Independent Pharmacies Say Low Reimbursements, Retroactive Fees Are Driving Local Closures

COLUMBIA, S.C. — Owners of independent pharmacies and their trade groups told state lawmakers that contracting and reimbursement terms set by PBMs are forcing community pharmacies to close and threatening local access to medicines.

Why it matters: Independent pharmacies are frequently the most accessible health‑care points in smaller towns and rural neighborhoods. Witnesses said repeated below‑cost reimbursement and retroactive adjustments make it impossible for many small operators to remain financially viable.

What witnesses told lawmakers: Joel (NCPA representative) and Addison Livingston (Independent Pharmacies of South Carolina) described contracts that limit pharmacy bargaining power and sometimes require buying most inventory from a single wholesaler. Livingston said two of his eight community pharmacies are no longer financially feasible and must close unless the policy environment changes. Contracting provisions and post‑payment adjustments — described in testimony as ‘‘clawbacks’’ or retroactive fees — were cited as a common reason for losses at point‑of‑sale.

Several pharmacy witnesses and trade group executives urged the committee to consider state reforms that have been adopted elsewhere: basing reimbursements on NADAC (the CMS National Average Drug Acquisition Cost) plus a professional dispensing fee or multiplier, banning spread pricing in Medicaid, restricting PBM ownership of pharmacies and strengthening state oversight and enforcement of PBM conduct.

Evidence and local impacts: Brian Clark of the South Carolina Pharmacy Association told the committee that state regulators recorded dozens of pharmacy permit nonrenewals in 2023–2024; pharmacies across South Carolina have closed or pared back hours, he said. Witnesses credited several states (Kentucky, West Virginia and Tennessee) with reporting measurable fiscal effects after adopting pharmacy reimbursement and PBM‑transparency measures.

Panel next steps: Pharmacy representatives provided the committee with requests for enforcement tools and legislative options; the committee asked for more specific documentation and local financial data to assess how state policy could change reimbursement or oversight without unintended consequences for plan sponsors and patients.

Ending: Committee members asked pharmacy groups to submit concrete, state‑specific cost and contract examples to inform drafting of bills.