Illinois distributes first $25M to local pharmacies to help them compete

CHICAGO — Gov. JB Pritzker announced Friday that 434 Illinois pharmacies will receive nearly $25 million in support, the first distribution of annual funding established through legislation he signed last year.

The fund was designed to assist pharmacies most at risk of closure or financial strain, especially those in rural and low-income communities with limited healthcare access. The pot was split equally between all eligible applicants, with each pharmacy receiving $56,892.

“Local pharmacies are often one of the most accessible and affordable points of care for working families, seniors, and Medicaid patients — providing medications, vaccinations, and trusted health care services,” Pritzker said in a news release.

The money was established under bipartisan legislation Pritzker signed last July. The bill, known as the Prescription Drug Affordability Act, put new regulations on pharmacy benefit managers, or PBMs, companies that are responsible for negotiating drug prices between employer health insurance plans and pharmaceutical drug companies.

They have been the target of intense scrutiny in recent years, facing accusations of steering patients toward their own affiliated pharmacies and designing healthcare pricing formulas that boost their own profits rather than patient savings, including a lawsuit from the Federal Trade Commission against the three largest PBMS for their alleged use of anticompetitive practices to artificially inflate insulin prices.

The legislation prohibited PBMs from steering customers toward large pharmacies in which they have a financial interest — often to the detriment of smaller independent pharmacies — and required they pay a fee based on the number of individuals in the state enrolled in the PBM’s plans.

At the time the legislation passed, a lobbying organization representing the PBMs criticized the bill as “misguided” and said it would have little to no impact on high prescription drug prices set by “Big Pharma.”

Read more: Pritzker signs health care legislation

The first $25 million in fees collected were placed in a special fund for independent pharmacies, which can use the money to support existing operations, as well as expansions of business hours and new offerings, such as telepharmacy services, remote consultations and medication delivery.

But the funding is not constrained to specific spending options, allowing pharmacies to use it however they see fit. For a Sav-More pharmacy in Virden, Illinois, that looks like a new parking lot.

“Limitations with parking, the lack of a drive-through, and space constraints have made it difficult to expand the services our community deserves,” said Sav-Mor Pharmacies President David Falk.

The funding has allowed the Virden location to partner with Carlinville Hospital to construct a new 3,500 square-foot facility next to a new clinic, featuring “ample parking, modern technology, (and) a drive-through,” and employing additional staff.

“This project would not have been possible without the vision and commitment of Governor Pritzker and his administration,” Falk said, adding that PBM reimbursement practices had hindered independent pharmacies like Sav-More.

The program, administered by the Department of Commerce and Economic Opportunity and the Illinois Retail Merchants Association, granted funding to pharmacies in 252 cities scattered across 94 of the state’s 102 counties.

Prioritized were pharmacies in rural or medically underserved communities and small independent pharmacies with fewer than 10 locations.

A full list of pharmacies receiving the support can be found here.

Capitol News Illinois is a nonprofit, nonpartisan news service that distributes state government coverage to hundreds of news outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.