Increasing Transparency into Generic Drug Price Spikes, Payments

Background

Independent community pharmacies suffer from a lack of transparency on how they are reimbursed by large corporate PBMs for dispensing generic medications. This has an effect on patients as well as generics account for about 80 percent of drugs dispensed by independent community pharmacies, and are promoted to help save beneficiaries, Medicare and other public and commercial health plans money.

Many generic medications are subject to an arbitrary maximum allowable cost (MAC) list. This artificial cap limits what PBM corporations will pay a pharmacy for dispensing these medications. While prices for many generic drugs are skyrocketing by 1,000% or more virtually overnight, the PBMs may wait months to update reimbursement rates while providing little, if any, rationale on how the rate is determined. That leaves independent community pharmacies with losses of $40 to $100 or more per prescription. Such losses are unsustainable by any small business, and for patients who rely on these medications, it may make it difficult to obtain them if pharmacies are unable to stock them at the price point determined by the PBM.

In addition, as prices skyrocket, PBMs may be paying pharmacies low and charging much higher rates to health plans, including taxpayer funded plans such as Medicare Part D, TRICARE and the Federal Employee Health Benefit Program (FEHBP), and keeping the difference to add to their profits. This practice of "spread pricing" was examined in a detailed Fortune magazine article entitled "Painful Prescription."

Solutions

At the federal level, Congress should enact bipartisan legislation to do three things:

  1. Increase transparency to allow a pharmacy to know how its individual maximum allowable cost (MAC) reimbursement rates for multisource generic drugs would be determined (but not those of other pharmacies in that particular health plan's pharmacy network).

  2. Ensure pharmacy reimbursement from PBMs is updated to keep pace with actual market costs and preserve patient access.

  3. Create a defined appeals process for pharmacies to challenge the PBM reimbursement when it would result in a financial loss.

A recent survey by Penn, Schoen and Berland found overwhelming public support for generic pricing transparency and Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa) have introduced H.R. 244, The MAC Transparency Act, to implement these principles.

These issues were discussed by Congressman Collins at a 2015 hearing of the House Judiciary Subcommittee on Regulatory Reform, Commercial and Antitrust Law that explored the relationship between PBM corporations and independent community pharmacies.

Twenty-five states have enacted legislation comparable to H.R. 244.

Click here to read real-world examples of the egregious prescription drug losses that threaten the viability of small business community pharmacies and forced some out of business altogether.

Take Action:

Consumers:

Urge your Members of Congress to support increased transparency in generic drug pricing and to preserve your pharmacy access by ensuring fair pharmacy reimbursement.

Pharmacists:

Engage your patients in the Fight4Rx grassroots advocacy network at www.fight4rx.org.

Share your support for #communitypharmacy. Follow NCPA on social media:

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Urge your Members of Congress to support H.R. 244

Generic Drug Losses Unsustainable for Independent Community Pharmacies

The National Community Pharmacists Association surveyed 700 community pharmacists. In the survey respondents cited many problems with patient access to medication and significant losses on filling prescriptions. In addition to the survey, independent pharmacies routinely share their egregious examples with NCPA. These include:

  • We are on the brink to fail after 83 years. We cannot pay our bills. Too many Rxs we are losing money on.

  • Digoxin tabs-went from 15/90 to 90/90 many seniors use the med. Donut hole costs go up 800%

  • We routinely lose hundreds of dollars when prices spike 500-1000% for several months.

  • MEPERIDINE 100MG TABS PRICE INCREASE TOOK EFFECT 5 MONTHS AGO—I ABSORBED A $120 LOSS ON FIVE OCCAISIONS BEFORE I TOLD THE PATIENT I COULDNT CONTINUE TO EAT THE LOSS. HE IS NO LONGER TAKING THE DRUG—OTHER STORES IN TOWN "CAN'T GET THE PRODUCT", IE, WON'T STOCK IT FOR HIM

  • Cash patients that no longer take their digoxin due to price

  • We had several patients who have left without their heart pill.

  • Desonide ointment 0.05%—patient could no longer afford the over 100 dollar price increase

  • Hydroxychloroquine...patients went without, MDs furious

  • I have witnessed numerous patients choose not to pay for Doxycycline capsules due to the cost.

  • Doxycycline 100mg may prescriptions unfilled or had to have doctor change prescription

  • Clomipramine 50 and 75mg increased $500 each for a patient, we provided the care. PBM refused to retroactively increase our reimbursement. $1000 loss each month for us

  • Carbamazepine 200mg tablet 2077% cost increase caused a significant out of pocket increase to the customer which caused them to go without medication for 2 weeks until their check showed up.

  • methylphenidate er 20mg tabs. Dispensed partial rx and remainder of medication had increased in price by $600. Lost $500 on that Rx

  • These huge jumps are putting people in the ["donut hole" or Medicare coverage] gap faster

  • Divalproic acid ER raised over 2000% in price. Patient went without medication because copy was too high. Accepted risk of increased seizure activity without drug.

  • A patient had a prescription for carac for skin cancer and could not afford it due to the spike in price.

  • 84 year old man had his Enalapril quadruple in price. Physician would not change medication due to its efficacy. Patient did not get his heart medicine refilled.

  • We have lost over $1000 in the last two months filling prescriptions for enoxaparin injections

  • Home bound patients having to wait until meds can be changed

  • Enalapril price increase has made many senior patients not get their medications

  • With the spike in amitriptyline prices, I've had a handful of patients stop taking it due to increased cost. These are most Medicare D patients.

  • CATARACT SURGERY PATIENT UNABLE TO AFFORD PREDNISOLONE 1% COPAY, HAD TO DELAY SURGERY

  • Elderly lady came into the pharmacy after cataract surgery, could not afford the eye drops on her insurance, she was post-op and risked loss of eyesight without medication

  • demeclocycline 150mg lost over $500 on one fill

  • .leflunomide, which is used to halt the progression of rheumatoid arthritis, lost $474.49 on one fill

  • The antipsychotic aripiprazole, lost $318.97 on one fill

  • duloxetine, which treats major depression, anxiety disorder, and chronic pain, lost $258.69 on one fill

  • benzoyl peroxide/erythromycin topical gel, which treats acne, lost $248.37 on one fill

  • A 90 year old pharmacy in Pennsylvania reported losing $575 on 6 boxes of 10 generic 150 mg Lovenox injection