NCPA Urges Corporate Payors to Ask Pointed Questions of PBMs

Ken Rankin
Published Online: Wednesday, September 1, 2004

Suggesting that some pharmacy benefit managers (PBMs) are engaging in questionable practices that drive up the cost of prescription medicine, officials at the National Community Pharmacists Association (NCPA) are urging corporate health benefit managers to ask some pointed questions of their PBMs.

"Some PBMs realize hidden profits by employing a practice known as ?differential or spread pricing'"?a scheme under which the PBM collects Average Wholesale Price (AWP) minus 15% for drugs but pays participating pharmacists only AWP minus 18%, NCPA said. The PBM then "pockets the 3 percent differential."

NCPA advised benefit managers to demand full disclosure of contract terms imposed on community pharmacies to ensure that the PBM is not skimming a hidden discount.

The association is also urging corporate health benefit managers to determine whether their PBM is the target of any lawsuit or investigation because of their business practices.

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