by Ariel Hart, Georgia Recorder, [This article first appeared in the Georgia Recorder, republished with permission]
August 26, 2026
A business rep was on the phone telling Hugh Chancey’s pharmacy in southwest Georgia to transfer all of an elderly patient’s prescriptions away to another pharmacy.
The patient herself said that’s not what she wanted, Chancey recounted, but the company was relentless. After a three-way phone call where the patient said she wanted to keep using Chancey’s pharmacy, an order came over by fax anyway, saying to transfer the prescriptions.
Chancey relayed that story to high-powered state legislators last month. The group, a House study committee, is taking on the question of medicine regulation in Georgia. The business caller he described was an insurance middleman called a pharmacy benefit manager, or PBM, and is one of the subjects in the committee’s sights.
The insurance middlemen are billion-dollar businesses that say they protect the public good. Their job is to negotiate drug prices between insurance companies and drug makers and pharmacies, to keep prices down. And for that, they take a cut.
But that can get complicated when the middlemen have sister companies that are other pharmacies, competing for customers against all pharmacies. One prominent example of a PBM is CVS Caremark, which shares the same owner as CVS pharmacies and a major insurance company. They serve Georgia’s State Health Benefit Plan.
Chancey did not name the PBM in his anecdote.
“We’re not asking for special treatment,” Chancey said. “We’re asking for a level playing field.”
The insurance middlemen insist they do not game the system; that it’s the other way around. But they are under scrutiny nationwide. Georgia has led the nation in some small steps to prevent potential harms, and the state House of Representatives’ study committee is taking the issue on again during the legislative off season. Its next meeting is planned for Wednesday at the Mercer School of Medicine in Macon.
The group is called the House Study Committee on Pharmacy Benefits Managers and Consumers’ Access to Prescription Medications.
The first meeting, held in July, also carried several presentations not about PBMs, but about a controversial federal law mandating discounts for some hospitals on drugs from manufacturers. Like the issue of middlemen, the discount program is hotly contested, high stakes and touted as a life-or-death issue by some rural health businesses.
When it comes to PBMs, independent pharmacists like Chancey believe the middlemen are a blight: driving independent pharmacies in Georgia out of business, costing the state millions of dollars in higher drug payments and depriving rural patients of crucial healthcare options. Independent pharmacies allege that the middlemen make self-serving moves like steering patients away to a competitor – a practice Georgia has already tried to curb – or making them sell a medicine for less than what the pharmacist even spends to fill it.
For their part, the middlemen say they are all that lies between patients and outlandish prices that drug companies like to charge. They say that on the contrary, they save money for the public – and that independent pharmacies cherry-pick their data.
“PBMs have saved the state of Georgia and (organizations paying for health insurance) almost $30 billion over the last 10 years,” said Michael Power, a lobbyist for the Pharmaceutical Care Management Association who spoke at the July hearing. The association represents the middlemen, including CVS Health, Express Scripts and OptumRx.
A spokesman for CVS Health echoed that sentiment, and added that the company’s PBM does not set out to advantage CVS pharmacies. The spokesman, Phillip Blando, said they juggle patients’ interests, including their desire for a nearby pharmacy, with helpful staff and the best price the patient can receive – and it’s up to each pharmacy, independent or chain, to earn that.
“In order to meet our clients’ contractual requirements, we need a broad mix of pharmacies – including independent pharmacies – to serve patients in urban, suburban, and rural areas,” Blando said.
Georgia stands out for its efforts to rein in pharmacy middlemen
Losing independent pharmacies is especially a problem in rural Georgia, where five or six counties have no pharmacy at all. In Georgia counties with less than 15,000 people, independent pharmacies outnumber corporate ones by 6-1, according to a 2024 report from the Georgia Center for Rural Prosperity and Innovation. When Bell’s Family Pharmacy closed in Tate in 2024, the town lost its only retail pharmacy. The owner, Katie Bell, said one big factor causing her to close was PBM pricing.
Bell cited the example of getting reimbursed $1.90 by the state’s insurance middleman for dispensing the popular cholesterol-lowering drug Lipitor – her total reimbursement for buying the drug, paying someone to fill it, buying the bottle, running the label printer and keeping the lights on.
In contrast, the PBM was paying an average of $46.87 to big chains like CVS and Walgreens for the same thing, citing publicly available data from the State Health Benefit Plan.
