Illinois State Senator Li Arellano, Jr. is sounding the alarm on what he describes as persistent failures within the state’s Medicaid system, threatening the survival of independent pharmacies. A state audit in May 2023 revealed more than $100 million in annual discrepancies between what managed care organizations pay pharmacy benefit managers and the amounts ultimately received by pharmacies. Despite legislation prohibiting unwarranted “spread pricing,” gaps in oversight mean these rules aren’t being enforced. Arellano is urging the Department of Healthcare and Family Services to intervene, using its current authority to require fair reimbursement levels, in an effort to protect independent pharmacies and the communities they serve.
“This is unacceptable,” Senator Arellano said. “HFS owes it to independent pharmacies and the patients who rely on them to fix this broken process. Allowing pharmacies to be reimbursed below cost is inexcusable, and the longer this goes on, the more damage it does to communities that depend on them.”
“Independent pharmacies are often the only point of access to medication and care in many of our rural and underserved communities,” Senator Arellano said. “When they’re forced to operate at a loss, you’re not just hurting a business, you’re cutting off entire communities from the care they rely on. If this continues, pharmacies will close, and for some families, that could mean driving miles just to fill a prescription or going without altogether.”
Advocates warn that, without immediate intervention, access to medication for rural and underserved residents across Illinois could be jeopardized.
“Pharmacies are still being reimbursed below cost while PBMs have yet to answer for the findings of the 2023 Performance Audit, and HFS has not taken the necessary action to ensure taxpayer dollars actually reach the pharmacies providing care,” Bagot said. “HFS is aware these funds are being diverted within the managed care system, yet has failed to direct MCOs and PBMs to correct it. The solution is not about increasing payments, it is about enforcing accountability and ensuring existing dollars are used as intended to protect patient access. Without action, pharmacies will continue to close and patients will pay the price.”
“If we don’t fix this, pharmacies will close and patients will lose access to care,” Senator Arellano said. “The State has the authority to act. It’s time to use it.”