Independent Pharmacies Fight Back as PBM Reform Gains Steam

A bill to reign in pharmacy benefit managers (PBMs)  faced early resistance in the General Assembly but is now picking up steam. After a House Finance subcommittee skipped a vote earlier this week, Del. Mark Sickles, D-Fairfax, called the bill “controversial.”

Blacksburg-area pharmacist Jeremy Counts, pictured on the projector screen, called in to the Sept. 16 meeting of the state’s rural health care committee to talk about challenges independent pharmacies face. He highlighted that these pharmacists will serve the areas of the state that national chains sometimes won’t. (Photo by Charlotte Rene Woods/Virginia Mercury)

By Friday, however, it had cleared the full Finance committee and is now headed to the full House of Delegates for consideration.

Sponsored by Del. Katrina Callsen, D-Charlottesville, House Bill 2610 is part of a bipartisan effort to increase state oversight of PBMs — middlemen who negotiate drug prices between health plans, manufacturers and pharmacies. Critics argue that PBMs operate with little transparency, making it unclear how much of their negotiated savings actually reach consumers.

Callsen’s proposal would eliminate health-plan-run PBMs in Medicaid and establish a single state-contracted PBM, a move supporters say would improve accountability, lower costs, and help independent pharmacies to stay afloat.

A companion bill by Sens. Aaron Rouse, D-Virginia Beach, and Travis Hackworth, R-Tazewell, is advancing in the Senate. Branded the “Save Local Pharmacies Act,” the legislation is seen as a lifeline for small, independently-owned pharmacies.

Hackworth, a former local pharmacy owner, knows the struggle firsthand.

“I know what it’s like to spend $10 to make $5 back from Medicaid,” he said.

Independent pharmacists across Virginia are rallying behind legislation to reform PBMs, arguing the change is critical for rural healthcare access.

Blacksburg-based Jeremy Counts and Cumberland-based Kim Wright have been vocal in their support, attending rural healthcare committee meetings last summer to highlight the role independent pharmacies play in communities where national chains are absent.

“We’re the first line,” Counts told The Mercury, emphasizing how local pharmacies serve as key access points for prescriptions, vaccines, and physician consultations. But with both national and local pharmacy closures on the rise, he warned of worsening “pharmacy deserts” and patient access issues.

Gov. Glenn Youngkin’s administration initially raised concerns that the proposed single PBM system would exclude current providers. In response, lawmakers amended the bills to allow existing PBMs to apply. Meanwhile, the Virginia Association of Health Plans cited a study estimating the transition could cost $17 million in administrative expenses.

Supporters counter that those costs pale in comparison to potential savings. Rouse noted that Virginia could save about $39 million annually, pointing to  Kentucky and West Virginia, which saved $56.6 million and $54.4 million, respectively, after passing similar laws.

Callsen defended the proposal, stating, “It’s just a question of when those savings are realized when we put it into place.”

With the legislative session hitting its midpoint, bills still must clear both chambers before heading to Youngkin’s desk for a final decision.

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