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"To Preserve, Protect and Promote

the Interests of Pharmacy Owners."

September 2019
In This Issue
Welcome New
PFOA Members
Pharmhealth Express Pharmacy
Abingdon, VA
Encino Medical Pharmacy
Encino, CA
Champion Pharmacy & Wellness
Bridgeport, WV
Key Pharmacy & Wellness
Morgantown, WV
Four Seasons Pharmacy
Buena Park, CA
Medicine Shoppe 2120
Pacific, MO
Medicine Shoppe 2151
Kansas City, KS
Rx 2 You
Lehigh Acres, FL
Newton Falls Pharmacy
Newton Falls, OH
Champion Discount Pharmacy
Warren, OH
Windham Pharmacy
Windham, OH
Good Rxs Pharmacy
Bradenton, FL
Apex Care Pharmacy 1
St Petersburg, FL
RxAll Pharmacy
Los Angeles, CA
 In Response to Stakeholder Concerns, USP Postpones Official Dates

After NCPA, IACP, and APhA expressed concerns with United States Pharmacopeia Chapters <795> and <797>, the organization has announced it is postponing until further notice the official dates of the new chapters, as well as <825>. Specifically, NCPA asked that USP reconsider beyond-use dating language in Chapter <797> because it would impede patient access to medically necessary compounded medications since pharmacists would not be permitted to extend BUDs even when direct scientific testing supports an extension. USP is a private organization that develops health and safety standards often adopted by state and federal regulators.
USP <800> will still go into effect Dec. 1, 2019. 

If you have questions about how this may affect you, contact your local board of pharmacy.
 DEA to Hold Next Drug Take-Back Day 
on October 26, 2019

DEA has announced another opportunity for consumers to dispose of unneeded and expired prescription drugs during the next
DEA National Prescription Drug Take-Back Day on Saturday, October 26, 2019, from 10 am to 2 pm. On this day, thousands of collection sites will be available across the country to accept unneeded and expired prescription drugs, including CS, for safe and legal disposal. Since 2010, DEA has held 17 National Take-Back Days, and has collected and disposed of a total of 5,908.2 tons (11.8 million pounds) of these medications.
In addition to take-back day programs, there are many permanent disposal kiosks located throughout the country that can be used to dispose of unwanted prescription drugs at any time during the year.
NABP's Drug Disposal Locator Tool , available on NABP's new consumer website, , is continually updated with new locations. By entering a zip code or city and state, consumers can find the nearest disposal sites on a map. More than 8,000 disposal sites nationwide can be found within the system.
 DEA to Slash Opioid Production

The DEA is proposing to reduce the amount of five Schedule II opioid controlled substances that can be manufactured in the U.S.
In its Notice of Proposed Rulemaking, DEA proposes to reduce the amount of oxymorphone (Opana) produced by 55%, fentanyl by 31%, hydrocodone (Vicodin) by 19%, hydromorphone (Dilaudid) by 25%, and oxycodone (Oxycontin) by 9%.
Combined with morphine, the proposed quota would be a 53% decrease in the amount of allowable production of these opioids since 2016.
The five opioids that are being cut were subject to special scrutiny after the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities (SUPPORT) Act was enacted last year, the agency said. SUPPORT requires DEA to "estimate the amount of diversion of the covered substance that occurs in the United States" and "make appropriate quota reductions."
While it is cutting opioid production, DEA is proposing to increase the amount of marijuana that can be produced for research from 2,450 kilograms to 3,200 kilograms-almost triple the amount produced in 2018. 
By Christine Blank
Updated Medicare Plan Finder is Up and Running
CMS has launched a redesigned Medicare Plan Finder to help its 60 million beneficiaries shop and compare Medicare Advantage and Part D plans. The new plan finder, updated for the first time in a decade, walks users through the Medicare Advantage and Part D enrollment process from start to finish and allows people to view and compare many of the supplemental benefits that Medicare Advantage plans offer. The updated plan finder also provides beneficiaries and their caregivers with a personalized experience through a mobile-friendly and easy-to-read design that will help them learn about different options and select coverage that best meets their health needs.
In 2019, CMS added nearly 600 Medicare Advantage plans with average premiums declining to their lowest levels in six years. Over the past three years, average Part D basic premiums have decreased by 13.5 percent, from $34.70 in 2017 to a projected $30 in 2020. Open enrollment begins Oct. 15. 
FFF Offers Flu Vaccine Posters at No Charge 
PFOA vendor partner, FFF Enterprises understands the importance of communicating the value of getting vaccinated with your patients. They are offering new flu resource posters at no charge for your stores.
Flu posters are available in English, Spanish, Mandarin, Tagalog, Japanese, Korean and Vietnamese.
to download posters. 
CDC Offers Health Care Professionals
Free Toolkit for Fighting Influenza
As flu season begins in the US, Centers for Disease Control and Prevention (CDC) has launched its 2019-20 HCP Fight Flu Toolkit . This free toolkit is designed to equip health care professionals (HCP) to make strong influenza vaccine recommendations, facilitate productive conversations with patients, and improve influenza vaccination rates.

