“Arkansas, Ohio and other states are now investigating CVS Caremark, a large, nationwide pharmacy benefit manager (PBM), for practices they believe overcharge state taxpayers for prescriptions filled by their own CVS pharmacies and reimburse other community pharmacies for less than the cost of prescription drugs they buy while keeping the price differential,” said Patricia Epple, CEO Pennsylvania Pharmacists Association. “They and other PBMs have also imposed a ‘gag order’ in their contracts with pharmacies that prevents pharmacists from advising patients when there are options for their prescriptions costing less.”
“In Arkansas, CVS Pharmacies were found to be reimbursed $400.65 for a drug used to manage pain by CVS Caremark, while community pharmacists were given $75.74-- an almost $325 difference,” said Patrick Lavella, Manager of Pharmacy Compliance for Value Drug Company.
“Here in Pennsylvania, CVS Caremark has steadily and systematically cut the reimbursement rates for prescription drugs dispensed by community pharmacies since January 2017,” said Lavella. “In one example, CVS Caremark dropped the reimbursement rate for a drug commonly prescribed to treat lung infections from $665 in July last year to just $128 in November-- $250 below the cost of the medication for the community pharmacy to purchase.”
“We are not cherry-picking examples either,” said Lavella. “I can show you many dozens more.”
“Pharmacy records also show that even when pharmacies were paid more than their direct cost to purchase, that amount was often only in the range of one penny to two dollars, far below the overall cost to provide the service,” said Lavella. “This difference between what the pharmacies are paid and what the PBM bills the insurer is called the spread and it is a critical reason why this investigation is needed. The Commonwealth has the right to know how much of these Medicaid dollars designed to go to patients and the pharmacies that serve those patients, that CVS/Caremark actually retained.”
“After CVS Caremark reduced prescription reimbursements all year for our community pharmacies, they began to get letters from CVS/pharmacy in September asking pharmacists if they want to sell their businesses,” said Lavella. “This same thing happened to pharmacies all over Pennsylvania and in Arkansas, Ohio and across the country.”
“By the end of January 2018, CVS/Caremark has reinstated slightly better rates but not across the board proving they know those prices were incorrect. But they have REFUSED to allow pharmacies to rebill and correct those other prescriptions,” said Lavella.
Other practices by pharmacy benefit managers are also hitting prescription patients where it hurts-- in the pocketbook.
“PBMs require community pharmacies to sign contracts to get reimbursements for the prescriptions drugs they provide to Medicaid and other patients or they can’t serve them,” said Angela Zaydon, Government Affairs Manager for the Pennsylvania Pharmacists Association. “These take-it-or-leave it contracts contain a ‘gag order’ clause that prevents pharmacists from telling patients how to reduce their out-of-pocket costs for prescription drugs.
“The typical example is simple-- a pharmacist runs a prescription sale through the system and sees a patient’s copay is $40. But, the pharmacist knows if the patient did not use their insurance the same drug would cost them $18.99 out-of-pocket,” said Zaydon. “The ‘gag order’ clause in the PBM’s contract prohibits the pharmacist from telling patients they could save money-- even if they ask.
“We know this happens all too frequently because we hear about it from pharmacists across the Commonwealth. But, they are afraid to speak out individually because they fear retribution,” added Zaydon.
“Community pharmacists and the bipartisan Legislative Community Pharmacy Caucus are calling on Auditor General Eugene DePasquale and Attorney General Josh Shapiro to investigate these practices in Pennsylvania, like other states have done, in hopes of getting a better deal for taxpayers and to level the playing field for community pharmacies across the state,” said Epple. “We want to thank Sen. Tom McGarrigle and Representatives Seth Grove and Robert Matzie for requesting these investigations.”
“We have also asked the General Assembly to adopt changes in law that would stop these costly practices and prevent them from happening in the future,” said Epple. “We want to thank Sen. Richard Alloway for introducing Senate Bill 1105 and Rep. Doyle Heffley for introducing House Bill 2212 that address the reimbursement issues and Sen. Ryan Aument for introducing Senate Bill 1110 and Rep. Judy Ward for House Bill 2211 that address the “gag order” clause issue.”
“We look forward to working with the General Assembly, the Auditor General, the Attorney General and the Department of Human Services on these issues,” said Epple.
Click on these links for copies of letters to Attorney General Josh Shapiro and Auditor General Eugene DePasquale.
Click Here for a video of the rally.
Click Here for a video of the rally.
Auditor General DePasquale
Auditor General Eugene DePasquale Monday told members of the Pennsylvania Pharmacists Association that he will look into concerns that inequitable pharmacy reimbursements might be increasing prescription drug costs for consumers.
“For seniors and many other Pennsylvanians, prescription drugs are a big part of their health care costs,” DePasquale said. “I will do everything within my authority to help hold down the cost of health care because it is the right thing to do.
“In the coming weeks, I will be meeting with all of the parties involved, including the Community Pharmacy Caucus in the General Assembly, to gather additional information on this topic before I move forward."
For more information and copies of the letters by Sen. Tom McGarrigle and Representatives Seth Grove and Robert Matzie requesting these investigations, visit the Pennsylvania Pharmacists Association website at: www.papharmacists.com.
News Coverage From PA, Other States On These Issues:
