Maryland Pharmacy Closures Rose Amid PBM Pricing Disputes
Pharmacy owners are closing locations as reimbursement rates fail to cover the rising costs of acquiring and dispensing drugs.
Updated on Oct. 3, 2026 in Healthcare
Live Poll
Should states set minimum reimbursement rates for pharmacies to keep local drugstores open?
In June 2026, pharmacy owners across Maryland closed locations due to unsustainable reimbursement rates from pharmacy benefit managers (PBMs). The closures have left residents in communities like Hancock with significantly reduced access to critical prescription medications.
Why it matters
Pharmacists argue that current PBM reimbursement models force them to operate at a loss by failing to cover the actual cost of drugs and dispensing fees. This economic pressure is creating pharmacy shortage areas, forcing patients to travel longer distances for care.
More than 525,000 Maryland residents currently live in defined pharmacy shortage areas, with patients often forced to travel 10 to 15 miles for prescriptions. In contrast, West Virginia has stabilized its market by mandating a $10.49 dispensing fee.
The players
Ken Reed
An independent pharmacist who closed his practice in Hancock, Maryland, citing unsustainable reimbursement rates.
West Virginia Office of the Insurance Commissioner
The state regulatory agency that found pharmacy reimbursement reforms did not negatively impact insurance premiums.
The details
PBMs dictate the reimbursement rates paid to pharmacies, which pharmacists claim often fall below the acquisition cost of the medication. While Maryland law prohibits PBMs from reimbursing pharmacies less than their own affiliates, local operators are lobbying for a minimum reimbursement floor tied to National Average Drug Acquisition Cost (NADAC). Without these statutory protections, independent pharmacies like those in Hancock struggle to remain viable.
Timeline
2019: Maryland passed initial legislation regarding PBM reimbursement rates.
2022: West Virginia enacted a law requiring reimbursement at NADAC plus a fee.
2024: Senate Bill 1021 and House Bill 880 failed to advance in the Maryland legislature.
June: Pharmacist Ken Reed closed his pharmacy in Hancock, Maryland.
Market Landscape
Maryland is attempting to catch up to states like West Virginia, which successfully enacted reimbursement floors tied to NADAC. This regulatory struggle mirrors broader national debates over whether PBM oversight can protect independent pharmacies without driving up insurance premiums.
Pharmacy operators should monitor future legislative sessions for new attempts to mandate minimum reimbursement rates. Owners should assess their current PBM contracts to determine the spread between their acquisition costs and the reimbursement rates received.
The takeaway
The struggle for fair PBM reimbursement has moved from legislative debate to local survival, resulting in access gaps in smaller towns like Hancock. Operators should track local insurance commission findings, as these reports often serve as the primary evidence cited by lawmakers when considering future reimbursement reform bills.
Further reading
Learn more about the state's Healthcare policy shifts and provider access trends.
Live Poll
Should states set minimum reimbursement rates for pharmacies to keep local drugstores open?
