a> that new oversight under the law \u201cbrings needed transparency and fairness to our healthcare system for all Pennsylvanians.\u201d<\/p>\n But in a letter <\/a>dated July 1, Ward and five other state senators told Humphreys that pharmacies \u201cstill grapple with unsustainable reimbursement rates, predatory practices, and operational pressures that threaten their ability to serve communities\u2014especially in underserved and rural areas.\u201d Four Democrats and two Republicans signed it.<\/p>\n \u201cEffective policy requires effective implementation and enforcement, and we are concerned that is not occurring,\u201d they wrote in the letter, which Spotlight PA obtained through the state\u2019s open records law.<\/p>\n Closures continue<\/p>\n Shapiro administration officials have pushed back and defended their approach, and they\u2019ve continued to express optimism for the law\u2019s ability to assist pharmacies. In a July response<\/a>, Humphreys acknowledged \u201cconfusion\u201d over the timeline for the law\u2019s rollout. But he said his agency \u201cdoes plan to avail itself of all the tools in Act 77\u201d to ensure that benefit managers \u201care complying.\u201d<\/p>\n Insurance Department spokesperson Diego Sandino told Spotlight PA in November that lawmakers wrote a staggered implementation timeline into Act 77 and that the agency \u201cis implementing this law as written and passed.\u201d Most of the law\u2019s major protections aren\u2019t in effect yet, Sandino said.<\/p>\n \u201cAct 77 does have limitations,\u201d he said, \u201cbut those limitations are clearly set forth in the language of the legislation and based on principles of state jurisdiction and federal preemption.\u201d<\/p>\n Meanwhile, pharmacies and patients continue to struggle with the impact of closures, as they can force patients to travel farther, wait longer, and even fall through the cracks.<\/p>\n About 1,100 licensed Pennsylvania pharmacies went out of business from early 2020 to early November of this year, according to Department of State records. While some new ones opened, the data showed a net loss of hundreds of pharmacies.<\/p>\n About 500 of those closures appear to have been Rite Aid stores.<\/a> That company had its own set of financial problems, but Spotlight PA reported in July that its collapse highlighted bigger problems facing the industry<\/a>.<\/p>\n State data shows hundreds of the closures occurred after Act 77 became law. Many were Rite Aid locations, although the list also includes other big chain stores and smaller operations.<\/p>\n Deron Shultz, CEO of Minnich\u2019s Pharmacy in York County, told lawmakers that customers found his employee-owned business after having trouble filling prescriptions elsewhere.<\/p>\n \u201cThey say, \u2018We haven\u2019t had our blood pressure medicine in four days. We haven\u2019t had our mental health meds in a week,\u2019\u201d Shultz told lawmakers in September. \u201cHow do we fix that? Our community health workers, our pharmacists, our technicians are tracking down one, two, three doctors at a time to get all those prescriptions.\u201d<\/p>\n A spokesperson for an association that represents PBMs says \u201cit makes no sense to blame\u201d them for pharmacy closures in the state. The group<\/a> says these companies work to reduce drug costs and save money for patients and the broader health care system.<\/p>\n \u201cIndependent pharmacies often point the finger at PBMs instead of acknowledging that there are many factors that influence closures,\u201d said Greg Lopes, a spokesperson for the Pharmaceutical Care Management Association.<\/p>\n Those reasons, Lopes said, include high prices from drug companies, customer preferences for online choices, and population declines in rural areas.<\/p>\n Act 77 was designed to address a number of problems by putting new requirements on prescriptions filled through some insurance plans. It was intended to help level the playing field between pharmacies and PBMs.<\/p>\n Patient steering: Community pharmacists and their advocates say PBMs steer patients to their own pharmacies<\/a>, making it harder to compete and limiting the ability of patients to make their own choices.<\/p>\n Under the law, insurance plans and benefit managers can\u2019t require patients to purchase prescription drugs exclusively through a mail-order pharmacy or a retail pharmacy affiliated with a PBM. They also cannot use financial incentives for the exclusive benefit of a retail pharmacy affiliated with a benefit manager.<\/p>\n Clawbacks: The Shapiro administration said PBMs artificially inflate copays for patients so they can profit. If a patient paid $20, for instance, but the drug\u2019s actual cost was $5, the benefit managers would \u201cclaw back\u201d <\/a>the $15 difference for profit, the Shapiro administration said. Pharmacists have said gag clauses<\/a> in contracts have prevented them from telling patients when it would be cheaper to buy the drugs without insurance.<\/p>\n The law puts new limits on clawbacks, saying a pharmacist can\u2019t charge more for a covered prescription drug than what it would cost to buy the drug without insurance.<\/p>\n Spread pricing: Some advocates also say PBMs\u2019 use of \u201cspread pricing\u201d<\/a> \u2014 charging insurers more than they pay pharmacies \u2014 hurts both consumers and pharmacies. A version of the bill<\/a> that became Act 77 would have banned spread pricing, but that language was removed in the GOP-controlled state Senate.<\/p>\n The final version of Act 77 empowers the Insurance Department to review the impact of steering and spread pricing on the cost of prescription drugs and pharmacy access.