NCPA Applauds Rep. Weiner for Introducing Bill to Rein in Pharmacy Benefit Manager Practices That Hurt Patients, Plan Sponsors and Community Pharmacies

Alexandria, Va. - May 06, 2010

 

The National Community Pharmacists Association today endorsed H.R. 5234, the PBM Audit Reform and Transparency Act of 2010, which would aim to reduce health care costs by requiring greater transparency of pharmacy benefit managers (PBM)—the largely unaccountable giant prescription drug plan administrators, such as CVS Caremark, Express Scripts, Inc. and Medco Health Solutions, Inc. 

Introduced by U.S. Representative Anthony Weiner (D-N.Y.), H.R. 5234 would limit ownership conflicts of interest, discourage abusive pharmacy auditing practices, and require greater PBM disclosure with patients and plan sponsors. 

"This legislation would begin to rein in many of the dubious and opaque PBM practices that pad their burgeoning profits at the expense of patients, plan sponsors and local pharmacists," said Joseph H. Harmison, PD, NCPA president and pharmacy owner in Arlington, TX. "If this bill is enacted, PBMs would find it much harder to pad profits through hidden costs, to steer patients away from their pharmacy of choice and towards PBM mail order pharmacies and to punitively audit pharmacies. Ultimately, this proposal’s about fixing the complex, broken system that PBMs have put in place to make billions of dollars while leaving patients and health plan sponsors paying the bill and scratching their heads." 

Harmison added, "NCPA wants to personally thank Representative Weiner for his strong leadership on this issue. We hope the House takes up this important bill this year, and that their Senate counterparts act with a similar sense of urgency." 

PBMs have transformed themselves from simple claim processors to mammoth drug middlemen who operate with virtual impunity due to a lack of both transparency and regulation. Some of the largest PBMs enjoyed a fivefold increase in profitsover the past decade. To fuel record profits, PBMs collect rebates from drug manufacturers for favoring certain drugs over others, but do not share them equitably with patients or plan sponsors. PBMs also require or strongly encourage patients to leave their community pharmacy for PBM-owned mail order pharmacies, even in cases when the resulting cost is higher to the health plan. 

Recently, states have begun to more closely regulate PBMs and have secured more than $300 million in compensation to settle lawsuits filed by state attorneys general. H.R. 5234 offers a regulatory framework at the federal level with provisions requiring PBMs to:

  • Disclose to plan sponsors in an annual report the number/total cost of prescriptions under the contract filled at mail and retail; aggregate average payments under the contract per prescription made to mail and retail and average amount per prescription the PBM received; overall percentage of generics dispensed at mail and retail; and percentage and number of cases patients where switched to a more costly drug.

  • Identify sources for maximum allowable cost (MAC) pricing and reimbursement benchmarks and update weekly; follow prompt pay provisions (consistent with the Medicare Part D prescription benefit); and be non-discriminatory regarding pharmacy network participation. 

  • Cease ownership conflicts of interest by preventing PBMs from mandating that patients use a specific pharmacy (retail, mail, specialty) if the PBM has an ownership interest in that pharmacy (or vice versa); and prohibit the offering of incentives to encourage patients to use only the PBM-owned pharmacy. 

  • Give pharmacies a 15-day prior notice of audits; offer a written appeals process; limit the audit period to one year; and disclose audit recoupment to the plan sponsor. 

  • Protect patients by placing restrictions on the sale/utilization of claims data and other patient information.

The National Community Pharmacists Association (NCPA®) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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