By Michael Rule
During recent testimony before the Florida House Health Innovation Subcommittee, a representative for Express Scripts, the nation’s largest Pharmacy Benefits Manager (PBM), testified that there are 2,000 brand name drugs with no generic alternative, subject to maximum allowable costs (MAC) pricing. (Video available here, Express Scripts Testimony Starts at the 59:40 mark)
This seems to contradict his own defense of MAC pricing in which he gave a hypothetical example of “maybe“ nine drugs being available for high cholesterol. Under his explanation, MAC pricing exists to encourage pharmacies or their purchasing agents to purchase the lowest priced medication available. Following this example, he spoke in opposition to the way maximum allowable cost was defined, which is the upper limit or maximum amount that an insurer or managed care plan will pay for generic drugs or brand name prescription drugs with available generic versions. If, as he says, the purpose of MAC pricing is to incentivize the acquisition of the lowest priced product, what is wrong with this definition? He opposed this definition because of the 2,000 brand name drugs on the Express Scripts master formulary that are subject to MAC pricing. In essence he undermined his own argument that MACs exist to encourage pharmacies to purchase the lowest cost medication available. How can they do so when they have only one option?
While pharmacies may have only one option in purchasing many of these medications, the reimbursement is solely set by the PBMs, necessitating additional scrutiny of MAC pricing by both state legislatures and the United States Congress to provide some transparency into how PBMs designate medications for the MAC list and ultimately to ensure payments to pharmacies keep pace with market conditions.
Please click here to send an email to your Member of Congress urging support for H.R. 244, the MAC Transparency Act, which would force PBMs to update their MAC reimbursements at least once every seven days. Click here for more information.