For independent pharmacies, 2024 began with bated breath. There were concerns regarding reimbursements, particularly in Medicare Part D with the new DIR rule taking effect and concerns regarding low reimbursements at the point of sale while at the same time having to withstand retroactive recoupments from 2023 reimbursements.
At the same time there was optimism regarding potential action surrounding PBM reform at the federal level as well as possible state reforms.
Fast forward to the end of March and conditions have proven difficult for independent pharmacies in Part D, but new and unexpected challenges have arisen – including PBMs integrating discount cards/programs aggressively for insured beneficiaries, bringing back the emergence of PBMs clawing back point-of-sale patient cost shares.
At the federal level, there was talk of some semblance of PBM reform being included in a funding package. What that would have looked like is not entirely clear, though it was anticipated that it may include some of the solutions proposed by the Senate Finance Committee in the Medicare Part D market as well as Congressman Carter’s Medicaid managed care reform. Inclusion of PBM reforms in the commercial market was a subject of significant discussion in light of unintended or intended concerns surrounding preemption of state PBM laws and regulations. Ultimately, no such package was included in Q1 federal funding efforts.
As previously elaborated on in past updates and APCI’s 2024 Convention, while there are a large number of PBM bills at the federal level and APCI is supportive of many of the bills, the reality is that there is not much currently pending at the federal level that will keep independent pharmacy doors open and/or stop unfair PBM practices as to independent pharmacies and their patients.
APCI’s goal is pursue the introduction of legislation (or inclusion of language in existing legislation) that protects independent pharmacies and their patients from unfair PBM practices in federal health programs. The backbone of such legislation should include:
- Take away the ability of PBMs to set drug prices by moving to a transparent and sustainable reimbursement model for independent pharmacies in federal health programs utilizing NADAC + a fair dispensing fee.
- Take away the ability of PBMs to create networks including broad networks, narrow networks, and preferred networks.
- Prohibit patient steering to PBM owned or affiliated pharmacies including mail order and specialty pharmacies.
- Prohibit PBMs from charging pharmacies point of sale or retroactive fees, prohibit post adjudication recoupments, and tying the reimbursement of a drug to an outcome, score, or metric.
- Protect patients from paying cost share based on gross prices and prohibit PBMs from mandating expensive brand name drugs when there is a cheaper generic available.
- Strengthening NADAC.
- Imposing strong enforcement and criminal penalties for PBMs that violate the law.
While APCI engages with existing legislation and routinely offers expert input and guidance, much of APCI’s federal efforts focuses on the foregoing pillars of strong and necessary PBM reform.
At the state level, APCI offers varied levels of support, but the first quarter has brought a storm of activity with some wonderful results and some disappointing results as well. Please read below for more details on what APCI has been up to on the legislative front.
APCI’s Greg Reybold on Podcast forecasting PBM reform in 2024
Greg Reybold joined PUTT CEO Monique Whitney and NY independent pharmacy owner and pharmacy leader Steve Moore on the Pharmacy Podcast Network to discuss PBM reform in 2024.
APCI’s Greg Reybold featured on Podcast talking transparent PBMs
Greg Reybold again joined PUTT CEO Monique Whitney to discuss transparent PBMs with Joe Shields. Joe Shields is CEO of Transparency-RX, a coalition of PBMs that are committed to PBM reform and transparency.
APCI sends letter to U.S. House Oversight Committee staff re HR 6283
APCI sent a letter to the House Oversight Committee staff in connection with the Committee’s consideration of HR 6283. The bill was reported favorably to the full House. In its comments, APCI thanked the Committee for its attention to PBM reform and offered technical feedback on HR 6283 with regard to strengthening delinking provisions, and protecting against inadvertent preemption of stronger state laws. APCI also emphasized the need for legislation to require fair and transparent payment to independent pharmacies.
APCI meets with the FTC on large PBM practices
In February APCI met with members of the FTC 6(b) team to discuss unfair practices by large PBMs that have a negative impact on drug prices, patients, and independent pharmacies including integrating discount cards into pharmacy benefits.
APCI attends The Hill Event: Prescribing PBM Reform
The February Hill event, sponsored by Transparency-Rx featured Congressman Comer, Congressman Auchincloss, and Antonio Ciaccia, amongst others. This event was a great opportunity to meet and talk PBM reform with members of Congress, key staffers, and other stake holders. APCI’s Greg Reybold was in attendance along with APCI’s Hill team from Arent Fox, Dan Sjostedt and Cissy Jackson. Below is a photo from the event of Dan Sjostedt talking with Congressman Auchincloss.
APCI Meets with Staff Members for Representatives Comer and Auchincloss
While in D.C., the APCI team talked PBM reform with Congressman Comer’s staff as well as Congressman Auchincloss’ staff. The conversations were packed with substance regarding existing PBM legislation, evolving practices of large PBMs and the benefits of a transparent and fair reimbursement model for independent pharmacies.
