EBENSBURG, Pa. — A contract fight between Express Scripts and Martella Pharmacies is moving to federal court in Pittsburgh, prolonging uncertainty for a rural Pennsylvania pharmacy chain that says its survival is at stake, according to reporting by the Pittsburgh Post-Gazette.
Attorneys for St. Louis-based Express Scripts filed a petition Wednesday to transfer the case to the U.S. District Court for the Western District of Pennsylvania. The move continues a stay on proceedings after a Cambria County judge issued an injunction last week preventing Express Scripts from canceling its contract with Martella Pharmacies.
The six-store chain, which employs 271 people across Cambria County, relies on Express Scripts for as much as 80% of its prescription business. If the contract is terminated, Martella would be excluded from the pharmacy benefit manager’s network, forcing many customers to pay full price for prescriptions. Highmark, UPMC Health Plan, Express Scripts’ parent Cigna, and others are also named as defendants.
Express Scripts stated that it severed ties with Martella after the company allegedly failed to disclose disciplinary actions related to the handling of controlled substances. The PBM pointed to prior incidents involving former owner Joseph Martella, who pleaded guilty in 2020 to charges tied to narcotics distribution, and a former employee convicted of stealing medications in 2022.
The dispute highlights the broader tension between independent drugstores and pharmacy benefit managers, which negotiate drug prices and control access to insurance networks. PBMs have come under growing scrutiny from lawmakers and regulators who say their reimbursement practices are pushing local pharmacies out of business and creating “pharmacy deserts” in rural areas. The Federal Trade Commission is currently investigating PBM practices, and several states are weighing laws aimed at curbing their market power.
Martella Pharmacies has been a fixture in the community since the 1960s. Owner Jacqueline Martella declined to comment. The lawsuit seeks class-action status on behalf of thousands of plaintiffs.
The dispute arises amid growing criticism of pharmacy benefit managers, which independent pharmacists argue are squeezing reimbursements and contributing to closures. In recent years, dozens of independent pharmacies have shuttered across western and central Pennsylvania, including 11 Mainline Pharmacy stores last year.
Outside the courthouse on Wednesday, a group of approximately 15 customers protested the potential termination of the contract. “To save jobs in this community, we need to push back, or a pharmacy desert will be the result,” said Johnstown resident Jackie Kulback. “This is wrong on so many levels.”
