Georgia Lawmakers Examine Pharmacy Middlemen Amid Concerns Over Drug Prices, Patient Access

Georgia state legislators are examining the role of pharmacy benefit managers (PBMs) following testimony from independent pharmacists who allege these insurance middlemen drive up drug prices and steer patients away from local pharmacies, particularly in rural areas.

The House Study Committee on Pharmacy Benefits Managers and Consumers’ Access to Prescription Medications, a high-powered legislative panel, met last month to address these concerns and plans its next meeting for Wednesday at the Mercer School of Medicine in Macon.

During the July hearing, Hugh Chancey, an independent pharmacist from southwest Georgia, recounted an incident where a business representative from a PBM relentlessly pushed for the transfer of an elderly patient’s prescriptions to another pharmacy, despite the patient’s explicit desire to continue using Chancey’s pharmacy. Chancey did not name the PBM involved but noted the company ultimately sent a transfer order by fax. Independent pharmacists like Chancey believe PBMs are making self-serving moves.

PBMs are billion-dollar businesses tasked with negotiating drug prices between insurance companies, drug makers, and pharmacies. They take a cut for their services, claiming to keep prices down. However, concerns arise because some PBMs, such as CVS Caremark, share ownership with major chain pharmacies and insurance companies, creating potential conflicts of interest. CVS Caremark serves Georgia’s State Health Benefit Plan.

Independent pharmacies across Georgia allege that PBM practices, including steering patients to competitor pharmacies and reimbursing independent pharmacies less than the cost of dispensing medicine, are driving them out of business. Katie Bell, who owned Bell’s Family Pharmacy in Tate, cited PBM pricing as a major factor in her pharmacy’s 2024 closure, leaving the town without its only retail pharmacy. Bell reported being reimbursed $1.90 by the state’s insurance middleman for dispensing a cholesterol-lowering drug, Lipitor, while big chains like CVS and Walgreens reportedly received an average of $46.87 for the same service, according to publicly available data from the State Health Benefit Plan. Independent pharmacy advocates also noted that without such closures, data on independent pharmacies' reimbursements would remain secret due to “gag clauses” in PBM contracts.

This issue disproportionately affects rural Georgia. According to a 2024 report from the Georgia Center for Rural Prosperity and Innovation, independent pharmacies outnumber corporate ones by six-to-one in Georgia counties with populations under 15,000. Five or six rural counties in the state currently have no pharmacy at all, making the loss of independent pharmacies a critical healthcare access problem.

For their part, PBMs maintain they are crucial in preventing “outlandish prices” charged by drug companies and that they save money for the public. Michael Power, a lobbyist for the Pharmaceutical Care Management Association, which represents PBMs like CVS Health, Express Scripts, and OptumRx, stated at the July hearing that PBMs have saved Georgia and health insurance payers “almost $30 billion over the last 10 years.”

Phillip Blando, a spokesman for CVS Health, reiterated that sentiment, stating that the company’s PBM does not aim to advantage CVS pharmacies. Blando noted that PBMs balance patient interests, including access to nearby pharmacies and helpful staff, with securing the best prices. He added that PBMs require a broad mix of pharmacies to serve patients across all areas. Blando also countered claims of unfair reimbursement, arguing that focusing on a limited subset of drugs does not provide a complete picture and that independent pharmacies would show better reimbursement figures if all drugs on the price list were averaged. He also mentioned an industry shift toward “more transparent reimbursement models.”

Georgia has previously taken steps to address PBM regulation. In 2025, Governor Brian Kemp signed House Bill 196, which mandated a basic fee for pharmacists dispensing prescriptions under the state employees’ health plan. However, in 2024, Governor Kemp vetoed a measure that would have required PBMs serving the State Health Benefit Plan to reimburse independent pharmacies at the same rate as chain pharmacies for identical drugs, citing unbudgeted costs, despite advocates’ belief that it would save the state money. Independent pharmacists also claim that despite existing anti-steering legislation, the practice continues.

Rep. Ron Stephens, a Savannah Republican and chairman of the study committee, stated his legislative goal is transparency. He highlighted difficulties faced by the Department of Community Health, which oversees the State Health Benefit Plan, in obtaining information from contracting PBMs. However, Power, the lobbyist for PBMs, suggested new federal rules were already addressing transparency concerns.

The billions of dollars at stake in drug prices ultimately impact patients through checkout costs and insurance premiums, as well as taxpayers. The legislative panel’s first meeting also included discussions on a controversial federal law mandating discounts for some hospitals on drugs from manufacturers, another high-stakes issue for rural health businesses.