Big win for independent pharmacy in Kentucky and APCI’s Cathy Hanna was on the front lines of the fight
Kentucky passed and the Governor signed into law SB 188 positioning Kentucky as a national leader in PBM reform and drug pricing transparency. This bill, introduced by Senator Max Wise, is sweeping in its scope and would, amongst other things, protect patient choice, require a minimum reimbursement equal to NADAC plus a fair professional dispensing fee, and grant the Department of Insurance significant oversight.
As those in Kentucky know, APSC has long been a leader on pharmacy issues at the Capitol thanks to the work of Cathy Hanna and Ralph Bouvette. While Ralph retired prior to the consummation of the APCI/APSC combination, APCI is thrilled to have Cathy join the team and continue her great advocacy work in Kentucky. Cathy Hanna provided support and assistance on SB 188 throughout the session, including providing policy input, assisting with call to actions, and working closely with the Kentucky Pharmacists Association to ensure the bill’s passage. In addition, Cathy continues to engage with the Kentucky Board of Pharmacy in connection with ongoing regulatory initiatives.
Independent Pharmacy swings big in Alabama’s 2024 legislative session but PBM lies win the day – for now
APCI and the Alabama Pharmacy Association teamed up and worked with state representative Phillip Rigsby to introduce the Fair Meds Act (HB238). This bill was one of the most aggressive in the nation and looked to bring drug pricing transparency and fair reimbursement by requiring reimbursement using Alabama Average Acquisition Cost plus a professional dispensing fee, remove ERISA exemptions, strengthen existing patient steering law, provide additional authority to the commissioner of insurance, strengthen the gag clause prohibition, address emerging PBM practices with discount cards, and protect employers with first in the nation language prohibiting PBM data capture practices.
Despite fierce resistance from PBMs, insurers, and others, thanks to the grassroots efforts of Alabama’s independent pharmacists, the Fair Meds Act was passed out of House Insurance Committee after a hearing that saw several pharmacists testify.
Following the hearing, PBM and insurer interests jumped into action, falsely framing the bill as a “tax,” and drumming up fear amongst citizens and employer groups. Unfortunately, this deceitful tactic proved effective, and the bill stalled in the House.
While the legislation itself stalled, APCI expects to see unfair PBM practices scrutinized by the Alabama General Assembly in the months to come and believes this is the beginning, not the end of PBM reform efforts in Alabama.
APCI would like to extend a huge thank you to Alabama Representative Phillip Rigsby, and the independent pharmacists that fought for the Fair Meds Act. We couldn’t be prouder of the way independent pharmacists across the state fought for this legislation.
APCI quoted in AL.com
While there was massive disinformation in connection with the Fair Meds Act in Alabama, APCI worked to help set the record straight including contributing comments to the below article in AL.com
https://www.al.com/news/2024/03/alabama-to-debate-price-of-prescription-drugs-1064-fee-who-pays.html
Bill Eley attends Tennessee Pharmacists Association legislative event
APCI was honored to sponsor the Tennessee Pharmacists Association Political Leadership breakfast. APCI’s Bill Eley was in attendance and got the opportunity to mingle with some of Tennessee’s legislative champions including Tennessee State Senator Shane Reeves (pictured below).
Georgia Independent Pharmacists throw themselves into action
After APCI and GPhA discovered massive payment disparities on commonly prescribed generics between chain pharmacies and independent pharmacies in Georgia’s State Health Benefit Plan as reflected in the below 1 pager, independent pharmacists quickly rallied to the cause responding to calls to action, attending hearings, and inviting legislators to visit their pharmacies.
These disparities were uncovered deep into Georgia’s 2024 legislative session necessitating quick action by GPhA, APCI, and independent pharmacists across the state. This resulted in the passage of SB 198, which requires PBMs administering benefits on behalf of the State Health Benefit Plan to pay independent pharmacies for a drug no less than the average it reimburses chain pharmacies for the same drug. This bill passed the Georgia Senate after 11:00 pm on Sine Die. The bill is now before the Governor for his consideration.
APCI’s Greg Reybold offered testimony several times throughout the legislative session including the final week of legislative session.
In addition to the passage of SB 198, APCI and GPhA worked on several initiatives which made their way into the state budget. These include:
- $6 million allocated to funding a $3 dispensing fee for independent pharmacies for the next year. This dispensing fee is to be administered by a PBM that is willing to act as a fiduciary and has no ownership or affiliation with a pharmacy or an insurer.
- An actuarial study to review potential savings to the state by moving to a NADAC plus model in the Georgia State Health Benefit Plan.
- A bump from a $10.64 dispensing fee to an $11.50 dispensing fee in Medicaid managed care for independent pharmacies that fill fewer than 65,000 scripts a year.
Advocacy front and center at APCI convention
Two of the Saturday sessions at the 2024 APCI Annual Convention focused on advocacy. The morning kicked off with a panel discussion moderated by Greg Reybold with Georgia state representative and pharmacist Ron Stephens, Georgia pharmacy attorney Scott Bass, Antonio Ciaccia, and APCI’s Cathy Hanna.
In addition, the Saturday programming closed out the day with members hearing the latest on the federal and state fronts from Antonio Ciaccia and Greg Reybold.