In a concerted effort to reduce prescription drug costs, Governor JB Pritzker has introduced the Prescription Drug Affordability Act (PDAA) as a key legislative priority for 2025. Following his State of the State budget address, the Governor engaged with legislators and independent pharmacists in Springfield to discuss the adverse effects of pharmacy benefit managers (PBMs) on small pharmacies. He also visited Chicago Pride Pharmacy to underscore the challenges these pharmacies face and the necessity for reform.
Governor Pritzker emphasized that predatory practices by PBMs disproportionately impact small, independent pharmacies, which often serve as the sole medication providers in their communities. These unfair pricing strategies can lead to pharmacy closures, creating medical access deserts and escalating patient costs.
Chicago Pride Pharmacy, a Critical Access Pharmacy, specializes in supporting HIV-positive patients by offering housing, food access, and medication management services. Beyond serving the Lombard community, it also supplies medications to a children’s behavioral health facility in Chicago.
Mehul Khakhkhar, CEO of Upgrade/Chicago Pride Pharmacy, highlighted the ongoing struggles against PBMs that prioritize profits over patient care. He praised the PDAA as a vital measure to ensure fair reimbursement and maintain access to essential medications.
Michelle Dyer, an independent pharmacist featured in the Governor’s address, shared her experience of closing three pharmacies due to predatory PBM pricing. She stressed the importance of PBM reform to keep medications affordable and support small businesses.
PBMs act as intermediaries between insurance companies and pharmacies, often leading to conflicts of interest when large PBMs own pharmacies. This vertical integration can result in lower prices for large chains and higher costs for independent pharmacies. A practice known as “spread pricing” allows PBMs to charge health insurance plans significantly more for a drug than what they pay pharmacies, pocketing the difference.
The proposed legislation aims to curb such practices by limiting spread pricing, prohibiting PBMs from directing consumers to pharmacies they own, and restricting the arbitrary classification of certain medications as “specialty drugs.” It also seeks to protect consumer access and support small businesses by codifying enhanced rates for Medicaid-eligible critical access pharmacies, ensuring they can cover costs for the services they provide. Additionally, the legislation proposes redefining “Critical Access Pharmacy” to include 33 more pharmacies in rural and underserved areas, granting them access to additional state rebates to sustain their operations.
This initiative reflects Governor Pritzker’s commitment to fostering a more transparent and equitable healthcare system in Illinois.