Independent pharmacies across the country are facing financial strain, with many closing their doors due to unsustainable reimbursement rates and restrictive practices imposed by the major pharmacy benefit managers (PBMs). In response, states are taking legislative steps to curb PBM influence and protect community pharmacies.
According to the National Community Pharmacists Association, over 3,250 net retail pharmacies closed in 2024 alone, with independent pharmacies disproportionately affected. Dennis Czerw, owner of Parkway Pharmacy in Philadelphia, recently shared his experience: “Every prescription that comes in the door you have to evaluate for profitability. Too many of the wrong ones can drive you out of business.”
Alabama is the latest state to pass legislation to aid struggling pharmacies. The Community Pharmacy Relief Act took effect on October 1, mandating that PBMs reimburse independent pharmacies at no less than the Alabama Medicaid rate. The law is designed to ensure fair compensation for dispensing drugs and to prevent further closures.
Ohio has also joined the reform wave, with state legislators passing three companion bills that aim to increase transparency and fairness in PBM operations. These bills require PBMs to obtain licenses, prohibit them from reimbursing independent pharmacies at lower rates than their affiliated counterparts, and mandate detailed rebate documentation.