Owners of independent pharmacies in Georgia are criticizing Gov. Brian Kemp’s decision this week to veto legislation aimed at rectifying a situation that has left them at a competitive disadvantage with pharmacy chains.

Senate Bill 198, which the state House and Senate passed with only one “no” vote, would have required the State Health Benefit Plan (SHBP) covering teachers and state employees to reimburse independent pharmacies filling prescriptions at rates no less than the average reimbursement provided to chain pharmacies.

In the most severe instance, pharmacy chains are being reimbursed for atorvastatin, a cholesterol-lowering drug known by the brand name Lipitor, at rates 2,000% higher than the reimbursements independent pharmacies are getting for the same drug.

Bell’s Family Pharmacy in Jasper, which went out of business in February, was being reimbursed just $1.90 for a 90-day supply of Lipitor, while the three closest chain pharmacies were getting $46.87, according to a chart compiled by CVS Caremark, which administers pharmacy benefit services for the SHBP.

“You can’t stay in business for $1.90,” said Denise Bennett, who owns two independent pharmacies in Blackshear and Nahunta. “Many pharmacies are closing because of this practice. … It’s just sad.”

Indeed, independent pharmacies have closed their doors in recent years in Cornelia, Dunwoody, Suwanee, Fayetteville, Helen, Clarksville, Hartwell, Royston, Statesboro and Waycross, citing low reimbursement rates for prescriptions.

“These were folks that stayed open during COVID,” said state Rep. Ron Stephens, R-Savannah, who owned an independent pharmacy until he retired from the business in 2016. “In some cases, they were the only health care in town.”

In his veto message, Kemp pointed to fiscal estimates showing that implementing the bill would cost the state Department of Community Health (DCH) $11 million to $45 million per year, funds the General Assembly did not provide.

As an alternative, the governor wrote, the fiscal 2025 state budget he signed this week includes one-time funding for a dispensing fee of $3 per prescription for independent pharmacists, increasing to $11.50 for independent low-volume pharmacies filling prescriptions for Medicaid patients. The budget also directs the DCH to use existing funds for an actuarial study on SHBP independent pharmacy prescription drug reimbursements, he wrote.

“These budget items provide an appropriate, fiscally sound approach to supporting independent pharmacists this year while obtaining necessary information to aid the department in evaluating current and future management of the state’s pharmacy plan,” Kemp wrote.

Stephens said the dispensing fee might allow some independent pharmacies to keep their doors open. But he vowed to mount another push next year for legislation evening the playing field for independent pharmacists.

Capitol Beat is a nonprofit news service operated by the Georgia Press Educational Foundation that provides coverage of state government to newspapers throughout Georgia. For more information visit capitol-beat.org.