Lawmakers consider bill to let pharmacies refuse fills when PBM reimbursement is below acquisition cost

The committee heard long, sometimes heated testimony on Senate Bill 247, which would prohibit network exclusion for pharmacies that refuse to dispense a prescription when the PBM reimbursement is below the pharmacy’s acquisition cost.

Representative Brian Cole introduced the measure, saying the bill addresses practices by pharmacy benefit managers that leave some independent pharmacists forced to dispense medications at a loss. "Pharmacists don't have to sell a prescription below their cost," Cole told the committee, offering the bill as a compromise to protect local pharmacies.

Independent pharmacists and owners described examples where PBM-set reimbursement could be below the wholesale or acquisition cost for a drug. “We’re talking prescriptions that cost anywhere from $1,000 to $1,500 that we're being underpaid anywhere from $50 to $200 on,” said Glenn Peralta, owner of Colonial Pharmacy, who urged reinstating language the Senate removed that would have allowed pharmacists to charge the patient the difference between acquisition cost and PBM reimbursement.

The legislation as amended on the Senate floor removed language that would have expressly allowed pharmacists to collect the delta from patients. Multiple independent pharmacists testified they want that provision restored to preserve at-the-counter access and avoid forcing many patients to use mail-order or travel to distant pharmacies.

Opponents, including the Health Care Distribution Alliance (HDA) and industry witnesses, urged narrower drafting or removal of certain provisions on pharmacy services administrative organizations (PSAOs); they said the bill conflates different PSAO roles and could cause PSAOs to exit the state, reducing choices for independent pharmacies. AHIP indicated it could support the bill if the notice period was aligned with federal requirements; AHIP’s representative said a 90‑day state notice would resolve concerns in Sen. Raybards’s amendment discussions.

Committee members pressed on practical effects for patients. Representative Sullivan asked whether a patient could pay the difference at point of sale to keep buying locally; witnesses said the bill as currently drafted (without the Senate’s deleted language) does not create a mechanism for a customer to pay a premium at the register — instead, the pharmacy could decline to fill and direct the patient to the insurer or PBM for alternatives.

Pharmacy supporters argued independent pharmacies cannot match the mail-order volume discounts PBMs secure and that current PBM contracting practices give few alternatives for independents; pharmacy supporters said the bill balances consumer access and pharmacy viability. Industry witnesses and some legislators said the removed “delta” language would defeat the purpose of contracted network pricing and could drive up costs by eroding negotiated rates.

Key technical issues raised in testimony included: whether the bill should restore language allowing a pharmacist to collect the acquisition-cost delta from patients; whether Medicare and Medicaid lines should be excluded from the measure; how PSAOs should be defined and regulated; and whether the Senate’s removal of the delta provision was intentional and why it was dropped.

What happened at the hearing: Stakeholders on both sides said they wanted more negotiation. Pharmacy owners asked the committee to reinstate the deleted language so they can continue to serve patients without heavy financial loss. The department and industry witnesses urged careful drafting to avoid unintended consequences. The committee did not vote at the hearing; members signaled follow-up work sessions would be needed to reconcile competing concerns.

Why it matters: The bill touches pharmacies’ financial survival, patient convenience and access, and PBM contracting practices that affect drug distribution and retail pharmacy networks. Independent pharmacies told the committee the stakes are high for small-town access to routine medications.

What’s next: Committee work sessions and potential subcommittee amendment are likely to address whether pharmacies can collect a “delta” from patients, how PSAOs are treated in statute, and carve-outs for federal programs. Testimony indicated the Senate already removed the delta language and some witnesses want it restored.