Arkansas Pharmacists Say PBM Reimbursement Continues to Plummet in 2018

Hundreds of Arkansas pharmacists convened at the Arkansas Health Insurance Marketplace Oversight Subcommittee to discuss how they are being reimbursed well below cost for many prescriptions, according to a report from ArkansasOnline.

These cuts in reimbursements from pharmacy benefit managers (PBMs) may threaten to put pharmacies out of business, according to the report.

“This is a catastrophic event and cannot continue as a successful business model,” Cissy Clark, pharmacist and pharmacy owner, told ArkansasOnline.

The report noted that the issue arose on January 1, 2018, when a pricing model change related to Arkansas Blue Cross and Blue Shield’s (BCBS) contract with CVS Caremark took effect.

During the committee meeting, Scott Pace, CEO of the Arkansas Pharmacists Association, said chain pharmacies have been reimbursed an average of $4 lower that what the pharmacy paid since the change, as reported by ArkansasOnline.

Another pharmacy said they were reimbursed lower than cost for 58% of their generic prescriptions in January compared with only 3% in December, a dramatic change, according to the article.

Pace noted in the ArkansasOnline report that other health plans have already been reimbursing pharmacies at a very low rate, but the reimbursement for Arkansas BCBS plans took a hit because the plans are more common.

"This is a crisis, and it's not just a crisis that's affecting independent pharmacies," Pace said during the meeting, as reported by ArkansasOnline. "It's also a crisis that's affecting chains."

An Arkansas BCBS spokesperson told ArkansasOnline that they were responding to pressure to reduce premiums and are unaware of the rate Caremark reimburses pharmacies.

However, Domenico Gugliuzza, vice president of finance and analytics for CVS Caremark, said during the meeting that the PBM also loses money on some prescriptions. Gugliuzza cited that the company profited on 18% of Arkansas prescriptions, lost money on 9%, and broke even on the rest in 2018, according to the article.

This reimbursement changes also affected Arkansas Works, in which state and federal funds are used to cover private plans for individuals who are eligible for Medicaid under expansion, according to ArkansasOnline. These plans are offered on HealthCare.gov as well.

Pace suggested to the committee that transferring the pharmacy benefit for Arkansas Works from private to traditional Medicaid programs may mitigate these issues pharmacies are facing, according to the article.

"It's time for Arkansas to lead the nation in comprehensive oversight of the pharmacy benefit managers," Pace said, as reported by ArkansasOnline.

Many pharmacies have previously banded together to call for increased transparency of PBMs and their practice of charging retroactive direct and indirect remuneration fees, which put the businesses well below their cost.