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NCPA turns spotlight on underpayment for generics

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ALEXANDRIA, Va. — The National Community Pharmacists Association said it has compiled evidence that underscores the need for federal sunshine legislation to provide more insight into below-cost reimbursements from pharmacy benefit managers that don’t keep pace with rising market costs for generic drugs.

pharmacy-2NCPA said Monday that it recently asked members for examples illustrating 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 — have responded. Some of the most egregious examples, the association said, include the following:

• On June 5, a patient was given leflunomide, used to halt the progression of rheumatoid arthritis. The pharmacy’s acquisition cost was $492.17, and the PBM reimbursement was $17.68, a shortfall of $474.49.

• On June 1, 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, a difference of $258.69.

• On May 30, 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, a shortfall of $248.37.

• On May 29, the antipsychotic drug aripiprazole was given to a patient. The pharmacy’s acquisition cost was $416.25, and the PBM reimbursement was $97.28, a difference of $318.97.

• Another pharmacy sent in five straight months (November 2014 to March 2015) of claims regarding exemestane, which was 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 the average loss was $180.27.

• A nationwide network of independent community pharmacies sent out a call to its members to provide examples of below-cost reimbursements. The network compiled 9,599 claims from June 15 to 16. In each instance, the pharmacy’s acquisition cost exceeded their reimbursements from the PBMs.

“Independent community pharmacies should not be consistently underpaid for the products and services they offer,” NCPA chief executive officer B. Douglas Hoey said in a statement. “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%, virtually overnight.”

NCPA said its staff will share underpayment examples with members of the U.S. House of Representatives to garner more support for the MAC Transparency Act (H.R. 244) and potentially lead to the introduction of a companion bill in the Senate. H.R. 244 would require PBMs to update their generic drug benchmarks every seven days and increase transparency into generic drug transactions by PBMs, according to the association.

“Without greater transparency and timely updates from PBM corporations, independent community pharmacies will be forced make tough decisions that do not benefit their patients,” Hoey added. “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.”

NCPA noted that the latest underpayment claims follow a recent NCPA member survey on this issue, which showed that generic drug reimbursement discrepancies have become worse. In addition, an AARP Public Policy Institute report also concluded that prices have increased substantially for a number generics, NCPA said.


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