Last Friday (May 6), Caremark modified its recent invoice submission requirement for bulk drug purchases after considerable pushback from providers and pharmacy associations around the country. The outcry was in response to a provision in Caremark’s January 2022 provider manual that defined a “bulk purchase” as a purchase of more than 30 days of inventory of a particular drug.
Since a pharmacy cannot predict how long a purchased drug will remain in its inventory before a patient needs it, virtually every drug purchase a pharmacy makes would be a “bulk purchase.” Moreover, Caremark initially required that every time a pharmacy “intends” to make a bulk purchase, the pharmacy must first obtain approval from Caremark by submitting a request in writing by postal mail to an address in Arizona and wait for Caremark’s approval of the purchase by return postal mail. In a later wholesale invoice audit, Caremark would be able to recoup any claims for purchases that did not follow this procedure.
The extreme nature of the requirement both confused and outraged pharmacies across the country. After a widespread backlash against the new rule, Caremark modified its definition as follows: “A bulk purchase occurs when a pharmacy chooses to purchase large quantities of a product, or multiple products, to secure volume discounts and hedge against potential product shortages or price increases.” However, it still requires a pharmacy to send notice (email now permitted) to Caremark within 21 days after a bulk purchase and keep record of Caremark’s acknowledgement of receipt of the notice. Though a huge improvement over the original policy, even the revised rule is an unwarranted overreach that should be rescinded entirely.
American Pharmacies has played a vital role in the passage of important wholesale invoice audit protections in Michigan (HB 4348), New Mexico (SB 394) and Texas (HB 1455). Pharmacies would have been protected under these three laws even if Caremark had not modified its bulk purchase requirements.
We thank everyone who complained to Caremark about this egregious policy. And we encourage all states that have not done so to enact common-sense wholesale invoice audit reforms to protect pharmacies against the whims of PBM dictates.