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The script computer at Wilson’s Pharmacy in Lawrenceville flashes red or green each time owner Jeff Wilson processes a prescription. If it’s green, he fills it. If it’s red, he looks closer; filling the wrong prescription could mean losing more than $100 on a single transaction.
Wilson said even green-screen prescriptions can lose money if the reimbursement negotiated by a pharmacy benefit manager, or PBM, does not cover what he paid the wholesaler plus his overhead. He added that reimbursements on some fills can be as low as 20 cents.
“The bottle and label cost 35 cents, new prescriptions cost us 19 cents, so we're at 54 cents before we put any pills in the bottle, and they want to pay us 20 some cents,” Wilson said. “That kind of stuff is just ridiculous.”
Now, as hundreds of Pennsylvania pharmacies have closed and independent pharmacists increasingly blame PBM reimbursement practices for making prescriptions unprofitable, Congress is considering new restrictions on the companies that manage prescription drug benefits.
In July, a House committee advanced the bipartisan Pharmacists Fight Back Act, which would establish reimbursement standards, require drugmaker rebates to be reflected in patients’ costs and prohibit PBMs from steering patients toward affiliated pharmacies — although the changes would apply only to the Federal Employees Health Benefits Program.
The legislation has intensified a longstanding debate over whether PBMs are helping control prescription drug costs or contributing to the financial pressures forcing community pharmacies to close — and what those closures mean for patients who rely on pharmacists for more than simply filling prescriptions.
Several factors influence a customer’s co-pay and affect how much a pharmacy, like Wilson’s, might make or lose on a prescription under a health plan.
Pharmacy benefit managers administer prescription drug benefits on behalf of insurers, plan sponsors, and other payers. They negotiate rebates with drug manufacturers, help determine which drugs are covered under a plan, and negotiate reimbursement terms with pharmacies. Those arrangements shape how much money is made between each player when a prescription is filled.
Additionally, a small or independent pharmacy sometimes pays a flat fee to a pharmacy services administrative organization (PSAO), which communicates with PBMs and handles back-end administrative work.
Wilson purchases drugs from a wholesaler and relies on dispensing fees and reimbursements to cover these costs.
The strain on Wilson’s Pharmacy reflects a larger problem in Pennsylvania, where mom-and-pop pharmacies have closed, and larger chains have struggled, including Rite Aid, which filed for bankruptcy in May 2025.
While there are numerous reasons for the closures, the dynamic is heavily affected by the pricing practices of pharmacy benefit managers, said John DeJames, former president of the Pennsylvania Pharmacists Association.
Pharmacies can try to offset the losses on certain prescriptions through front-end store sales; DeJames said, even a large retail footprint may not be enough. In a 20,000-square-foot pharmacy, for example, as much as 18,000 square feet might be dedicated to the storefront.
“That 18,000 square feet is not enough revenue profitability to save the pharmacy,” he said. “Case in point, Rite Aid. No matter what they tried to do on the front end, they didn't make enough up to cover the losses in the pharmacy. So someone's prescription plan got them in the door, but that patient didn't buy enough on the out front to generate profit to offset those losses.”
Christine Rex, senior director of state public affairs at Pharmaceutical Care Management Association or PCMA, said the economics of a pharmacy are far more complicated than a single reimbursement amount. She pointed to a report from Compass Lexecon that attributes pharmacy struggles to other economic factors.
“Whether a pharmacy makes or loses money on a prescription depends on what it paid to acquire the drug, wholesaler and PSAO arrangements, prescription volume, labor costs, payer mix, and other operating expenses,” she said. “Reducing all of that to ‘the PBM didn't pay enough’ misses how pharmacies actually operate.”
Rex said the PCMA is concerned about a provision of the Pharmacists Fight Back Act that requires rebates to be applied at checkout. While this would lower a customer’s coinsurance or copayment, she said it would redirect savings that employers and health plans currently use to lower premiums and reduce costs.
“These policies increase the cost of providing prescription drug coverage without addressing the underlying driver of high drug costs, manufacturer pricing,” she said. “In the case of [Federal Employees Health Benefits Program], that means taxpayers ultimately bear those additional costs.”
U.S. Rep. Robert Bresnahan (R-Pa.) co-sponsored the bill. Instead of lowering costs, he said PBMs are operating within a “broken system,” making it difficult for community pharmacists to stay in business and putting profits ahead of patients.
Two years ago, pharmacist Brandon Antinopoulos stopped working with pharmacy benefit managers when he opened Forward RX Pharmacy in New Brighton. Antinopoulos, president-elect of the Pennsylvania Pharmacists Association, previously worked for pharmacy chains and later at a PSAO as a pharmacy business coach.
Instead of accepting health insurance, Forward RX calculates what customers pay for prescriptions based on the pharmacy’s own cost. According to Antinopoulos, customers can sometimes pay less out of pocket there than they would using insurance at another pharmacy.
“We decided to not wait for regulatory action to solve the problem, and figured there was an opportunity for us to start solving it ourselves,” he said. “I believe since 2020, there have been ‘200 state PBM reform bills’ that have passed, and we're still in the same state that we are as far as losing pharmacy access.”
For meaningful reform, Antinopoulos said all players in the industry need greater transparency around pricing and should re-evaluate who brings value to the supply chain.
“I believe that pharmacists or pharmacies, the ones actually providing the medication to the patients and making sure they're taking it appropriately and safely, you know, should be appropriately compensated to do so,” Antinopoulos said.