Legislation sponsored by Reps. Doyle Heffley, R-Carbon, and Rob Matzie, D-Beaver/Allegheny, to bring more transparency to the pricing practices of pharmacy benefit managers has been signed into law by the governor.

“We have been working on this legislation for more than three years and during that time have continued to hear from our local pharmacies about severe cuts to pharmacy reimbursement rates by PBMs, especially in Medicaid,” said Heffley.

“For many medications, payments are well below cost, forcing pharmacies to operate in the red. These cuts in reimbursements make it extremely difficult for the 900 independent pharmacies in Pennsylvania to maintain inventory, stay in business and serve our most vulnerable citizens.”

Act 120 of 2020 gives the Department of Human Services the authority to request payment information from PBMs and require certain disclosures upon request. It also calls on the Legislative Budget and Finance Committee to conduct a study analyzing prescription drug pricing in the Medical Assistance program.

Heffley noted that almost 90% of Pennsylvania’s Medicaid patients are served by managed-care companies that contract with the state. In turn, those companies contract with PBMs for their pharmacy programs to decide which drugs will be covered and how much to reimburse the pharmacies that fill the prescriptions.

“These community pharmacies, which have been on the front lines during the pandemic have been treated unfairly by PBMs. Our new law will go a long way toward providing much need transparency into the process. This is a huge win for community pharmacies statewide,” Heffley said.

Act 120 takes effect in 60 days.