Independent Community Pharmacists Document Underpayment for Generic Drugs by Secretive PBM Corporations

PRESS RELEASE ALEXANDRIA, Va. (July 20, 2015) —

The National Community Pharmacists Association(NCPA) has compiled new evidence to further substantiate the need for federal sunshine legislation (

H.R. 244, the MAC Transparency Act)

for more insight into below-cost reimbursements from PBM (pharmacy benefit manager) corporations that do not keep pace with rising market costs for generic prescription drugs.

NCPA recently asked its members for examples detailing the costs they incurred to acquire drugs versus the reimbursement they received when they filled the prescriptions. To date 130 pharmacies representing 105 Congressional districts in 35 states responded. NCPA staff will share examples with members of the U.S. House of Representatives to underscore this pressing issue and garner more support for H.R. 244, hopefully leading to the introduction of a companion bill in the U.S. Senate. H.R. 244 would help address this problem by

requiring PBMs to update their generic benchmarks every seven days and increasing transparency into generic drug transactions by PBM corporations.

“Independent community pharmacies should not be consistently underpaid for the products and services they offer,” said NCPA CEO B. Douglas Hoey, RPh, MBA. “Unfortunately, the ‘buy high-sell low’ dynamic has regrettably become commonplace for these small business health providers, who absorb financial losses for many generic drugs because PBM corporations do not disclose reimbursement benchmarks to either pharmacies or the plan sponsors who hire them, and fail to react adequately to acquisition costs that can soar by as much as 1,000 percent, virtually overnight.”

Hoey added, “Without greater transparency and timely updates from PBM corporations, independent community pharmacies will be forced make tough decisions that do not benefit their patients. These include no longer dispensing certain generic drugs to avoid such losses or cutting staff or hours or even closing their business altogether. Something has to give because the status quo is unsustainable.”

What follows are a few of the most egregious examples recently provided by NCPA member pharmacies:

• On June 5th a patient was given leflunomide, which is used to halt the progression of rheumatoid arthritis. The pharmacy’s acquisition cost was $492.17 and the PBM reimbursement was $17.68, which is difference of $474.49.
• On May 29th the antipsychotic aripiprazole was given to a patient. The pharmacy’s acquisition cost was $416.25 and the PBM reimbursement was $97.28, which is a difference of $318.97.
• On June 1st a patient was given duloxetine, which treats major depression, anxiety disorder, and chronic pain. The pharmacy’s acquisition cost was $339.87 and the PBM reimbursement was $81.28, which is a difference of $258.69.
• On May 30th a patient was given benzoyl peroxide/erythromycin topical gel, which treats acne. The pharmacy’s acquisition cost was $311.07 and the PBM reimbursement was $62.70, which is a difference of$248.37.
• One pharmacy sent in five consecutive months (November 2014 to March 2015) of claims regarding Exemestane, which is used to treat breast cancer for the wife of one of the pharmacy owners. Eventually the prescription was transferred to a chain pharmacy. The acquisition cost each month was $256.60, and the average reimbursement was $76.33, which means average difference was $180.27.
• A nationwide network of independent community pharmacies sent out a call to its members to provide examples. They compiled 9,599 claims from June 15-16. In every instance the pharmacy’s acquisition cost exceeded their reimbursements from the PBMs.

These claims follow a recent NCPA member survey on this issue, which showed the generic drug reimbursement discrepancies have gotten worse. Separately, an AARP Public Policy Institute report also concluded that prices have increased substantially for a number generic drugs.