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 other Friday.

Let the Sun Shine In | NCPA Executive Update | February 9, 2018

by NCPA | Feb 09, 2018

Dear Colleague,

Doug Hoey

"Sunshine is the best disinfectant."

No doubt you've heard that before. Most of us have heard it all our lives, to the point that's a cliché. But sometimes, clichés are spot-on.

Payers have always pushed to see how low they can go, but lately, based on reactions from pharmacy owners across the country, it seems they have gone too far, and a critical mass of pharmacy owners have had enough. All over the country, they're seizing the moment and going to the media and legislators to shed light on PBM practices that threaten their patients and their businesses.

Call it a perfect storm.

The clouds began to form back in the fall, when some PBMs made severe and arbitrary reimbursement cuts in many of the Medicaid Managed Care plans they administer ("A Coincidence That May Not Be a Coincidence," Executive Update, Jan. 19.) Then, on the heels of that, they began sending conveniently timed letters to pharmacy owners expressing interest in buying their pharmacy. (Have you received such a solicitation? If so, please send it to us.)

NCPA and state partners pressed the Centers for Medicare and Medicaid Services and state Medicaid agencies and legislators. It's been a "two-steps-forward, one-step-back" sort of thing. While we've heard news from a few states that CVS/Caremark is rolling back its reimbursements to pre-October levels, those reinstatements have been spotty. It's been reported to us that while some product reimbursements were increased, others were decreased, making the overall reimbursement even worse.

In the midst of that ongoing PBM squeeze play, the flu epidemic has hit with a vengeance. A whopping 88 percent of respondents to a recent NCPA survey said they've experienced multiple underwater reimbursements on generic Tamiflu in the past 60 days. In order to take care of your patients, many of you dispense this crucial flu-treatment medication at a loss. ("Payments That Give You Fever and Chills," Executive Update, Jan. 26.)

And it's not just oseltamivir. Every day, on a range of medications, PBMs are increasingly paying pharmacists below their acquisition cost. In this recent emergency, it's the most vulnerable populations — Medicaid patients — who may be harmed the most, but all patients stand to lose if this continues.

Medicaid gets funding from both state and federal governments, but the federal government gives a great amount of latitude to the states to run their MMC programs. NCPA has reached out to CMS providing data and seeking help, but their oversight of state managed care plans is limited. As a result, the battle over this recent crisis is largely in the states. In Arkansas last week, 250 pharmacists crowded into a hearing room (and spilled out into the hallway) to tell state legislators what is happening in pharmacies across the state. The stories were vivid, and in some cases, shocking, to those who needed to hear and understand the abuses that are taking place — legislators and consumers.

These pharmacists sacrificed their time and convenience to make the trip to Little Rock to educate lawmakers. It was a coordinated effort, led by the Arkansas Pharmacists Association, that created the opportunity for Arkansas pharmacists to share the truth with legislators. The PBM representatives seemed shell-shocked. Perhaps that was because the reimbursements are unexplainable – especially in light of the examples of the pricing "spread" being charged to state-paid plans. The testimonies at the hearing and the outpouring of Arkansas pharmacists were so effective that yesterday, Arkansas Attorney General Leslie Rutledge announced that she has demanded information from CVS/Caremark after reviewing complaints of plummeting reimbursement rates paid to local pharmacies.

Last month, at a hearing before a Kentucky Senate committee, there was another "disinfecting" moment. Community pharmacists in Kentucky are also being squeezed by MMC organizations with reimbursements that appear to be less than NADAC, so a bill has been introduced that would carve the prescription drug benefit out of MMC in that state. An independent pharmacist told the committee about his experiences with low reimbursement in MMC and told them that after months of it, he received an "ever wonder what your pharmacy is worth?" letter from CVS/Caremark. "This is a clear demonstration of the motives of PBMs," he testified. Read the hearing testimony here.

Kentucky legislators seemed to agree. "Kentucky's Medicaid Commissioner informed me that Kentucky independent pharmacists are paid an average 85-cent dispensing fee for the managed care population," Republican Sen. Max Wise said. "At those rates, many, if not most, Kentucky independent pharmacies will close within a year." Meanwhile, the managed care organizations receive a $25 administrative fee for each pharmacy claim.

The same thing is happening in Ohio, New Mexico, Pennsylvania, Maryland, and other states, too. Community pharmacists are taking their stories — and the actual facts — to policymakers. They're taking time away from their businesses to bring the practices of the shady middlemen into the bright sunlight.

And the good news: policymakers are listening.

This movement must continue in every statehouse in the country. It's time for action. There's another cliché that works here: "Just Do It." NCPA and its state governmental affairs team are supporting action taking place in the states.

It's happening now. NCPA members are making a difference. Let the sun shine in!

Doug Hoey