NASHVILLE, Tenn. (WKRN) — A new law went into effect Jan. 1 of this year, increasing something called ‘dispensing fees.’

“Any and all pharmacists in the state of Tennessee should be for this law,” Princeton Drug and West Towne Pharmacy pharmacist Dr. Kristen Archibald said.

The reason, according to Dr. Archibald, is it helps local pharmacies to compete with bigger box stores. The extra fee is, according to pharmacists, expected to be paid by insurance companies, not customers.

But pharmacies say middlemen are twisting that, potentially leading many to walk away from their local small-town pharmacies. Last week, several people connected to the insurance companies said it would cost patients nearly $700 per year because of the increase, which local pharmacies dispute.

“He said it’ll cost patients between $40 and $50 more for a prescription,” Lascassas Drugs pharmacist Dr. Candi Mathis said. “I have no idea where that number comes from.”

A dispensing fee is something insurance companies pay to pharmacies for actually ‘dispensing’ each prescription. Prior to this new law, it was generally a marginal amount.

“Metformin costs about fifty cents for 60 pills,” Lebanon Family Pharmacy pharmacist Dr. Hetal Patel said. “We submit a claim, we get back, ‘Well, we’re only going to pay you 30 cents and on top of it, we’re going to charge you a 25-cent transaction fee because you submitted a claim to us.’”

So, in that example, a local pharmacy would only make five cents.

Now under this new law, they’re supposed to get $11.98 per prescription from insurance companies.

“That’s the dispensing fee in the real world that insurance companies should be paying the pharmacies,” Dr. Patel said. “That is not happening.”

“The PBMs aren’t even paying me on half my claims,” Dr. Mathis said, separately. “My dispensing fees right now from PBMs are zero to ten cents.”

PBM stands for pharmacy benefit manager, a position that essentially acts as a third party that’s responsible for processing and paying out insurance claims.

Pharmacists say the new law forces them to act responsibly.

“That’s what the new law is made for is to make sure that we are protected, make sure that we are getting paid enough to survive this cutthroat world, the business part of it,” Dr. Patel said.