Pennsylvania's Act 77 Targets PBM Practices Amid Pharmacy Closures

Pennsylvania's Act 77, enacted in 2024, was designed to regulate pharmacy benefit managers (PBMs) to address issues contributing to the closure of community pharmacies across the state. While it introduces measures to limit PBM practices such as patient steering, clawbacks, and enhance transparency, the law currently covers only about 24% of the state's insurance market, primarily affecting fully-funded commercial plans. Despite the legislation, over 1,100 pharmacies have closed in Pennsylvania since early 2020, with a significant number after the law's enactment, including many Rite Aid locations. Lawmakers have raised concerns about the enforcement and effectiveness of Act 77, questioning the state Insurance Department's regulatory actions and the law's implementation timeline. Pennsylvania Insurance Commissioner Michael Humphreys acknowledges the complexity of regulating PBMs and expresses commitment to utilizing all Act 77 provisions. The law mandates annual transparency reports from PBMs detailing administrative fees, rebates, and reimbursement disparities. However, enforcement is challenged by federal preemption and jurisdictional limitations, as well as staggered rollout schedules. Pharmacy advocates report ongoing issues such as unsustainable reimbursements and predatory practices impacting especially rural and underserved communities. The Pennsylvania Department of Human Services oversees Medicaid prescriptions, not covered under Act 77, where reimbursement concerns persist but have seen some reduction in complaints. Legislative oversight continues with hearings and communications urging comprehensive implementation. Act 77 is perceived as a foundational measure, with stakeholders calling for further state and federal legislative action. Additional state funding aims to support the law's execution, and enhanced reporting tools are in development to assist pharmacies in navigating complaint processes. Overall, Act 77 reflects ongoing efforts to balance regulatory authority, market dynamics, and transparency in managing PBM practices affecting pharmacy sustainability and patient access in Pennsylvania.