The materials provided with the toolkit include a
pharmacist guide and talking points as well as fact sheets, slide decks, handouts, email templates, and more. In addition to the HCP Fight Flu Toolkit, CDC also provides a Communication Resource Center on its website.
FDA to Allow One-Year Enforcement Discretion on DSCSA Requirement

T he FDA granted enforcement discretion for one year regarding an upcoming requirement under the Drug Supply Chain Security Act that necessitates wholesale distributors verify a pharmaceutical product's serial number with a manufacturer before accepting a saleable return from a pharmacy. This requirement was slated to go into effect starting Nov. 27, 2019. For the past few months, NCPA has communicated to members the importance of this requirement under the DSCSA. After industry concerns that these verifications processes may not be ready by November 2019, NCPA sent a letter to the FDA requesting enforcement discretion of that requirement so the industry can have time to work out any issues with verification systems. In response to industry concerns and NCPA's letter, the FDA will allow enforcement discretion of the verification requirement for one year. NCPA hopes that this enforcement discretion will give the industry time to work out the kinks with verification systems to ensure a smooth process for the return of saleable product under the DSCSA.
NABP Launches New Consumer Website
NABP is pleased to announce the launch of as an NABP-branded site featuring consumer-oriented information on September 4, 2019. Consumers will find information on how to use medication safely, find permanent drug disposal locations, prevent and identify prescription drug abuse, and use the boards of pharmacy and pharmacists as a resource. This week, NABP is also launching its 2019 consumer education campaign, which focuses on the Association's locator tool for permanent prescription drug disposal sites. The campaign will include television and radio public service announcements, online banner display ads, and video ads.
 PFOA Board of Directors Officer Election Results
The PFOA Board of Directors recently met via webinar to elect the Board Officers for 2019-2020.
PFOA Board:
President - Todd Pendergraft
Vice President - Doug Coyle
Secretary - Phillip Rigsby
Treasurer - Larry McIntosh
PFOA MS Board:
President - Doug Coyle
Vice President - Gabriel Guijarro
Secretary - Dave Cole
Treasurer - Phillip Rigsby
PFOA MC Board:
President - Eric Pusey
Secretary - Gene Windom
Treasurer - Bobbie Barbrey
PFOA logo
Board of Directors

Todd Pendergraft

Vice President:
 Doug Coyle

    Larry McIntosh

Phil Rigsby

Gabriel Guijarro

 Eric Pusey

David Spence

Ty Stout
John Zuzack

Non-Voting Board Members:

Dirk Andrepont

Gaye Moseman

Board of Directors

 Doug Coyle

Vice President:
Gabriel Guijarro
David Cole
Phil Rigsby
Board of Directors
Eric Pusey
Bobbie Barbrey

Gene Windom
PFOA Staff
Contact Information 
David Mayper
Executive Director
April Adkin
Administrative Assistant
954-340-5944 x138

Mailing Address
2900 N. University Drive
Suite 70
Coral Springs, FL 33065 

Wesley Behar
West Region Sales

Ronda Hubbard  
Generics Specialist/Sales
Fax: 270-632-4206

Patrick Kittoe
Southeast Sales
Al Schuster
Northeast Sales
Bob Sutton
Vendor Programs/Mid-West Sales
Nancy Tataronis
Vendor Relations/Marketing
  Jamie Wilbanks
Inside Sales/Service
Toll Free: 888-406-7467
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Pharmacy Franchisees and Owners Assn
(FPN) Federation of Pharmacy Networks
       (NCPDP) National Council for Prescription Drug Programs  
        (NCPA)  National Community Pharmacists Association 

