Buchanan Brother's Pharmacy has served northern rural Pennsylvania for decades. But this week, three of their five stores are being sold to Rite Aid.

The cause for closure? PBMs.

Short for pharmacy benefit manager- these companies help negotiate the price of prescription drugs in the world of healthcare. They act as a middleman between drug manufacturers and pharmacies for insurance companies.

(Click here for an article explaining more of how PBMs operate)

When it comes specifically to pharmacies, PBMs negotiate contracts for how much a pharmacy will get reimbursed by an insurance agency for specific drugs. The negotiated price can be less than what the pharmacy paid for the drug.

Here is an example of how this can work, given by a pharmacist at Buchanan Brothers Pharmacy.

A pharmacy buys a prescription drug for $300. When a patient with insurance needs that drug, they might pay a $50 copay. And the insurance company supplements the copay with $200- their negotiated price through the PBM.

The pharmacy is still $50 short.

Over the decades, it has become the norm for insurance companies to underpay for medications through PBM negotiations. This has been detrimental toward community pharmacies like Buchanan Brothers.

Larger chains— like Walgreen and Rite-Aid— can rely on sales from other non drug sales (house hold items to food to photo stations). Community pharmacies rely more on their pharmaceutical sales to sustain their business, and if they are paying more for medicine than what they make in return, they cannot make a profit and sustain business.

In 2024 alone- just 3 full months- over 70 community pharmacies have closed in the state of Pennsylvania.

The Commonwealth’s lawmakers want to reverse the trend.

House Bill 1993 and Senate Bill 1000 puts checks and balances into the PBM negotiating business. Pennsylvania’s insurance department would be able to investigate claims of pharmacies being underpaid. It would give pharmacy companies more rights in the negotiating process, require transparency in the process, and have language to enforce the changes.

The Pennsylvania Pharmacy Association visited the state capitol en masse today, with dozens of pharmacy students roaming the halls to speak with legislators on the bills.

The association emphasized the importance of community pharmacies- especially in rural areas.

"In so many areas, there are so few pharmacies for such a wide geographic area, especially in the northern part of the state where there could be one pharmacy in the entire county,” said Rick Seipp, the vice president of Value Drug Company, and the legislative chair for the Pennsylvania Pharmacy Association.

"So we want to make sure that those pharmacies continue to stay there because that could be the only health care professional that somebody is even able to interact with on a regular basis,” said Seipp.

Community pharmacists can have more consistent staff, allowing relationships to form between customers and workers.

Natalie Klek, a student from Lake Erie College of Osteopathic Medicine shared how a community pharmacy she worked at serves over 80 a people a day.

“We have some patients that like to call us every day, which is really sweet.” said Klek.