<\/p>\n Transparency: Some lawmakers, the Shapiro administration, pharmacy industry advocates, and others say much of the work of PBMs is opaque.<\/p>\n Act 77 puts new transparency requirements on them, including requiring an annual report beginning next year that must include information on administrative fees, rebates, and descriptions of any differences in reimbursements for affiliated and nonaffiliated pharmacies. The Shapiro administration said increased transparency requirements will prevent PBMs \u201cfrom hiding predatory practices that drive up profits.\u201d<\/p>\n Enforcement concerns<\/p>\n But, despite those new powers and restrictions, some lawmakers are concerned with the law\u2019s rollout.<\/p>\n In their letter to the Insurance Department, the six state senators shared detailed questions about the agency\u2019s actions.<\/p>\n They asked about guidance for typically high-cost specialty drugs, appeals received, the status of a study into patient steering and spread pricing, and the department\u2019s interactions with PBMs. They wrote that the legislature did not empower the Insurance Department \u201cfor the agency to ignore the primary industry at which Act 77 was intended to address.\u201d<\/p>\n At the same time, they also sent separate questions to the Pennsylvania Department of Human Services about prescriptions filled through the state\u2019s Medicaid program<\/a>, which is not covered by Act 77 but is overseen by the Shapiro administration. Lawmakers wrote that some reimbursements through Medicaid \u2014 intended for low-income people \u2014 are \u201calarmingly low.\u201d<\/p>\n In response<\/a>, Human Services Secretary Valerie Arkoosh described a number of changes made and enforcement actions taken in recent years, as well as \u201ca significant reduction in pharmacy complaints.\u201d<\/p>\n Lawmakers followed up with a legislative hearing in September<\/a> and another letter to the Shapiro administration in October \u2014 this time signed by a larger group of state senators<\/a>.<\/p>\n During the September hearing, Humphreys said Act 77 will help create a fairer market for commercially-insured patients and independent pharmacies. He also acknowledged the difficulty of regulating PBMs, comparing the situation to putting pressure on a balloon.<\/p>\n \u201cYou push in one side, and it starts popping out the other,\u201d he told lawmakers. \u201cBut this legislation, I think, did try to kind of go around that balloon and push it all at the same time.\u201d<\/p>\n Aspects of the bill are expected to roll out in 2026. Many insurance plans covered by the law will begin including Act 77 protections, the first annual transparency reports are due in July, and Humphreys told lawmakers his agency hopes to have results from a study into benefit manager business practices in the new year.<\/p>\n Regarding complaints, Sandino said the department \u201cis in the process of developing a specific web form to help pharmacies and pharmacists navigate the process.\u201d<\/p>\n Even though the law only applies to certain types of insurance, the Shapiro administration has said transparency provisions \u201cwill help everyone better understand how PBMs work.\u201d In Sandino\u2019s response, he said the agency has asked benefit managers \u201cto voluntarily provide\u201d data for plans not directly covered by the law.<\/p>\n State Rep. Jessica Benham (D., Allegheny), the lawmaker who was the prime sponsor of the bill that became Act 77, described it as \u201ca good first step,\u201d said it has had a positive impact, and that it will take time to understand the full scope of that impact. She also expressed support for more legislative action at both the federal and state levels.<\/p>\n Additional Insurance Department funding in the recent state budget could resolve some implementation issues, she told Spotlight PA. She wants to see that impact before demanding specific implementation changes.<\/p>\n \u201cImplementation of a complicated bill like Act 77 was always going to take some time,\u201d she said. \u201cAnd it was going to run into some tangles that would need to be worked through.\u201d<\/p>\n BEFORE YOU GO\u2026 If you learned something from this article, pay it forward and contribute to Spotlight PA at spotlightpa.org\/donate<\/a>. Spotlight PA is funded by foundations and readers like you<\/a> who are committed to accountability journalism that gets results. <\/p>\n","protected":false},"excerpt":{"rendered":"Story by Ed Mahon of Spotlight PA Spotlight PA is an independent, nonpartisan, and nonprofit newsroom producing investigative…\n","protected":false},"author":2,"featured_media":169233,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[34],"tags":[103,397,396,61,60],"class_list":{"0":"post-169232","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-healthcare","8":"tag-health","9":"tag-health-care","10":"tag-healthcare","11":"tag-ie","12":"tag-ireland"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/169232","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=169232"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/169232\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/169233"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=169232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=169232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=169232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Pharmacy](\"https:\/\/www.newsbeep.com\/ie\/wp-content\/uploads\/2025\/12\/HKETGNTDPZA5BEICVVJKUJP6SU.jpeg\")
Kaye’l Marrero, a pharmacy technician and front-end supervisor at Minnich’s Pharmacy in York County, gathers medications.Ed Mahon \/ Spotlight PANew oversight powers<\/p>\n