Community pharmacies skirmish with pharmacy benefit managers (PBMs) over Medicare reimbursement

Brickbats continue to fly between community pharmacies (both chain and independent) and the PBMs, with the latter pushing for more use of mail order pharmacy and the former pushing for more oversight of PBM business practices. One goal of the PBM Reform Coalition, recently organized by Pharmacy Choice and Access NOW (PCAN), could potentially affect pharmaceutical manufacturers with respect to the transparency of the discounts, rebates, and other financial incentives that they offer pharmacy benefit managers (PBMs). The coalition includes such pharmacy groups as Walgreens and the National Association of Chain Drug stores, and one of its goals is to establish tighter audit standards for claims paid to pharmacies under the Medicare Part D program.

A bill introduced by Sen. Mark Pryor (R—AR) and now in committee, The Medicare Prescription Drug Program Integrity and Transparency Act (S.867), mostly covers standards that PBMs must meet regarding audits but does provide that PBMs must disclose to a pharmacy, at the time a contract is offered, the methodology and actual per unit reimbursement amount for each covered drug for each pharmacy. While working in support of this law, the coalition intends to highlight the need for federal legislation to address inconsistent and nontransparent reimbursement rates.

Dennis Wiesner, VP of the Texas State Board of Pharmacy and a senior director at H-E-B, a Texas food and drug chain (and PCAN member), says that the spread between the costs charged to plan sponsors and the amount that the PBMs actually have paid out is very wide, and plan sponsors have difficulty determining the actual amount of reimbursements to pharmacies as well as the actual amounts of payments to manufacturers for drugs. Concerns are widespread that PBMs are not passing along cost savings to plans as originally intended. Pharmacies also have concerns about reimbursement rates that are under their actual costs.

The coalition also intends to address another issue reported by pharmacies, improper use of patients’ information. Wiesner says, “Some PBMs have ownership interests in mail-order, community, and specialty pharmacies, giving them access to consumer’s personal and medical information. Some PBMs allegedly have used this information to persuade medical providers and consumers to purchase drugs through the pharmacies they own and have given the information to marketing providers under the same ownership as the PBMs.”