• CVS to Pay a Whopping $285 Million for Overcharging Medicare
• Hoey on How PBMs Broke Bad, Ways to Fix Them
• Month of Action Demonstrate Bipartisan Interest in Community Pharmacy
• Reminder to Review Your Contracts on MDPNP

CVS to Pay a Whopping $285 Million for Overcharging Medicare

In late June, CVS Caremark was ordered to pay the U.S. government at least $95 million in damages for overcharging Medicare for generic drugs between 2010 and 2016. This week, the court decided on the quantity of the penalty. Despite CVS' attempts to manipulate the facts on the ground, the court was clear: CVS had committed "serious" misconduct for financial gain, and that under the False Claims Act, it owed the U.S. government three times the minimum penalty, a total of $285 million.

The court opinion, filed in the United States District Court for the Eastern District of Pennsylvania, found that every argument CVS made to bring the penalty down was faulty, including one contradicted by the company's own damages expert.

Judge Mitchell Goldberg pointed out that CVS must have known it was violating a 2010 rule from the Centers for Medicare & Medicaid Services when it filed over 500 false DIR reports, and that it had even told its shareholders that it knew the rule would hurt its profitability.

"In response, Caremark devised a scheme to earn hidden spread or indirect profit on Part D purchases, and in the process, caused CMS to over-subsidize prescription drug costs to the tune of some $95 million," the judge wrote. "When CMS and other industry participants asked questions, Caremark consistently concealed the true nature of its scheme. ... Caremark's actions cost CMS close to $100 million and made the administration of Medicare Part D—a program aimed at lowering drug costs for a vulnerable population—more difficult."

You can read the whole opinion here.

Hoey on How PBMs Broke Bad, Ways to Fix Them

NCPA CEO Douglas Hoey appeared on the Trusted Pharmacist Podcast this month to discuss how PBMs drive up prescription costs and drive pharmacists out of business. He and the host, NCPA member Steve Hoffart, get into detail about the various ways PBMs siphon funds out of your pockets, manipulate formularies to their financial benefit, and steer patients into mail-order businesses they own.

You can read more about the episode here, and listen here or wherever you get your podcasts.

Month of Action Demonstrate Bipartisan Interest in Community Pharmacy

This week, as part of NCPA's Month of Action initiative, NCPA member Greg McKenna hosted a pair of pharmacy visits on the same day. First, Rep. Joe Courtney (D-Ct.) paid a visit to the pharmacy and discussed key policy priorities. Later in the day, staff for Sen. Chris Murphy (D-Ct.) visited the pharmacy and heard the importance of passing community pharmacy’s legislative priorities, including PBM reforms.

Also this week, Kevin Duane of Panama Pharmacy in Jacksonville, Fla., hosted Rep. John Rutherford. The two spoke at length about the PBM Reform Act (H.R. 4317) as well as the IRA MFP implementation and concerns about having to float those burdensome costs.  And Iva Drug Store in Iva, S.C. hosted Ryan Syrbe, a member of Sen. Tim Scott’s staff, for a pharmacy visit. Scott serves on both the Senate Finance and Health, Education, Labor and Pensions (HELP) committees, which have jurisdiction over most of community pharmacy’s legislative priorities.

These visits are tremendous opportunities to speak with legislators face-to-face and to press the urgent need for action on PBM reform If you have not yet expressed interest in hosting a visit, complete this  interest form and we will follow up with resources to extend an invitation.

We need to continue advocating for key PBM reforms, especially those included in the recently introduced PBM Reform Act (H.R. 4317), particularly those that enhance transparency and ban spread pricing in Medicaid managed care programs and require CMS to define and enforce reasonable and relevant contract terms, including those related to reimbursements, in Medicare Part D.

Click here for additional resources on NCPA’s Month of Action and let us know of your interest in hosting a pharmacy visit by completing this interest form or by emailing Michael Rule at mrule@ncpa.org. In addition to meeting with your legislators face-to-face, click here to contact your Representative and urge them to cosponsor the H.R. 4317. Keep the pressure on Congress to finish the job!

Reminder to Review Your Contracts on MDPNP

A friendly reminder that you should still closely review your contracts with PBMs and plans, and consult with your PSAO if applicable, to see if your PBMs and plans are requiring you to dispense drugs on the Medicare Drug Price Negotiation program. Any such requirement from PBMs and plans will govern, despite CMS stating that they will not require such dispensing in an updated FAQ and letter.

Centers for Medicare & Medicaid Services (CMS) staff delivered a webinar to over 600 members on enrollment in the Medicare Transaction Facilitator (MTF). The webinar can be found here.

You have probably received an email CMS on enrolling in the MTF of the Medicare Drug Price Negotiation Program. If you are going to participate in any Medicare Part D network for next year, you must enroll in the MTF-DM to receive your manufacturer refund payments. We encourage you to become familiar with the process before enrolling. Here are some things to know:

- You can watch an intro to the MTF on CMS' dispenser homepage here.

- You can view a FAQ from CMS on the MTF here.

- You can contact CMS at MFPMedicareTransactionFacilitator@cms.hhs.gov with any questions.

- Before enrollment, you should make sure your NCPDP profile is accurate and updated.

- Before enrollment, pharmacies need to know which functions, such as central pay or reconciliation services, they want to assign to any third-party support entities such as PSAOs or reconciliation vendors.

- During enrollment, pharmacies will need to sign a legal agreement so proceed with caution and be sure to carefully review and have your legal counsel review.

- During enrollment, identify as having "material cashflow concerns," as manufacturers can provide pharmacies with a plan for mitigating their cashflow concerns.

- For NCPA advocacy on the Medicare Drug Price Negotiation Program and the Inflation Reduction Act generally, see here.

There is no hard deadline to complete enrollment, and it will be available after January 2026. Enrollment will take approximately one hour and you will have to provide banking information.

NCPA’s Advocacy Center Update provides a weekly detailed summary of recent and breaking legislative, regulatory, and state developments impacting independent community pharmacy and NCPA’s efforts to affect policies benefitting its membership and the industry. The weekly update is distributed to NCPA leadership, steering committees, allied organizations/stakeholders, and major contributors to the NCPA LDF and PAC. The weekly update is intended exclusively for the recipient and is not for external distribution.