NCPA Executive Update

NCPA Executive Update delivers insights on legislative, regulatory, policy, and industry developments from NCPA CEO B. Douglas Hoey, Pharmacist, MBA, to NCPA members and pharmacy leaders every Friday.

NCPA to CMS: Enforce Your MAC Rule | NCPA Executive Update | April 22, 2016

by NCPA | Apr 22, 2016

Dear Colleague,

Doug Hoey

Slow and low MAC pricing updates is a top member priority, according to NCPA's annual member survey. We think it's important to update you with the latest on this issue as members prepare for next month's NCPA Congressional Pharmacy Summit.

Since Jan. 1, 2016, Medicare has required that Part D plans and PBMs use a standard for pharmacy reimbursement that is updated at least every seven days "to accurately reflect the market price of acquiring the drug." (Emphasis added!) You and I know that this too often is not the case.

So far in 2016, there have been multiple Part D plans and PBMs that have been using MAC drug pricing values that are far below what would be considered to be reasonably approaching market prices for drugs. The results have compromised beneficiary access and harmed pharmacy small business owners.

Part D plans and PBMs are manipulating MAC pricing standards "as a proprietary variable that can be changed on a whim with no relation whatsoever" to real world costs, we wrote in a letter to CMS earlier this month. We called that practice a "blatant disregard" for the federal regulation that "is serving to undermine" the Part D program and "truly jeopardizes the ability of pharmacies to serve these patients." The practice also calls into question the accuracy of drug pricing information beneficiaries rely on via the Plan Finder website.

This follows the familiar pattern of PBM "whack-a-mole" gamesmanship. NCPA has actively supported the efforts of our state partners in passing MAC drug transparency laws in 29 states. But the PBMs are finding ways to avoid complying, such as no longer using the term "MAC" to argue on a technicality that the law doesn't apply. That's why we now are trying to use "generic drug pricing transparency" in legislation when possible. NCPA also is aiding state associations in Arkansas and Iowa that are defending their transparency laws in federal court from PBM industry lawsuits.

We know that CMS says it can't dictate to PBMs the actual reimbursement method they use to reimburse pharmacies, but CMS could—and should—enforce the regulation that exists that classifies MAC as a drug pricing standard and requires updates every seven days to accurately reflect market prices. That would ensure that plan sponsors are indeed in compliance with statutory requirements and maintain Medicare Part D program integrity.

We have recommended to CMS that it further define or provide guidance on what is meant by "the market price of acquiring the drug" and put PBMs on notice that they must be able to verify compliance with this requirement. Plan sponsors and PBMs must be able to demonstrate that MAC values have some correlation or "tie" to the network pharmacy acquisition cost.

We are working with community pharmacy's allies on Capitol Hill to pressure CMS to act in this area and also to finalize long-pending guidance on direct and indirect remuneration (DIR) fees. Compliance with the MAC rule in Part D is just one of the issues that will be front and center at next month's 2016 Congressional Pharmacy Summit May 24-25 in Arlington, Va., just minutes from Reagan National Airport and Washington, D.C.

It's a fact of life that members of Congress are much more likely to act favorably if they can associate an issue with a name and a face of a voter from back home. We hope you can be in attendance to make a strong impression on lawmakers that we need their help. Register before April 27 to reserve a hotel room at a special NCPA rate.

See you then.

Doug Hoey