Gov. Shapiro signs law meant to help protect independently owned pharmacies

NEW CASTLE, Pa. — A new law providing relief for pharmacy owners and customers was signed into law in New Castle on Wednesday.

The legislation provides stronger protections for patients and increased oversight of Pharmacy Benefit Managers (PBMs), who are considered the hidden middlemen of the supply chain.

Dozens of local pharmacies have been forced to shut their doors, and some say PBMs — third-party providers that go between pharmaceutical companies and insurance providers — are why.

The law signed by Gov. Josh Shapiro would help protect local pharmacies.

“I was dealing with a small family-owned stand-alone pharmacy and they went out of business,” Jack Melvin told Channel 11.

Since the start of 2024, more than 140 local drug stores have closed, including the one Melvin went to.

Melvin was able to have his prescription filled at the Hometown Pharmacy in downtown New Castle, which is now one of many independently owned pharmacies protected by this new law.

“For too long we have had these PBMs, these middlemen between the drug manufacturer and the pharmacies, manipulating and profiting off the pharmacy system,” Shapiro said.

PBMs are supposed to negotiate prices with drug companies for prescriptions through Medicaid, but the savings haven’t been passed. Instead, the Medicaid dollars go back to the PBMs. This legislation ends that practice.

“There will be accountability both because the insurance commissioner now has the tool to bring about the accountability and because lawmakers leaders like them have the ability to go back and make additional changes,” Shapiro said.

Shapiro claims that because of this law, consumers will begin to feel relief at the drug store almost immediately.

“I think we are going to feel the effects of that very very soon,” he said.

Shapiro says this is just the first step to holding PBMs accountable.

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