By Michael Rule
Stacey Swartz, owner of the Neighborhood Pharmacy of Del Ray in Alexandria, VA, and George Garmer, owner of Halethorpe Pharmacy in Baltimore, MD, recently took time out of their busy schedules to brief Congressional staffers on the importance of passing H.R. 244, the MAC Transparency Act, and H.R. 793/S. 1190, the Ensuring Seniors Access to Local Pharmacies Act.
In her comments, Ms. Swartz focused her attention on problems with MAC pricing and the need to enact H.R. 244. H.R. 244 would require pharmacy benefit managers (PBMs) to update their maximum allowable cost (MAC) pricing lists at least once every seven days for federal health programs (Medicare, TRICARE, and the Federal Employee Health Benefit Program (FEHBP)). A MAC is the most a PBM will reimburse a pharmacy for dispensing the vast majority of generic medications. Unfortunately, lags in updating these lists result in many prescriptions being filled at a financial loss to the pharmacy.
In fact, these losses are sometimes as high as $100 or more for a single prescription.
H.R. 244 would also establish a uniform appeals process for independent pharmacy owners when they are reimbursed below cost. Ms. Swartz explained the necessity of this provision through slides. One slide showed what she submits to the PBM with the next showing the PBM response. In all cases, the PBM denied the appeal claiming she could have purchased the medication at a cheaper rate. But, as she noted, she works with two primary wholesalers and several other secondary wholesalers who did not have access to this cheaper rate, nor did the PBM disclose to her the product and/or source used in making this determination.
This is problematic because, as Ms. Swartz stated, the PBMs are not only her business partners as they are responsible for reimbursement the cost of medications she dispenses to insured customers, but they are also her competitors. PBMs may own retail chains and/or mail order facilities that compete directly with her. If she is unable to serve her patients, their proprietary businesses stand to benefit.
Following Ms. Swartz’s remarks on MAC, Mr. Garmer spoke to the need to pass H.R. 793/S. 1190, the Ensuring Seniors Access to Local Pharmacies Act, which would allow any pharmacy that is willing to accept “preferred pharmacy” contractual terms and conditions the opportunity to participate as such in Medicare drug plans. Currently drug plans cherry pick which pharmacies are able to offer “preferred” pricing to patients by excluding certain pharmacies from the opportunity to participate in preferred networks.
“Preferred networks are preferred by those who created them,” stated Mr. Garmer. But, he observed, when patients are given a choice most choose the care of an independent pharmacist because they see value in the in long term relationships with pharmacists who know them well. He noted these long term relationships between patients and pharmacists lead to improved patient outcomes which, in turn, reduces overall health care costs. Unfortunately, restrictive “preferred” pharmacy networks jeopardize these relationships and positive outcomes.
Finally, he touched on the recent events in Baltimore, his home town. He mentioned how one of the large chains spent the week after the riots deciding whether they would reopen their burned out store, while the Department of Health and Mental Hygiene turned to independent pharmacies with help for home delivery of medications. Moreover, the independent pharmacies that had been looted got their stores back in order and went back to the business of caring for the community.
We appreciate the time Ms. Swartz and Mr. Garmer dedicated to provide their perspectives on these key issues and that of the Congressional staff in attendance.
We urge all independent community pharmacists to take a moment and make their voice heard and to tell their story to their own elected officials. Visit NCPA’s Legislative Action Center for resources on ho to do so.