PBMs, independent pharmacies continue to take potshots at each other

PCMA issues a report, 'Should Independent Drugstores Be More Accountable?'

The Pharmaceutical Care Management Assn. and the National Community Pharmacists Assn.—both fairly high-powered lobbying groups in Washington—have had a running battle over who best serves the interests of patients and payers; what NCPA lacks in the multibillion-dollar business membership that PCMA has, it more than makes up by having its 23,000 pharmacy owners spread throughout every Congressional district in the land, energetically making their case.

The latest salvo comes from the PCMA report, whose title is close to the classic “Have you stopped beating your wife yet?” PCMA notes that independents are eight times more likely than other pharmacies to submit “questionable” bills to Medicare (according to a May HHS OIG report); that some pharmacies have been implicated in gray-market diversion of short-supply drugs, which were then resold at extraordinary markups; and that most drug diversion of controlled substances occurs from brick-and-mortar pharmacies and not mail-order pharmacies that PBMs operate. “At independent drugstores, the owner, cashier, and book keeper are often one and the same. These

factors make independent drugstores more susceptible to irregularities and make oversight more challenging,” opines PCMA.

NCPA fired back almost immediately, calling the report “not fit to print,” and concluding that “For the PBM lobby to criticize independent community pharmacies for what PBMs claim are ‘opaque business practices and pricing strategies’ is the height of hypocrisy, akin to the pot calling the kettle black. PBMs spend vast resources intended to thwart any meaningful regulation and oversight of a secretive business model that has enabled them to mushroom from simple claims administrators to billion-dollar middlemen.”

NCPA does have a point that some of the instances of gray-market price gouging involved companies that were pharmacies in name only; several have been shut down after a recent Congressional investigation. But it also has a position that independent pharmacies should continue to be allowed to resell drugs to other pharmacies, “because it helps to alleviate temporary shortages, especially in rural areas where daily wholesaler deliveries may be more sporadic,” while asserting that "No pharmacy should be in the business of acting as a conduit to facilitate the activities of an illegitimate gray market." Additionally, there are restrictions on shipping controlled substances via mail in some regions, so it makes sense that PBMs (which operate most of the mail-order pharmacy business in the US) would be relatively uninvolved. And while the OIG report noted the billing irregulaties from independents, that report tagged 2,120 independent pharmacies—less than 10% of all independents—and left unanswered whether some of these irregularities were actually violations of HHS guidelines.

Floating in the background to these claims and counterclaims is a bill currently in Congress, HR 4215, the Medicare Pharmacy Transparency and Fair Auditing Act, which seeks to regulate the audit and billing-dispute procedures between pharmacies and PBMs. Introduced by Rep. Cathy McMorris Rodgers (R-WA) in March and emphatically suppported by NCPA, the bill remains in committee. PCMA says that the bill is designed to "make pharmacy audits more difficult."