The last time the small-town pharmacy closed was on a sunny, chilly afternoon in February. Jon Jacobs, who owned Yough Valley Pharmacy, said goodbye to his employees. He cleaned out the shelves and stuffed the medicine bottles into plastic boxes.
Mr. Jacobs, a 70-year-old pharmacist, has spent more than half his life building a pharmacy on the base of Confluence, Pennsylvania, a rural town of about 1,000 people. Now, the town was losing its only medical provider.
A discreet but powerful medical intermediary, a company known as a pharmacy benefit manager (PBM), destroyed his business.
A New York Times investigation found that this is happening all over the United States. PBMs, hired by employers and government programs to oversee prescription drug benefits, are systematically underpaying small pharmacies, forcing hundreds of them out of business.
This pattern has benefited the largest PBMs, whose parent companies operate their own competing pharmacies. When local drugstores go out of business, benefits agents often scoop up customers, according to dozens of patients and pharmacists.
