Independent Pharmacists Warn Appropriations Panel PBM Reimbursement Models Threaten Community Pharmacies

Jonathan Marquis, an independent pharmacist, and Kevin Woody, an independent pharmacy owner, told the committee that independent pharmacies are a safety net across Georgia and are at risk because many commercial reimbursements fall below dispensing costs. Marquis said pharmacies operate in 153 of 159 counties and that 42 counties rely solely on independents; "No business could operate like that," he said of reimbursements below cost.

Woody described examples of payments that left stores operating at a loss: a 90-day supply processed on a marketplace plan for which the pharmacy was reimbursed "25¢" while the bottle and labeling costs exceeded that amount. He said some pharmacy claims in the commercial market reimburse at or near zero and that the combination of low reimbursement and regulatory costs makes continued operation unsustainable in many communities.

Both witnesses criticized pharmacy benefit managers (PBMs) and the design of commercial reimbursement models. Woody argued the current arrangement lets entities that both pay and receive fees set terms that disadvantage retail pharmacists: "We need to quit letting the fox watch the hen house." Witnesses urged the committee to consider a fair dispensing fee for generic drugs, parity between commercial plans and state-reimbursement models, and targeted policy steps to prevent further closures in rural counties.

Committee members asked for detail about whether stock and contractual obligations force pharmacies to turn away brand drugs; witnesses said contracts sometimes force pharmacies to fill brand claims at generic reimbursement rates, which can make it financially impossible to stock certain products. No formal action was taken at the hearing; witnesses were thanked and dismissed.