(NABP) National Association of
Boards of Pharmacy

(NASPA) National Alliance of State Pharmacy Associations

  Pharmacist E-Link   

Dave Mayper
The PFOA Board of Directors recently met via webcast and elected this year's Board Officers. Congratulations to Todd Pendergraft, Doug Coyle, Larry McIntosh and Phil Rigsby. Congratulations also to the board officers of PFOA MS and PFOA MC.
PFOA continues to make progress on all fronts and will hold a Vendor Committee Webcast and Phone Conference on Wednesday, September 25th.
Bob Sutton and I continue with the development of our transition program to track buying and selling independent pharmacies. We will hold a steering committee meeting for the transition program on Friday, September 27th. This committee consists of former and present business owners as well as staff.
Progress continues on our new PFOA website. This includes a Members Only section. We ask that you register to view the categories in this section including vendor videos and rebate information exclusive to your store. Registration information has been delivered from to the email address provided.
In October, we are scheduled to participate in NCPA's annual meeting in San Diego. If any of our members plan to attend this meeting and want a private consultation with PFOA, please let us know.
September marks my ninth year as PFOA's Executive Director. I appreciate the board affording me the honor and opportunity. It has been challenging and rewarding. I look forward to the continued opportunity to work with the association as our members face the continuing challenges presented by being on the front lines of the health care industry. 

Yours Truly,
David Mayper
State of the Industry: Pharmacy Navigates Choppy Waters

These should be the best of times for pharmacists. With a growing aging population acquiring complex chronic diseases and a shortage of primary care physicians, pharmacists are in the best position to provide an array of clinical services, such as medication therapy management.
Moreover, a growing number of states are granting pharmacists the authority to perform more clinical services, and even prescribe certain medications. Pharmacists are in a position to seize more opportunities to practice at the top of their license.
Yet, low reimbursement rates for products, DIR fees, increased competition, escalating drug costs and employment issues are threatening to hamstring the progress pharmacists have advocated for and accrued over the past few decades.
Pharmacy advocacy groups have been focused on reforming DIR fees, but the Centers for Medicare and Medicaid Services omitted DIR fee reform from its Final Rule relating to Medicare Advantage and Part D plans. This omission came even though CMS had acknowledged that DIR fees on pharmacies participating in Part D grew by 45,000% between 2010 and 2017.
Lucinda Maine, executive vice president and CEO of the American Association of Colleges of Pharmacy,
National Community Pharmacists Association CEO Doug Hoey said that roughly 5% of retail pharmacies have closed in the last few years. "Pharmacy DIR fees have gotten completely out of hand." He also said that employment cuts are partially a reflection of efforts to cut operational costs as revenue is taking a hit from PBM contracts and generics deflation.
Independent pharmacists also are concerned about the current reimbursement landscape, according to Brian Nightengale, senior vice president of community and specialty pharmacy at AmerisourceBergen and president of Good Neighbor Pharmacy, the company's network of more than 5,000 independent community pharmacies.
Nightengale said pharmacy, especially community pharmacy, is facing the challenges of shrinking and uncertain reimbursement for the dispensing of medications. He argued that a different reimbursement model is crucial, and all parties realize that the current model is not sustainable.
Another complication in addressing reimbursement has much to do with "closed networks," according to Alvarez, who said they are problematic for pharmacies that want to participate because PBMs work with one entity and they reduce the fees to that entity in exchange for more patients or increased volume.
"But, the fees are so low that a company now has to figure out a way to dispense these medications at this lower cost," he said. "They start to reduce their staff to be able to meet that new metric, or new reimbursement model."
Opportunities for MTM, Collaboration
Among the potential ways to offset decreased reimbursement is legislation that reimburses pharmacists fairly for managing a patient's medication regimen, as well as collaborating with other healthcare providers, Alvarez said.
To be sure, pharmacists' involvement in MTM helps to ensure patients' adherence and their health, but it also reduces healthcare costs.
Despite the daunting challenges, experts are optimistic about the future of pharmacy.
Indeed, many pharmacy experts and those in academia agree that collaborative practice agreements between pharmacists and physicians and a team approach will expand, enabling pharmacists to utilize their expertise and retailers to maximize pharmacy going forward.
Expanding Capabilities
Randy McDonough, owner of Towncrest Pharmacy in Iowa City, Iowa, and a board trustee at the American Pharmacists Association, believes that state protocols under which pharmacists can prescribe such drugs as oral contraception and naloxone for opioid overdoses are good examples of how pharmacists already are working collaboratively with healthcare providers to care for patients. He foresees the real value of pharmacists as taking on the role of interventionists.
So how will pharmacists, who collaborate to improve patients' outcomes, get paid?
Nightengale insisted on a dual path. One path would be for the reimbursement for the prescription and the dispensing of that prescription that is fair and adequate to cover the costs.
NCPA's Hoey said the future of pharmacy not only is in continuing to battle for fair product reimbursement, but in providing more services and also attaining service revenue as evidenced by the Community Pharmacy Enhanced Services Network, or CPESN, which NCPA launched two years ago with Community Care of North Carolina.

