Utah Pharmacy Association seeks solutions for dispensing fees with Express Scripts

The ongoing struggle between pharmacies and pharmacy benefit managers (PBMs) took center stage at the Retirement and Independent Entities Interim Committee meeting on June 19, 2025, as representatives from the Utah Pharmacy Association highlighted critical issues surrounding dispensing fees and reimbursement rates.

Adam Jones, Executive Director of the Utah Pharmacy Association, emphasized that dispensing fees have been a persistent problem for pharmacies, not just in Utah but nationwide. He pointed out that pharmacies are unique in the retail sector, as they lack control over the prices they charge for medications, which are dictated by contracts with PBMs like Express Scripts. This lack of control has led to significant financial strain, with many pharmacies losing money on prescriptions due to low reimbursement rates.

Jones revealed alarming statistics, noting that over 2,000 pharmacies closed in 2024 due to inadequate reimbursements, which limits patient access to local healthcare. He advocated for a hybrid model that would ensure pharmacies receive fair dispensing fees, particularly for Medicaid prescriptions, which are often filled at a loss. The current dispensing fee in Utah is just over $11, while reimbursements from PBMs frequently fall below this threshold.

Sheldon Birch, an independent pharmacy owner, shared his firsthand experiences, illustrating the financial challenges faced by pharmacies. He recounted a specific case involving the anti-epileptic drug carbamazepine, which cost his pharmacy $900, yet the PBM reimbursed only $700, creating a significant financial gap. Birch called for greater transparency in the PBM model, suggesting that states that have adopted transparent pricing have seen substantial savings.

The discussion also touched on the broader implications of PBM practices, with committee members expressing concern over the lack of negotiation power for independent pharmacies. The meeting underscored the urgent need for legislative action to address these issues, as pharmacies continue to be squeezed between PBMs and wholesalers, impacting their ability to serve communities effectively.

As the committee moves forward, the focus will remain on finding solutions that ensure fair compensation for pharmacies, ultimately preserving access to essential healthcare services for Utah residents.