Pennsylvania Official Questions Single PBM Plan to Save Closing Pharmacies
State health official questions plan to hire single pharmacy benefit manager for Medicaid despite Ohio’s $140 million savings success story.
HARRISBURG, PENNSYLVANIA — A Pennsylvania Department of Human Services official expressed skepticism about a legislative proposal to hire a single pharmacy benefit manager for Medicaid plans. Supporters claim this approach could help prevent the closure of more than 1,000 pharmacies statewide since 2020.
Sally Kozak, deputy secretary of the Department of Human Services’ Office of Medical Assistance Programs, informed lawmakers during a House Health Committee hearing that consolidating pharmacy benefits under one manager would not achieve the anticipated savings. “Moving to a single [pharmacy benefit administrator] would only add cost, time and risk without seeing the savings that some other states have seen,” Kozak said.
Lawmakers Target Pharmacy Benefit Managers
The proposal, sponsored by Rep. Rob Matzie (D-Beaver), seeks to address the ongoing closure of Pennsylvania pharmacies by regulating pharmacy benefit managers, or PBMs. These intermediaries in the pharmaceutical supply chain have been blamed by pharmacists for squeezing independent drugstores out of business.
Matzie’s bill would direct the state Department of Human Services to hire a single PBM to manage prescription drug benefits for all Medicaid plans offered by Pennsylvania. Currently, each insurance company offering Medicaid plans contracts with its own PBM to oversee prescription benefits.
Ohio Model Shows Promise
Supporters highlight Ohio‘s success after implementing a single PBM model for Medicaid plans in 2022. The neighboring state reportedly saved $140 million over a two-year period while increasing payments to pharmacists.
Under the consolidated approach, Pennsylvania would gain more control over prescription drug management and could potentially allow pharmacists to receive higher reimbursements for medications they dispense. The increased control comes from the state’s enhanced negotiating power when dealing with a single contractor rather than multiple PBMs across various insurance plans.
State Official Cites Limited Reach
Kozak argued that Pennsylvania’s situation differs from other states that have seen success with single PBM models. She noted that a Medicaid-focused pharmacy benefit administrator would only affect a small portion of prescriptions filled across the state.
The ongoing debate reflects broader concerns about pharmacy closures throughout Pennsylvania. Rural and urban communities alike have lost access to neighborhood pharmacies, forcing residents to travel longer distances for prescription medications and pharmaceutical services.
State lawmakers have pursued various legislative approaches over recent years to address PBM practices, viewing these companies as contributing factors to the financial pressures forcing independent pharmacies to close. The pharmaceutical supply chain has become increasingly complex, with PBMs serving as intermediaries between insurance companies, pharmacies, and drug manufacturers.