The goal of these local networks of pharmacies is to help reduce healthcare costs for employers, while ensuring pharmacists get paid for providing services that enhance patient care.
Sandra Leal, SinfonĂ­aRx CEO and the American Pharmacists Association's 2020-2021 president-elect, said she was excited about recent progress pharmacists have made, especially those who are working within service-based models that are starting to see the growth in value-based models. She also said that headway has been made on state-level provider status, increasing scopes of practice and new opportunities to leverage technology and pharmacogenomics to optimize medication use and to be vital players on the healthcare team.
Hoey was optimistic, albeit a bit cautious when he said that DIR fee reform will come to pass, but even getting that done will not constitute a panacea. "Even when the DIR fees get eventually fixed, that's not the end of the story. There's going to be pricing pressure. That's why it's important that the revenue is diversified, so it's not only the dispensing of the product, which is imperative, but also the services are vitally important," he said. "These are challenging times we're confronting, but it's not the first time pharmacy has had challenging times."
By Sandra Levy, Published in Drug Store News (edited)
Surescripts Terminates Contract with ReMy Health, Hindering Pillpack's Access to Patient Prescription Data

Electronic prescribing company Surescripts has terminated its contract with ReMy Health, claiming new allegations about the startup's fraudulent behavior.
The move has serious repercussions for Amazon's online pharmacy PillPack.
PillPack used ReMy Health, a third-party data intermediary, to access patient medication history data collected by Surescripts. With limited methods to obtain patient medication history information, PillPack may have to manually collect the data by contacting patients and doctors.
"PillPack is hopeful we can work directly with Surescripts, the only commercial clearinghouse for comprehensive medication history in the U.S.," Jacquelyn Miller, a PillPack spokeswoman, told FierceHealthcare.
Having to rely on patients to accurately remember all the medications they are taking could lead to errors, PillPack says. Miller referenced a quote from Surescripts executive Paul Uhrig in a recent Politico article: "Before Surescripts, if you went to your physicians' office, they wouldn't know what meds you were on, necessarily. They would ask you (and) rely on a patient's memory, which is sometimes faulty, right?"
"We agree with a top Surescripts officer that 'rely(ing) on a patient's memory ... is sometimes faulty,' and hope that Surescripts wants patients and their pharmacies to have the most accurate information available to improve patient care," Miller said.
Surescripts, owned by PillPack competitors CVS Health and pharmacy benefit manager Express Scripts, manages about 80% of U.S. prescriptions, according to the company's data. In its antitrust case against Surescripts, the Federal Trade Commission (FTC) claims Surescripts has maintained at least a 95% share over many years. The FTC filed a lawsuit against the company for "illegally monopolizing the e-prescribing market."
The dispute over access to patient medication data stems from Surescripts' allegations about fraudulent behavior by ReMy Health. Surescripts now claims that ReMy Health's "improper activities" go deeper than it first thought. The company first alleged back in July that ReMy Health provided one or more of its customers, such as PillPack, unauthorized access to Surescripts' health information network.
As a result of Surescripts' ongoing investigation into ReMy Health, "the evidence shows that the fraud extended to tens of thousands of requests for patient health insurance and prescription price information, which ReMy Health provided to websites that market specific medications to consumers," Surescripts CEO Tom Skelton said in a statement.
At least some of ReMy Health's requests for patient health information included National Provider Identifier (NPI) numbers for physicians who had no relationship to the patient, Surescripts alleges. NPIs are unique numbers issued to physicians, pharmacies and other healthcare providers that allow networks like Surescripts and providers receiving requests for protected health information to know who is asking for the sensitive health information.
These actions were not a HIPAA violation, Surescripts said, and there's no evidence that pharmaceutical companies knew the data access violated its network policies. There also was no harm to patients, Surescripts added.
"The volume of ReMy Health's activity on the network was very small, but fraudulent behavior of any kind cannot be tolerated," Skelton said.
Aaron Crittenden, ReMy Health president and CEO, said in a statement that Surescripts' allegations are "completely unfounded," and the company has "always acted in full compliance with our contracts with Surescripts."
"We have never provided any data from the Surescripts network to pharmaceutical companies for marketing purposes. ReMy Health expedites patient access to medications at reduced costs, but reduced costs do not mean less security," Crittenden said. "We only transmit data for uses authorized by the patient and securing that data has always been and remains our top priority."
"ReMy Health is working to make health care more affordable, more available, and that should not be a threatening proposition to anyone," Crittenden said.
In July, Surescripts said it was barring ReMy Health from accessing its patient prescription data and was in the process of turning the matter over to the FBI. Surescripts said ReMy did not take any action to address the alleged fraud despite being given a 30-day period to address the situation.
Terminating the contract with ReMy Health was necessary to maintain the integrity of the Surescripts network, the e-prescribing company said. "At a time when patients are already skeptical of the healthcare industry's ability to protect their sensitive data, we are taking steps to protect it on behalf of patients and the people who care for them," Skelton said.
By Heather Landi, Published in Fierce Healthcare 
What to Expect from the EPA's New Hazardous Waste 
Disposal Rule

