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.

Some year-end wins to celebrate | NCPA Executive Update | December 14, 2018

by NCPA | Dec 14, 2018

Dear Colleague,

Doug Hoey

For pharmacy owner and NCPA member Eric Pusey, this past Wednesday was just a typical day. Oh, except for that press conference Pennsylvania Auditor General Eugene A. DePasquale held in his pharmacy.

Pusey is a past president of the Pennsylvania Pharmacists Association and owner of Medicap Pharmacy in Olyphant, Pa. (The auditor general also visited two other pharmacies: Royer Pharmacy and Hartzell's Pharmacy.) DePasquale's report follows a months-long investigation into transparency and accountability in drug pricing. Between 2013 and 2017 prescription drug costs in Pennsylvania went from $1.41 billion to $2.86 billion, an increase of more than 100 percent – and a substantial burden to Pennsylvania taxpayers. In the same time period, the average price of a prescription at a community pharmacy actually went down slightly and prescription volume was flat. So, DePasquale wondered, where did that money go?

NCPA met with DePasquale, who also gathered information through interviews and hearings that included testimony from NCPA's Director of State Government Affairs Matt Magner, PPA Executive Director Pat Epple, and individuals from the Pharmaceutical Care Management Association, which represents the interests of its 17 PBM member corporations.

The result was a report with three major findings:

  • Lack of transparency: PBMs operate with little to no transparency and have expanded beyond their original role as third-party claims administrators.

  • Lack of oversight: No federal or state oversight of the contracts that PBMs require community pharmacists to sign means that some PBMs have been presenting take-it-or-leave-it contracts with unduly restrictive clauses.

  • Reimbursement disparity: Independent pharmacists believe that PBMs are not paying fair prices to reimburse pharmacies for many of the medications they dispense.

The entire report is here, along with a brief taxpayer-targeted video sharing key findings from the special report.

But Pennsylvania was not the only state to have a positive development with respect to PBM oversight. Last weekend, the National Council of Insurance Legislators approved a model PBM regulatory statute. NCOIL is made up of state legislators who serve on their legislature's insurance committees. The model act is just that, a model. It's likely to be an excellent starting point for states to advance patient- and pharmacy-friendly legislation.

This was not the first time NCOIL has considered PBM regulation. NCPA and our state partners have worked for years to advance model legislation. Each time, the draft looked like it was going to be passed but somehow was scuttled.

This year was different. The national and state spotlight we've helped shine on PBM practices has tarnished the white hat that some legislators believed PBMs wore. This time, strong leadership from NCOIL leaders, including Arkansas State Sen. Jason Rapert, New York Assemblyman Kevin Cahill and Texas State Rep. Tom Oliverson, made passage of the model act possible.

But a key reason this finally moved forward was the coordinated effort of community pharmacy. NCPA quarterbacked a coalition of representatives from more than 20 groups, including state associations, state-based industry groups, and buying groups. The odds of success always go up when community pharmacy works together, and this is Exhibit A.

It wasn't easy. PBMs vehemently opposed this model legislation. Here's a quick timeline showing how it played out:

March 2018 (Atlanta meeting)

  • Rapert makes a PBM regulation model bill his top priority.

  • NCOIL asks NCPA, PCMA, and AHIP to provide recommended language for a PBM regulation model bill.

July 2018 (Salt Lake City meeting)

  • The first draft bill, very similar to pro-consumer, pro-pharmacy legislation passed in Arkansas, is presented.

  • NCPA's Vice President for Pharmacy Policy Ronna Hauser and representatives from PCMA and AHIP testify before the NCOIL health committee.

August 2018

  • NCPA organizes a working group to focus on shaping and advocating for the PBM model act. The working group is made up of more than 20 groups, including state associations, other industry organizations, buying groups.

October 2018

  • NCOIL health committee releases a second draft of the PBM model bill that drastically watered down the bill; We recommend amendments.

  • NCOIL subcommittee asks NCPA, AHIP, and PCMA to give their objections or support for the bill.

  • NCOIL committee tables consideration of the flawed second draft.

November 2018

  • NCOIL releases a third and final draft of model bill that largely reflects our priorities.

December 2018 (Oklahoma City meeting)

  • Hauser and NCPA's Vice President, Federal and State Government Affairs Anne Cassity attend the meeting on behalf of NCPA, joining attendees from AIP, IPC, Pharmacist Mutual, OPhA, PPOk, PSSNY, and APA.

  • Hauser again testifies in support, with PCMA and AHIP testifying in opposition.

  • Model bill passes the committee with only one "no" vote (Colorado Assemblywoman Lois Landgraf).

What an extraordinary week in the states this was. With this kind of jump start, we can't wait for 2019!

Doug Hoey