NCPA Backs Generic Drug Payment Legislation

January 12, 2015

Bipartisan legislation recently introduced, and endorsed today by the National Community Pharmacists Association , would help prevent community pharmacists from being collateral damage as some generic drug prices spike dramatically but federal health plan reimbursements fail to keep pace.

PRESS RELEASE

ALEXANDRIA, Va. (Jan. 12, 2015) — Bipartisan legislation recently introduced, and endorsed today by the National Community Pharmacists Association (NCPA), would help prevent community pharmacists from being collateral damage as some generic drug prices spike dramatically but federal health plan reimbursements fail to keep pace. H.R. 244, The MAC Transparency Act, introduced byReps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa), would address a serious problem in Medicare Part D, the military’s TRICARE program and the Federal Employees Health Benefits Program (FEHB) that threatens patient access to local pharmacies.

Community pharmacists routinely incur losses of approximately $100 or more on many prescriptions because insurance middlemen, known as pharmacy benefit managers (PBMs), reimburse pharmacies well below their cost to acquire and dispense generic prescription drugs that have skyrocketed in price. The PBMs may wait weeks or months to update the reimbursement benchmarks they use to compensate pharmacies while drug prices increase virtually overnight. This situation jeopardizes pharmacists’ ability to continue to serve patients because it leaves community pharmacies with unsustainable losses.

“Buy high and sell low is no prescription to stay in business but, far too often, it’s exactly what these PBMs have asked pharmacists to do,” said NCPA CEO B. Douglas Hoey, RPh, MBA. “For PBMs to wait weeks or months, in this era of instant communication, to update reimbursement to pharmacies is simply indefensible. We strongly support the efforts of Reps. Collins and Loebsack to forge a bipartisan solution to this issue to preserve patient access to pharmacies.”

H.R. 244 would:

  • Preserve pharmacy access for patients — The bill would require PBMs to update their “maximum allowable cost” (MAC) benchmarks every seven days to better reflect market costs and allow pharmacists to know the source by which PBMs set reimbursement for his or her community pharmacy.
  • Give patients greater choice of pharmacy — Patients would not be forced by PBMs to use a PBM-owned pharmacy – an obvious conflict of interest. According to Medicare data, PBM-owned mail order pharmacies may charge plans more — as much as 83 percent more – to fill prescriptions than community pharmacies.

A recent U.S. Senate hearing illustrated the magnitude of this problem. Independent community pharmacy owner Rob Frankil of Sellersville Pharmacy in Sellersville, Pa., testified and vividly described the impact on pharmacies and patients of surging prices and lagging reimbursement.

The Centers for Medicare &Medicaid Services (CMS), in acknowledgement of NCPA’s concerns, issued a final rule in May 2014 for Medicare Part D that brings more transparency to generic pricing and requires price updates every seven days starting in 2016. H.R. 244 would codify that reform and expand it to additional government programs. Sixteen states have enacted bipartisan legislation comparable to H.R. 244.

Hoey added, “We urge the U.S. Congress to act. The provisions in H.R. 244 are reasonable and will simply allow pharmacists to devote more of their energy to doing what they do best — helping patients maximize their health outcomes.”

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The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of nearly 23,000 independent community pharmacies. Together they represent an $88.8 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 300,000 individuals, including over 62,000 pharmacists. To learn more go to www.ncpanet.org or read NCPA’s blog, The Dose, at http://ncpanet.wordpress.com/