A number of states have taken enforcement actions against retailers that have not been compliant when returning pharmaceuticals in recent years. For example, California has penalized several national retail chains for not fully complying with regulations.
Previously, disposing of hazardous pharmaceutical waste was a complicated practice for national retailers with locations in multiple states, as states have taken various positions on how Resource Conservation and Recovery Act regulations apply.
Enter a new rule from the Environmental Protection Agency. Known as Management Standards for Hazardous Waste Pharmaceuticals, it clarifies the regulatory process of pharmaceutical disposal methods by ensuring the proper management of unused and/or expired pharmaceuticals through the process of reverse distribution or final disposal.
The standards will push retailers to restructure their hazardous waste management practices. Entities that fail to comply with the ruling will face significant penalties, including monetary fines that have increased in recent years.
Defining Hazardous Waste
According to the EPA, hazardous waste is "waste with properties that make it dangerous or capable of having a harmful effect on human health or the environment." Hazardous wastes have ignitable, corrosive, reactive or toxic characteristics.
Common types of hazardous waste pharmaceuticals that may be found in your location include, but are not limited to aerosols, insulin, multivitamins, some blood-thinning medications and some Drug Enforcement Administration controlled substances.
Key Changes for Drug Stores
The rule was created to address concerns identified by nationwide retailers dealing with compliance challenges for hazardous waste pharmaceuticals in their stores.
While the final rule does not increase the number of pharmaceuticals considered hazardous, it does include many changes that will impact retailers, including:
  • "Sewering" practice: The rule states that reducing intentional sewer disposal is one way to help reduce the environmental loading of pharmaceuticals into waterways. Sewer disposal refers to the age-old method of disposing medications down the drain or toilet, which causes these hazardous materials to end up in the environment;
  • Relief for management: Under the new rule, hazardous waste pharmaceuticals do not count toward generator status. It also eases labeling and manifesting, and clarifies what items can be shipped to reverse distributors;
  • Nicotine patches, gums and lozenges: Over-the-counter nicotine replacement therapies no longer are considered hazardous when discarded. However, e-cigarettes still are considered an acute hazardous waste and are subject to the new requirements; and
  • Management clarity: The rule clarifies the regulatory status of reverse distribution - the process for returning unused pharmaceuticals accumulated during the course of normal operations. During this process, drugs that are not dispensed are handed off to specialized brokers or the manufacturers.
This final rule establishes streamlined, practical standards for managing potentially creditable hazardous waste pharmaceuticals. It will reduce regulatory burden on retailers and align with the existing practices of the retail sector.
The rule will go into effect in Alaska, Iowa and Puerto Rico on Aug. 21, and other states will have until 2021 or 2022 to adopt the new rule.

