How a small WV pharmacy helped expose a multimillion dollar shell game
For years, it's been a disturbing pattern: Smaller, regional pharmacies closing because they cannot compete against what's being called a "rigged" system.
For decades, Lynne Fruth has worked as the president and CEO of Fruth Pharmacy. At their peak, the stores had more than 30 locations across the Tri-State.
"If they didn't want to fill something because it was a loser, as we say, they would tell their patients, take it over to Fruth Pharmacy, because we understand that they're filling it,” she said.
But keeping her customers came at a crushing cost.
"And we did fill things for much longer at a loss than a lot of people did because it was the right thing to do,” Fruth said. “But then the economics of it come in, and you're like how do you buy a product for $100, when you're selling it for $50?"
Prices weren't adding up. In fact, they realized their health plans were being billed thousands for a drug that an uninsured patient could walk in and buy in cash for a fraction of the price.
"That's when people, both in the business side and the pharmacy side started to say, ooh, there's something really terrible going on here,” she said.
"Items shouldn't be orders of magnitude different in price, depending on who the payer is,” said Roger Hanshaw, the Speaker of the House of Delegates in West Virginia.
But in 2024, when Fruth started talking publicly about pricing issues, those pharmacy benefit managers (PBMs) issued her a cease-and-desist.
Hanshaw knew there was more to the story, and issued a subpoena, so she could testify.
"We don't like to do that,” he said. “We like it when the public and the involved parties participate in open and productive dialogue with us in a collaborative and cooperative way. But if we can't do it the easy way, we will do it the hard way."
"So, there was a nice little shell game going on, whereby that $100 drug, that maybe they paid $101 to the pharmacy for,” said Fruth. “But then they went over here, the PBM went and charged the insurance plan $200. The insurance plan has no idea they're getting ripped off, because they have no idea what the pharmacy got paid."
She called it seeing inside the industry's hidden ledger.
"It was like we finally have the black book and now we can see all of the stuff that's inside,” said Fruth. “And one of the senators said the only book that we've had open is our checkbook."
It's something JB McCuskey has been focused on since taking over as West Virginia's attorney general in 2025.
And while damage from the pricing inequality is done, Hanshaw knows the efforts to preserve pharmacies and patients certainly isn't.
"Even if it were nothing more than constant, continuous oversight of these programs, there's also a reason for the legislature to have its thumb on the pulse of this issue,” he said.
West Virginia's neighbors to the north also noticed.
"Ohio then decided that the system that they were using, which was to operate a for-profit corporation to run this better was a disaster,” said Fruth.
All total, pricing discrepancies led to over 200 small pharmacies closing across Ohio.
"Ohio Medicaid was reimbursing at such a low amount that you couldn't afford to do business with Ohio Medicaid,” Fruth said.
"We need to make sure that every single dollar gets spent wisely, and that we're not getting taken advantage of by these multinational corporations," said Hanshaw.
Nationwide, attorneys general have been working together to address the pricing problems.
Recent settlements with manufacturers Glenmark and Sandoz indicate what they've been doing may be working.
"They're running scared,” said McCuskey. “I think they understand that we got them and the next wave of cases involving their prices are coming."
While her shops are now all closed, the efforts she made to bring transparency may have saved others from suffering a similar fate.
"We saved lives across our footprint, and we did that because it was the right thing to do,” said Fruth. “And that is why I'm telling you that pharmacy has to survive."
For decades, Lynne Fruth has worked as the president and CEO of Fruth Pharmacy. At their peak, the stores had more than 30 locations across the Tri-State.
"If they didn't want to fill something because it was a loser, as we say, they would tell their patients, take it over to Fruth Pharmacy, because we understand that they're filling it,” she said.
But keeping her customers came at a crushing cost.
"And we did fill things for much longer at a loss than a lot of people did because it was the right thing to do,” Fruth said. “But then the economics of it come in, and you're like how do you buy a product for $100, when you're selling it for $50?"
Prices weren't adding up. In fact, they realized their health plans were being billed thousands for a drug that an uninsured patient could walk in and buy in cash for a fraction of the price.
"That's when people, both in the business side and the pharmacy side started to say, ooh, there's something really terrible going on here,” she said.
"Items shouldn't be orders of magnitude different in price, depending on who the payer is,” said Roger Hanshaw, the Speaker of the House of Delegates in West Virginia.
But in 2024, when Fruth started talking publicly about pricing issues, those pharmacy benefit managers (PBMs) issued her a cease-and-desist.
Hanshaw knew there was more to the story, and issued a subpoena, so she could testify.
"We don't like to do that,” he said. “We like it when the public and the involved parties participate in open and productive dialogue with us in a collaborative and cooperative way. But if we can't do it the easy way, we will do it the hard way."
"So, there was a nice little shell game going on, whereby that $100 drug, that maybe they paid $101 to the pharmacy for,” said Fruth. “But then they went over here, the PBM went and charged the insurance plan $200. The insurance plan has no idea they're getting ripped off, because they have no idea what the pharmacy got paid."
She called it seeing inside the industry's hidden ledger.
"It was like we finally have the black book and now we can see all of the stuff that's inside,” said Fruth. “And one of the senators said the only book that we've had open is our checkbook."
It's something JB McCuskey has been focused on since taking over as West Virginia's attorney general in 2025.
And while damage from the pricing inequality is done, Hanshaw knows the efforts to preserve pharmacies and patients certainly isn't.
"Even if it were nothing more than constant, continuous oversight of these programs, there's also a reason for the legislature to have its thumb on the pulse of this issue,” he said.
West Virginia's neighbors to the north also noticed.
"Ohio then decided that the system that they were using, which was to operate a for-profit corporation to run this better was a disaster,” said Fruth.
All total, pricing discrepancies led to over 200 small pharmacies closing across Ohio.
"Ohio Medicaid was reimbursing at such a low amount that you couldn't afford to do business with Ohio Medicaid,” Fruth said.
"We need to make sure that every single dollar gets spent wisely, and that we're not getting taken advantage of by these multinational corporations," said Hanshaw.
Nationwide, attorneys general have been working together to address the pricing problems.
Recent settlements with manufacturers Glenmark and Sandoz indicate what they've been doing may be working.
"They're running scared,” said McCuskey. “I think they understand that we got them and the next wave of cases involving their prices are coming."
While her shops are now all closed, the efforts she made to bring transparency may have saved others from suffering a similar fate.
"We saved lives across our footprint, and we did that because it was the right thing to do,” said Fruth. “And that is why I'm telling you that pharmacy has to survive."
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