(From left): Thompson’s Pharmacy patron Kathy Kilgore of Hollidaysburg, Sen. Judy Ward, Thompson’s Pharmacy owner Bill Thompson and Pennsylvania Insurance Commissioner Michael Humphreys watch as Gov. Josh Shapiro speaks on Friday in Hollidaysburg. Mirror photo by Patrick Waksmunski

HOLLIDAYSBURG — A new state law will enable the Pennsylvania Insurance Department to hold pharmacy benefit managers — known as PBMs — accountable, which will cut prescription costs for consumers and support local pharmacies, according to Gov. Josh Shapiro.

PBMs, which are third-party intermediaries between drug manufactures and insurance providers, reimburse pharmacies for the prescriptions customers buy with insurance. However, over 140 independent pharmacies have closed their doors since Jan. 1, according to state Rep. Jessica Benham, D-Allegheny County, who said many of the closures were due to PBMs “rigging the system in favor of their affiliated big-chain pharmacies.”

Shapiro, Benham and state and local leaders gathered at Thompson Pharmacy on Friday afternoon to tout the new law as Shapiro conducted a ceremonial signing of Act 77 of 2024.

Benham sponsored House Bill 1993 after traveling throughout the commonwealth the past nine months and hearing of pharmacy owners’ common struggle to stay in business. According to Benham, three PBMs control 80% of the market in Pennsylvania.

Bill Thompson, the owner of Thompson Pharmacy, said he had to close one location in downtown Altoona and sold another location in Centre Hall earlier this year because of downsizing, which he attributed to the “unfair” reimbursements received from PBMs for the prescriptions the pharmacy filled.

Thompson took his concerns to one of his notable customers — state Sen. Judy Ward, R-Blair, who was the prime sponsor of Senate Bill 1000, the senate’s version of HB 1993.

“I could not wrap my brain around it,” Ward said of when Thompson told her pharmacies weren’t reimbursed for the full amount they paid for a drug.

Shapiro said the law reforms the “predatory practices” of PBMs, including “patient steering,” in which a pharmacy benefit manager directs a patient to use a preferred pharmacy by approving only certain pharmacies. Oftentimes, they would steer customers to favor chain pharmacies that own the PBMs, Shapiro said.

Act 77 prohibits a PBM from paying independent pharmacies less than the amount it reimburses its own affiliated pharmacies, said Pennsylvania Insurance Commissioner Michael Humphreys, who said the law also prohibits PBMs from inflating the cost of prescription medications and imposes new reporting requirements.

Beginning in 2026, PBMs must submit an annual transparency report detailing the amount of all rebates received from drug manufacturers and the amount passed through to health insurers.

“The effective date on the reporting piece was 2026 because you need an opportunity for the provisions to take effect,” Humphreys said.

Thompson said there’s still a lot of work that needs to be done to ensure the long-term viability of independent pharmacies in Pennsylvania, but Act 77 is the start to “having a level playing field so we’re not losing so much money,” he said.

“Our pharmacies will suffer less harm by this bill being passed,” Thompson said.

Ward said she is proud of the reforms the general assembly was able to pass.

“Our community pharmacies are the lifeblood of our communities. They serve people in a special way,” she said, adding local pharmacies know their customers’ names. People also seek counsel from their pharmacist about their medical issues, which is why having a local pharmacy is vital to rural communities, she said.

Thompson said his staff members are like a family who take pride in serving the community. “They mean so much to me because I can’t be here today without them doing a great job supporting the community,” he said.

Shapiro said he uses a community pharmacy in Montgomery County and understands the services they provide for local residents. He said 21 of the commonwealth’s 67 counties have fewer than 10 pharmacies remaining, which results in longer road trips for people to get the medication they need, and in some instances, they might not get it on time, he said.

“The industry hates these reforms, which means we did something right,” Shapiro said, adding he believes bipartisan support should be celebrated. “The people deserve to be heard and they were.”

Election discussed

When pressed about the 2024 presidential election, in which Shapiro is a leading candidate to become Kamala Harris’ vice president, Shapiro said he received a phone call from President Joe Biden on Sunday, moments after Biden announced he was dropping out of the race.

After that call, Shapiro received another phone call, this one from Harris. Shapiro said he quickly offered her his endorsement.

“We spoke only about that and we have not spoken since,” Shapiro said.

Shapiro said he has a “very clear view” on the election and will rally in support of Harris this weekend. “It’s no secret where I stand on this,” he said.

Mirror Staff Writer Matt Churella is at 814-946-7520.