Independent pharmacies break through on PBMs

ALEXANDRIA, Va. – Constant efforts by independent pharmacy stakeholders have unleashed a “tidal wave” of activity to reform pharmacy benefit managers, says Matthew Seiler, general counsel for the National Community Pharmacists Association. 

In June, the Federal Trade Commission announced it would initiate a formal study of PBM behavior and the Senate Committee on Commerce, Science and Transportation voted to advance the Pharmacy Benefit Manager Transparency Act introduced May 24 by Sens. Maria Cantwell, D-Wash., and Chuck Grassley, R-Iowa. 

“There’s a bipartisan realization of the negative impact that PBMs are having on the market,” Seiler said. “It’s hard for people to fully understand. Members are being reimbursed below cost, and costs and co-pays are going up. That leads to pharmacy deserts in the case of under-reimbursement and, when patient copays go up, their adherence decreases, and comorbidities rise.” 

For years, PBMs have been squeezing independent pharmacies through DIR fees – various price concessions required to participate in Medicare Part D, often assessed and retroactively clawed back. In 2017 alone, those fees totaled $4 billion. PBMs are also inflating prescription drug costs for seniors, says Seiler. 

Also in June, the NCPA and the American Pharmacists Association voluntarily dismissed a lawsuit after CMS agreed to redefine the definition of DIR fees and bring some resolution to the issue of retroactive fees, says Seiler. 

“We have a lot more work to do, but that’s a step in the right direction,” he said. 

That work includes continuing to tell the story of what is happening with PBMs, says Seiler, including how they try to make up for the loss of retroactive fees. 

“What we’re seeing now are new contracts threatening the viability of the industry,” he said. “(They are offering) below wholesale reimbursement with minimal to no administrative or service fees. I can only think they are doing it to push independent pharmacies out of the market.”