Pharmaceutical retailers can avoid penalties by enlisting the help of a third-party hazardous waste disposal partner. These professionals serve as trained personnel and also may be a consultant for updated insight into compliance standards.
For additional information, visit
By Wade Scheel, Published in Drug Store News
Spread Pricing: From Largely Unknown to Much Scrutinized and Criticized
If some lawmakers have their way, PBMs will no longer be able to play the spread. A small but growing number of states are scrutinizing the role that PBMs play in their Medicaid programs amid reports that these middlemen are unfairly siphoning off profits. More recently, U.S. senators have taken up what seems to be a bipartisan cause. The ranking members of the Senate Finance Committee have introduced a bill that would put an end to what is known as spread pricing in Medicaid programs throughout the country.
Spread pricing is the difference between the amount a PBM pays to a pharmacy when a prescription is purchased and what it turns around and charges their clients, typically employers, for that prescription.
Like so much else involving health care prices, especially pharmaceutical prices, spread pricing used to be of interest only to a handful of insiders. Perhaps fewer still understood it.
How spread pricing works
Step 1: The pharmacy buys the prescription from a wholesaler or distributor for a certain amount-say, $10.
Step 2: When a person uses insurance coverage to buy a prescription, the PBM pays the pharmacy a certain amount-say, $12. The pharmacy makes $2 on the transaction. In terms of how the money flows, this is the same as the reimbursement insurers make to doctors or hospitals after they provide a service.
Step 3: The PBM also turns around and bills the payer (the employer or a state Medicaid program if it is a Medicaid PBM) for that prescription. Say it bills for $20. The PBM pockets that $8 difference.
The result: The $8 difference between what the PBM paid the pharmacy ($12) and the amount it billed the payer ($20) is the spread.
But a widely publicized audit in Ohio uncovered numbers that stunned state officials from April 2017 through March 2018, CVS Caremark and UnitedHealth's OptumRx PBMs reaped more than $223 million-and made an 8.8% profit-by overcharging Medicaid managed care plans, underpaying pharmacies, and pocketing the difference. For some, the disclosure was an epiphany.
"Spread pricing has become an epidemic," says Antonio Ciaccia, who heads government and public affairs at the Ohio Pharmacists Association, which pushed state officials to audit PBMs. It's used predominantly in the pricing of generic drugs, notes Ciaccia, "so it hurts everyone, because payers rely heavily on declining generic prices to offset added costs of brand-name drugs. This practice is inflating costs."
Other states are taking note of what happened in Ohio.
In New York, a recent state Senate committee report urged state officials to audit Medicaid managed care organizations and recommended several measures to improve state oversight. At the same time, the committee report also indicated PBMs should be forced to become more transparent about pricing and accept a fiduciary responsibility to lower drug costs, among other things.
In Massachusetts, a report by the Health Policy Com-mission, the state agency charged with reining in the state's health care costs, found overcharging by PBMs and that the markup for some drugs was nearly $16 above a generally accepted benchmark.
Earlier this year, Andy Beshear, the Kentucky attorney general, opened a probe into allegations that PBMs over-charged the state's Medicaid program and discriminated against independent pharmacies. A recent report by the Kentucky Cabinet for Health and Family Services found that, in 2018, PBMs were paid $858 million, of which they kept $123.5 million, or 13%, up from 9.4% in 2017. And late last year, the Pennsylvania auditor general noted that the state paid $2.86 billion to PBMs for Medicaid enrollees in 2017, double the $1.41 billion it paid in 2013. But what was unclear is how much was profit for PBMs versus the actual cost of providing service, so the auditor general recommended that Pennsylvania pass laws that would, among other changes, require flat-fee pricing for compensating PBMs.
"People understand formularies and rebates, but the idea a PBM makes money on each prescription-by charging a state more than it pays pharmacies-doesn't fit with a narrative of bringing value and reducing prices, which is how PBMs advertise themselves," says Walid Gellad, an associate professor of medicine and head of the Center for Pharmaceutical Policy and Prescribing at the University of Pittsburgh.
A spokesman for the Pharmaceutical Care and Management Association, a PBM trade group, says that spread pricing is "not an outlier practice" within the drug supply chain and is used by other entities-manufacturers, hospitals, wholesalers, and pharmacies. Moreover, the health plan hiring a PBM "always has the final say on contract terms," he says. "PBMs don't choose spread pricing contracts."
So far, those arguments don't seem to be doing much to deflect the criticism of spread pricing and efforts to rein it in.
CMS is getting into the act. In May 2019, it released guidance to help the states monitor the practice. CMS noted some managed care organizations are not accurately reporting spread pricing from PBMs when they calculate the medical-loss ratio to meet the requirement that at least 85% of all of a managed care plan's revenue is spent on actual care.
Meanwhile, Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee, and Grassley have asked the HHS inspector general to conduct a federal-level analysis of PBM practices across state Medicaid programs.
Back in Ohio, the legislature moved to cut out managed care plans and contract directly with a single PBM to administer drug benefits. The state's attorney general has filed a lawsuit against OptumRx for overcharging the state.
"There's been such a huge focus on PBMs and the role they play in pricing and spending," says Gellad. "Unless something changes, I don't see how spread pricing does not remain an issue."
By Ed Silverman Published in MANAGEDCAREMAG.COM (edited)