Imagine a state where hundreds of pharmacies are closing their doors, leaving communities without essential healthcare access. This is the reality in Pennsylvania, despite a law promising support. But here's where it gets controversial...
The Promise of Act 77
In 2024, a bipartisan law known as Act 77 was passed with the aim of supporting pharmacies and holding corporate middlemen, called Pharmacy Benefit Managers (PBMs), accountable. PBMs manage drug plans for employers and insurance companies, but critics argue they drive up drug costs and offer insufficient reimbursements to community pharmacies.
State Senator Lindsey Williams, one of the key proponents of Act 77, wants to ensure that PBMs are truly being held responsible. She believes the legislation is a step towards achieving this goal, but acknowledges the need to push for its effective implementation.
When Governor Josh Shapiro signed Act 77, he blamed PBMs for independent pharmacy closures, stating they "manipulate and profit off the pharmaceutical system." The law limits practices that critics say PBMs use to make unfair profits and forces them to disclose key information about rebates and fees.
The Reality Check
Despite these promises, hundreds of pharmacies have closed over the past year. Lawmakers and pharmacists are now questioning the law's effectiveness and whether it will live up to the hopes it generated. The Pennsylvania Pharmacists Association warned that closures would continue without further state action.
State Senator Judy Ward expressed disappointment, stating, "Some of the things we thought would be cleared up with Act 77 are not." The law's protections only apply to about 24% of the state's market, according to the Shapiro administration, which has raised concerns among pharmacy advocates.
Pennsylvania Insurance Commissioner Michael Humphreys defended the law, stating it brings "needed transparency and fairness" to the healthcare system. However, in a letter to Humphreys, six state senators, including Ward, expressed concerns about the law's implementation and enforcement, stating, "Effective policy requires effective implementation, and we are concerned that is not occurring."
The Impact of Closures
Pharmacies and patients continue to struggle with the consequences of closures. Patients may have to travel farther, wait longer, or even go without essential medications. According to state records, about 1,100 licensed Pennsylvania pharmacies went out of business from early 2020 to early November 2025, resulting in a net loss of hundreds of pharmacies.
Deron Shultz, CEO of Minnich's Pharmacy, shared stories of customers struggling to fill prescriptions elsewhere. "They haven't had their blood pressure medicine in days," Shultz said. "Our community health workers are tracking down doctors to get those prescriptions."
The PBM Perspective
A spokesperson for the Pharmaceutical Care Management Association, which represents PBMs, argues that it's not fair to blame them for pharmacy closures. They claim these companies work to reduce drug costs and save money for patients and the healthcare system.
"Independent pharmacies often point the finger at PBMs instead of acknowledging other factors, like high drug prices and customer preferences for online choices," said Greg Lopes, a spokesperson for the association.
New Oversight Powers
Act 77 was designed to address various issues by putting new requirements on prescriptions filled through certain insurance plans. It aimed to level the playing field between pharmacies and PBMs. The law addresses patient steering, clawbacks, and spread pricing, which advocates say hurt consumers and pharmacies.
The final version of Act 77 empowers the Insurance Department to review the impact of these practices on prescription drug costs and pharmacy access. It also puts new transparency requirements on PBMs, including annual reports detailing administrative fees, rebates, and reimbursement differences.
Enforcement Concerns
Despite these new powers and restrictions, some lawmakers are concerned about the law's rollout. In a letter to the Insurance Department, six state senators shared detailed questions about the agency's actions, asking about guidance for specialty drugs, appeals, and the department's interactions with PBMs.
At the same time, they also sent questions to the Pennsylvania Department of Human Services about prescriptions filled through the state's Medicaid program, which is not covered by Act 77. Lawmakers expressed concerns about "alarmingly low" reimbursements through Medicaid.
In response, Human Services Secretary Valerie Arkoosh described changes and enforcement actions, as well as a reduction in pharmacy complaints. Lawmakers followed up with a legislative hearing and another letter to the Shapiro administration, signed by a larger group of state senators.
During the hearing, Humphreys acknowledged the difficulty of regulating PBMs, comparing it to squeezing a balloon. He expressed hope that Act 77 will create a fairer market for patients and independent pharmacies.
Aspects of the bill are expected to roll out in 2026, with insurance plans covered by the law beginning to include Act 77 protections. Humphreys stated that his agency hopes to have results from a study into benefit manager business practices in the new year.
State Rep. Jessica Benham, the prime sponsor of the bill that became Act 77, described it as "a good first step" and expressed support for further legislative action. She believes additional Insurance Department funding could help resolve implementation issues.
And this is the part most people miss... Despite its limitations, the Shapiro administration believes the transparency provisions of Act 77 "will help everyone better understand how PBMs work."
What do you think? Is Act 77 enough to address the challenges faced by Pennsylvania's pharmacies? Should there be more stringent regulations on PBMs? Let us know your thoughts in the comments!
