Texas Pharmacists Urge Legislators to Help Save Neighborhood Pharmacies and the Patients They Serve

Lawmakers Urged to End the Anti-Competitive, Anti-Consumer Practices of Pharmacy Benefit Managers

AUSTIN—More than 400 pharmacy professionals today urged Texas legislators to enact new laws to protect patients, pharmacies and employers from the anti-competitive, anti-consumer practices of middlemen in the pharmaceutical supply chain who are driving up prescription drug costs and forcing scores of neighborhood pharmacies out of business. At least one Texas pharmacy has closed every week for the past two years.

Rallying at the state Capitol, the pharmacy professionals also called for these middlemen – known as pharmacy benefit managers (PBMs) – to adhere to existing Texas laws requiring transparent contracts with independent pharmacies and fair compensation for their pharmacy services.

PBMs, which manage the lists of prescription drugs covered by public and private health insurers, have been widely criticized for using a flawed system to profit unfairly at the expense of consumers, employee health plans and neighborhood pharmacies – all while driving business to pharmacies the PBMs own or control. The result has been increased prescription drug costs for patients and the forced closure of neighborhood pharmacies, which means the loss of a critical health resource, especially in rural and underserved communities.

“As pharmacists, our priority is patient care, but PBMs’ anti-competitive tactics threaten our ability to deliver quality healthcare to our communities,” said Jobby John, President of the Texas Pharmacy Association (TPA) and a Lakeway pharmacist. “We’re not just small businesses; we’re critical health access points, often the first and sometimes the only healthcare touchpoint for many Texans. It’s imperative that legislators hold PBMs accountable, enforce transparency and protect the neighborhood pharmacies that Texans trust.”

TPA CEO RoxAnn Dominguez said PBMs drive up prices for patients at the pharmacy counter, increase costs for employers and undermine the financial health of local pharmacies. “PBMs decide which medicines patients can get and at what price,” Dominguez said. “They dictate lower reimbursement rates for neighborhood pharmacies but then often pay their own pharmacies more. And they decide what employers must pay for a key piece of their employees’ health premiums.”

The nation’s largest PBMs control the cost of the overwhelming majority of America’s filled prescriptions, as well as significant chunks of the pharmaceutical supply chain, including the country’s largest retail pharmacy chains. “The three largest PBMs control 80 percent of the market for prescription drugs,” said Ashley Garling, a pharmacist and TPA board member. “They use this market power to self-deal and direct patients to pharmacies they themselves own, and they throw up obstacles to competition for independent and chain pharmacies alike.”

A series of recent government and private sector reports illustrates how the abuses PBMs heap on the drug distribution system have left Americans scrambling to pay for their prescription medications and forced many pharmacies to shutter their stores.

A January 2025 Federal Trade Commission (FTC) report found that the three largest PBMs “marked up numerous specialty generic drugs dispensed at their affiliated pharmacies by thousands of percent, and many others by hundreds of percent.” These included “critical drugs used to treat serious diseases and conditions, including cancer, HIV, multiple sclerosis, and pulmonary hypertension,” according to the FTC report. “Additionally, the Big 3 PBMs reimbursed their affiliated pharmacies at a higher rate than unaffiliated pharmacies on nearly every specialty generic drug examined,” the report stated.

In a July 2024 report, the FTC noted the three largest PBMs “wield enormous power and influence over patients’ access to drugs and the prices they pay. This can have dire consequences for Americans, with nearly three in ten surveyed Americans reporting rationing or even skipping doses of their prescribed medicines due to high costs.” Noting the impact of PBMs on independent pharmacy closures, the report stated: “Closures of local pharmacies affect not only small business owners and their employees, but also their patients. In some rural and medically underserved areas, local community pharmacies are the main healthcare option for Americans, who depend on them to get a flu shot, an EpiPen, or other lifesaving medicines.”

Between January 3, 2023, and January 31, 2025, Texas experienced a net closure of at least one pharmacy every week, impacting rural and urban counties. This year’s closure list includes a San Angelo pharmacy whose owner blamed the PBMs’ low reimbursement rates for his store’s demise in January after 68 years of serving the community. “We really get pennies on the dollar,” said Bryan Abernathy, the pharmacy owner.

“Year after year, we read the disturbing roll call of Texas pharmacies that had to close their doors because they were unable to survive amid PBMs’ anti-competitive tactics,” Dominguez said. “Our neighborhood pharmacies are small businesses that support their communities. Every time one closes, we lose jobs and tax dollars as well as a vital health resource.”

To address the anti-competitive tactics of PBMs, the Texas Pharmacy Association supports a package of bills now pending before the Legislature. They include:

• SB 1236 / HB 3317 – Protect patients and pharmacists from abusive PBM practices. Would require contract fairness and transparency, ensure compliance with existing PBM laws, and prohibit unfair fees.
  
• SB 1354 / HB 2978 – Prohibit below-cost reimbursement and require an appeal process for reimbursement errors.
  
• SB 1122 / HB 5102 – Ensure existing PBM reforms apply to all Texas residents and all PBMs in Texas.
  
• SB 493 – Ensure contracts between PBMs, health plans and pharmacies do not limit pharmacists’ ability to inform patients if their prescriptions would cost less when paying the cash price.
  
• HB 4533 – Require transparent reimbursement methodology for prescription drugs dispensed in Medicaid and state-funded programs.