Pennsylvania's embattled automobile insurance reform law is facing further litigation; this time from drug stores that the Insurance Department claims must cut prescription fees by 20 percent for auto accident victims.
Carmen DiCello, executive secretary of the Pennsylvania Pharmaceutical Association, said the typical drug store in the state makes a 3 percent profit, and would go bankrupt under a 20 percent price cut. He added that if necessary, the association would go to court for a clarification of the issue. The druggists claim they sell a product; not a service.Amy K. Dugan, spokeswoman for the Insurance Department, said the department was willing to consider exempting pharmacies from the new law if they could prove that a 20 percent price cut was unreasonable.
In addition to mandating a July 1 rate rollback of 10 percent for tort coverage and 22 percent for a consumer-optional no-fault policy, the new law caps fees of physical and other health care practitioners at 110 percent of Medicare payments for the procedure. The cap became effective April 15.