If Bell hadn’t gone out of business, the independent pharmacy’s data would still be secret under a gag clause in the PBM contract, pharmacy advocates said.
But Blando, the CVS spokesman, said that if they averaged together all the drugs on the price list, not just the most common ones, independent pharmacies would have the far better reimbursement figure.
“Focusing on a limited subset of drugs does not provide a complete picture of pharmacy reimbursement,” Blando said this week. “As the industry moves toward more transparent reimbursement models, such as CVS Pharmacy’s Cost Vantage approach, the focus is increasingly on the underlying cost of a drug and the professional services required to dispense it, rather than isolated pricing examples.”
This year’s study committee is small but has unusually influential members. They include the chairman of the powerful House Rules Committee, which decides what bills might get a floor vote, and of the committee that oversees the state budget.
They drew a standing-room-only audience of lobbyists, including from drug companies, pharmacies and hospitals, some who came from hundreds of miles away.
Trying to wade through the competing data, find out how to best protect patients in the drug market and then make it happen, is a struggle. Georgia has gone at it before, leading the nation in small steps but ones that advocates called meaningful.
In 2025, Gov. Brian Kemp signed a law, House Bill 196, mandating a basic fee for pharmacists each time they dispense a prescription under the state employees’ health plan.
But the effort has had uneven progress.
The House this spring voted to create the committee after bigger legislation focused on insurance middlemen died in that chamber.
And in 2024, Kemp vetoed a measure that passed overwhelmingly. That bill would have required PBMs serving the State Health Benefit Plan to reimburse independent pharmacies as much as chain pharmacies for the same drugs. Kemp said in his veto that that could cost the state money that it hadn’t budgeted for. Advocates for the bill believed it would save the state money, though.
Further, the independent pharmacists say that despite anti-steering legislation, the practice still goes on.
A push for more transparency?
The chairman of the study committee, Rep. Ron Stephens, a Savannah Republican, said his legislative goal is transparency.
“You know, whenever our own Department of Community Health (which oversees the State Health Benefit Plan) cannot get information to base decisions on from the very PBM that they’re contracting with, it’s ridiculous.”
Committee membership:
The study committee is chaired by Rep. Ron Stephens, a Savannah Republican, who also chairs the House Economic Development and Tourism Committee and is himself a pharmacist. The other four members are:
- Rep. Matt Hatchett, a Dublin Republican, the chairman of the Appropriations Committee, which oversees the state’s budget;
- Butch Parrish, a Swainsboro Republican, chairman of the Rules Committee, which decides which bills might come up for a final House vote;
- Health Committee Chairman Lee Hawkins, a Gainesville Republican; and
- One Democrat, health executive Rep. Debbie Buckner, of Junction City.
But Power, the lobbyist for PBMs, said that new federal rules were taking care of the transparency issue.
The billions of dollars at stake in drug prices are ultimately paid by patients at the check-out window and in their insurance premiums, and by taxpayers.
The legislative panel will also take up the issue of a hotly contested hospital pharmacy discount program. To some attendees’ surprise, that program took up a large portion of the committee’s inaugural meeting.
The program is called 340B, after the federal law that created it. Under the law, drug companies are forced to give some hospitals and clinics that serve the poor the best discounts they offer. Drug makers that say hospitals are gaming the program – like buying a hospital in a poor area just to get the discount that they then use in another location for better-paying patients – and also by using the money for things it was never intended to fund. Hospitals, on the other hand, say it’s a crucial tool to keep indigent care afloat.
Under the program, designated facilities like hospitals can buy a drug at the company’s most discounted price, but then they get reimbursed by insurance for the full price. Eligible hospitals and clinics wind up with extra money, and they have come to depend on it for just running operations.
This year, a bill that would restrict drug companies’ attempts to rein in use of the discount program never made it out of the House of Representatives. That bill was House Bill 139.
Facing the sea of conflicting claims and complex data, members of the committee said they’re there to learn and that Georgia healthcare is at stake.
“I think there’s a lot of confusion” about the basic issues, said Rep. Butch Parrish, a Swainsboro Republican and member of the study committee who also chairs the House Rules Committee. “A lot of people don’t really understand it, and it depends on who you talk to, sort of what twist you hear. And I think hopefully that’s what we’re going to do in our committee – to really get down into the weeds and get some good information, so we can make intelligent, good decisions going forward.”
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