Our friends at NCPA are making great progress in their never-ending efforts to advocate for the independent pharmacy industry. In this newsletter from NCPA’s CEO, Doug Hoey, they are highlighting some great work done with the Arkansas Pharmacists Association (APA) in the battle against Pharmacy Benefit Managers (PBMs). Great job, Arkansas!
Sometimes it’s hard to believe your own eyes.
That had to be the reaction from many in the room at a press conference held by the Arkansas Pharmacists Association this week when they heard of a $484 difference between what a Caremark-administered plan paid a community pharmacy for a 30-day supply of aripiprazole versus what it paid itself!
For years, community pharmacists have suspected that chains, especially CVS/Caremark (since it is a price giver and a price taker as a PBM and drugstore chain), are reimbursed more for prescriptions than community pharmacies are. The example shared with Arkansas legislators, patients, and pharmacies this week was eye-popping even as it verified our suspicions, and mind-boggling for the legislators and patients in the room who, directly or indirectly, are paying that whopping difference.
The aripiprazole example wasn’t an outlier, either. Scott Pace, the APA Executive Vice-President, and CEO held up a folder with 270 more examples of self-dealing. On average, he said, those examples showed a difference of over $60 more per prescription being paid to CVS than was being paid to community pharmacies!
So far, there is no word from Caremark on these payment discrepancies. And, no word from other mega-PBMs so far suggesting that they don’t follow the same practices.
Arkansas has an active state association, very active pharmacist members, and has historically been very politically active, making sure to sustain relationships with their local legislators. Couple those strengths with the extreme payment cuts to local pharmacies and this new information about inflated payments to out-of-state competitors, and you have a firestorm.
Local news stations covered the press conference, and the entire event was posted on Facebook. The governor has called a special session, and Arkansas Attorney General Leslie Rutledge is investigating the low reimbursement rates:
“The change in reimbursement rates by the Pharmacy Benefit Managers has hurt Arkansans in every community across the state,” said Attorney General Rutledge. “Local pharmacists are critical members of Arkansas’s communities. Due to these changes, pharmacists are facing tough decisions because the reimbursements do not cover the actual cost of the medications. When public health is threatened, all Arkansans suffer.”
Even before these latest examples, evidence has been piling up indicating that PBMs are contributing to the increasing costs of prescription drugs rather than saving their customers (employers and local, state, and federal governments) money. I’ve written here about this issue a couple of times already this year (Jan. 19, “A Coincidence That May Not Be a Coincidence,” and Feb. 9, “Let the Sun Shine In”). These revelations coming out of Arkansas show a proverbial henhouse that is being raided rather than guarded.
The payment discrepancy information revealed at this week’s press conference will reverberate through many state houses. It looks to any reasonable person that local pharmacies are being forced to subsidize higher payments to CVS pharmacies. Couple that with solicitations from CVS to buy the same pharmacies they are reimbursing below the cost of the drug, and it paints an ugly picture that should be of great interest to federal and state legislators and regulators.
Arkansas isn’t the only state where pharmacies—at least community pharmacies—are seeing extreme cuts in prescription reimbursements and are responding with legislative action. In fact, almost every state has introduced PBM legislation this year. The new, specific information about the yawning gaps between payments to community pharmacies and to CVS should make those statehouse debates even more compelling.
Pharmacists in Arkansas have joined hands and raised their voices. If you have been quietly rooting your own state on, now is the time to stand up, take part, and open the eyes of your state officials.
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