In Burke County, a visit to the local pharmacy is more than just a routine errand it’s a familiar stop where you can count on a friendly smile behind the counter and personalized care. 

But small-town pharmacies across the country are facing a looming threat, one that many residents might not even realize exists: Pharmacy Benefits Managers or

PBMs. 

PBMs are the “middle- men” in the prescription drug supply chain. Originally established in the 1960s to help manage prescription benefits for insurers and negotiate drug prices with manufacturers, PBMs have grown into powerful Wall Street-traded corporations with significant control over what medications cost and how pharmacies are reimbursed.

According to the Federal Trade Commissions second interim staff report on prescription drugs released on Jan. 25, the three largest PBMs – CVS Caremark, Express Scripts, and OptumRx—now control about 79% of the market, and dictate anti-competitive contracts that leave small pharmacies struggling to survive.

One local pharmacy owner, who asked to remain anonymous, shed light on the harsh reality of below-cost reimbursements. We are losing on scrips,” they said. “A popular drug like Ozempic was $900-$950, and now that median price has jumped to $1,250. Of-ten, on brand-name drugs sold at the pharmacy, we net a loss of $20, sometimes even $60. Even with generics, we are still getting squeezed.”

These financial strains are the result of practices like spread pricing and below-cost reimbursements — two of the many complex strategies employed by PBMs.

Cristy Gupton, president of

Custom Health Solutions explained how this works: “PBMs reimburse the pharmacy at a lower amount while charging the health plan much more. The spread in between is what the PBM keeps.” The result is a situation where pharmacies often dispense medication at a loss, unable to cover even their acquisition costs.

These financial losses aren’t just a numbers game. When a PBM reimburses a pharmacy below cost, the pharmacy is left to make up the difference.

This is particularly difficult for brick-and-mortar pharmacies that lack the financial cushion of large chains.

“When our contract with the PBM causes a customer to either pay more or change what they have been taking, they blame us.” the pharmacist® said. “And then the PBM will redirect the customer to their pharmacy or mail order in-stead.” This is called patient steering, where the PBM steers patients to their commercial pharmacies promising lower co-pays and faster delivery of medication.

Gupton echoed this senti-ment, pointing to the opaque nature of PBM practices. “If it weren’t for PBMs. the price of insulin would be about $1.000 a year, about $80 a month.” she said. “The manufacturer’s cost has stayed fairly flat, but the margin that the patient has to pay is all in the PBM rebate. It’s extortion, in my opinion.” 

PBMs not only control pricing but also engage in practices that many see as anti-competitive. For example. PBMs often own their own pharmacies, including specialty and mail-order services.

The PBM can direct patients to these in-network options, leaving independent pharmacies out in the cold. “If we try to fight back against it then we risk getting audited, but PBMs won’t audit them-selves,” the local pharmacist said

Gupton explained how this anti-competitive behavior works: “PBMs come back later to the community pharmacy and charge them back DIR (Direct and Indirect Remuneration) fees. often called claw-backs. They create bureaucratic red tape that essentially says the community pharmacy didn’t follow all of the rules, so they take back the reimbursement.”

This practice creates an environment where local pharmacies operate under constant financial threat. “I’m trying to provide a service to my customers, but I can’t keep taking losses on scrips forever or I’ll have to close down,” shared the pharmacist.

Without state intervention, closure of small-town pharmacies across towns in Burke County could be a real outcome. According to the North Carolina Association of Pharmacists, more than 100 pharmacies closed between 2022 and 2024 with that number only projected to increase without legislation.

At the start of 2025, House Bill 246, which aimed to regulate Pharmacy Benefit Manager (PBM) practices in North Carolina, stalled in the state Senate and ultimately died from inaction.

In response, Rep. Heather Rhyne, along with several other members of the N.C. General Assembly, including Rep.Hugh Blackwell, introduced House Bill 163. a renewed effort to bring transparency and fair practices to the PBM industry in the state.

“We’re at a tipping point,” Gupton said. “If these trends continue, small-town pharmacies could disappear, leaving residents with fewer options, higher costs. and reduced access to critical medications.”

Nathanael Eure is a staff writer with The Paper. He mav be reached at 828-445-8595 or nathanael@thepaper.media.