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In This Newsletter
- FTC Hears Testimony on PBM Abuses
- House Bill Targets PBMs in Federal Plans
- Advocacy Call to Action
- Social Media Spotlight
- Quarterly Business Review
- Rx Compass Monthly Results
- ThoughtSpot Roundup
- House Panel Grills PBM Execs
- Webinar on Recouping DIR Fees
- TX Medicaid Surety Bonds
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On Aug. 1, the Federal Trade Commission held an open meeting on its recently released preliminary report on PBM practices.
APRx was part of a broad cross section of Americans affected by abusive PBM practices that provided input to the FTC.
APRx EVP & General Counsel Miguel Rodriguez highlighted several issues for the commission, including diminishing pharmacy access and one-sided non-negotiable contract terms that govern every aspect of a pharmacy’s business, making it nearly impossible for independent pharmacies and their patients to thrive.
"Independent pharmacies can compete any day of the week on service and price if given the opportunity," Rodriguez testified. "However, PBMs have used their market power to eliminate that ability to compete. As a result, the patients in their communities are suffering. I think it is imperative that this complex PBM structure –― this Gordian Knot –― be done as Alexander did –― sliced in half. And the Commission should use its power to do so."
APRx member Ashley Seyfarth of Bloomfield, NM, urged the Commission and CMS to “define reasonable and relevant” in PBM provider contracts.
“You have new contracts coming out for June 2025 now that are way below cost,” Seyfarth said. “If I accept that contract now, there’s a clause in the contract stating that I agree that this is reasonable and relevant reimbursement. Well, I don’t.”
Seyfarth said she is forced to choose between losing a large percentage of her business by refusing to sign PBM contracts or losing money on prescriptions that are not fully reimbursed.
Pharmacists Robin and Joe Craft sold their four pharmacies in Central Ohio to Walgreens in February 2024 after 25 years because underwater reimbursements forced them out, they told the Commission.
“Joe and I invested half our lives, untold amounts of money, and so much passion to take care of our pharmacy communities. PBMs save no one money, they only take and take and take, Robin Craft said.”
| Massive House Bill Targets PBMs in Federal Plans | |
The same day (July 23) their House colleagues on the Oversight and Accountability Committee were grilling executives from the Big 3 PBMs, Reps. Jake Auchincloss (D-MA) and Diana Harshbarger (R-TN) introduced HR 9096: the Pharmacists Fight Back Act, an aggressive, far-reaching PBM bill that would reform payments in federal health programs — Medicare, Medicaid, Tricare and the Federal Employees Health Benefits Program — by requiring reimbursements based on acquisition costs and higher dispensing fees.
HR 9096 would also protect pharmacies and patients from such abusive PBM practices as steering, network restrictions and retroactive fees. Its reach will necessitate referral to at least four committees of jurisdiction.
Among its major provisions:
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Implements a transparent reimbursement formula tied to the market-based NADAC plus a higher dispensing fee plus 2 percent. The payment model would apply to ALL pharmacies — including PBM-affiliated retail, mail-order, and specialty outfits.
- Ends PBMs' ability to restrict pharmacy networks and reduce patient choice.
- Requires PBMs to share 80% of rebates with patients as copayment concessions at the point of sale while preserving 20% of rebate dollars to help offset premium growth in federal plans.
- Prohibits PBMs from steering patients to PBM-affiliated pharmacies.
- Bars brand-drug mandates when a cheaper generic is available, spread pricing, fees imposed on pharmacies at the point of sale or retroactively, or tying pharmacy reimbursement to scores, metrics or patient outcomes.
The bill would improve the accuracy of NADAC by requiring mandatory reporting from all pharmacies that dispense outpatient drugs — including PBM mail-order and specialty pharmacies. Though some independents are opposed to mandatory reporting of purchase costs, it would improve the consistency of the NADAC benchmark.
The bill assigns felony status to violations of its provisions and would allow individuals to file suit against a PBM on behalf of themselves and the federal government.
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Time is Short: Keep the Pressure on Congress
Enthusiasm for PBM reform is surging in Congress, and our allies are working tirelessly to build support for passing reforms this year. But time is running short: Congress has only three work weeks in September before members leave to campaign, not returning until Nov. 12. for a lame-duck session of just five legislative weeks. Your input is vital to helping get reforms passed by the end of the year, so please go to our Action Center and use our resources to craft a communication to your congressional delegation.
Click the link below to log in and send your message
urging action on PBM reform before the end of 2024:
https://www.votervoice.net/APRX/Campaigns/73244/Respond
Also, American Pharmacies is also asking members to submit to the House Oversight Committee examples of communications with any of the Big 3 PBMs in which they refuse to negotiate terms of reimbursement in provider contracts. This is an important action to provide the committee ample evidence that the PBMS are lying about their willingness to negotiate contract terms. The committee states that it welcomes such examples.
Simply email oversight.committee@mail.house.gov and copy/paste in examples of emails you have received from the contracting arms of the PBMs effectively stating that their contract offers are non-negotiable. Please put "PBM Provider Contracts are Not Negotiable" as the subject of your email and provide a short narrative about your contract-related communications with the PBM.
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Mark Cuban Boosts Post About FTC
A July 2 post (below) on our X/Twitter account encouraged readers to submit comments to the FTC for its Aug. 1 hearing on PBM abuses.
Billionaire and Cost Plus Drugs founder Mark Cuban liked the item and reposted it on his own X account, boosting the post to a phenomenal
110,500 views, 34 reposts and 56 likes.
Thanks, Mark!
Be sure to follow APRx on Facebook, LinkedIn and X.
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Leaders from American Pharmacies and our wholesale partner, Cencora, meet each quarter to review our relationship, analyze key performance indicators and address issues/challenges that affect our members. The meetings are a critical forum for discussing and resolving problems, driving the growth and success of APRx and strengthening our bond with our wholesaler.
APRx, Cencora Meet to Discuss Issues & Strategies
The Quarterly Business Review (QBR) held Aug. 13 focused a great deal on addressing and resolving problems that affect our members, it also strengthened our cooperation with Cencora through sharing ideas and solutions and identifying business goals that are vital to both organizations.
Here Are Some Highlights of the Meeting:
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Pharmacy Reimbursement
Under Negotiated Med D Pricing
CMS continues to swiftly roll out its drug price negotiation program after publishing draft guidance earlier this month for the next phase of its Medicare Part D price-setting plan.
Independent pharmacy concerns have arisen over the planned use of a Medicare transaction facilitator (MTF) to enable the exchange of data and payments among supply chain entities.
Cencora has analyzed two options CMS is considering for how drug manufacturers will pay pharmacies the difference between the WAC price and the lower Maximum Fair Price, or MFP:
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The retrospective refund model, in which pharmacies would be reimbursed at the lower negotiated MFP, then be paid the difference between the MFP and the WAC by the drug manufacturer. This method raises serious concerns among pharmacies about whether these payments can realistically be made within the prescribed 14-day refund payment window.
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The prospective payment model, in which pharmacies would purchase negotiated drugs at the lower MFP price from their wholesaler, who would be refunded the difference between the MFP and WAC by the drug maker. This method raises concerns about inventory management and segregation of drugs for Medicare patients and non-Medicare patients.
We will work with Cencora to keep you informed as the CMS plans are finalized.
The Biden Administration on Wednesday published 2026 negotiated prices for the first 10 drugs: Eliquis, Enbrel, Farxiga, FLAST/NovoLog, Entresto, Imbruvica, Januvia, Jardiance, Stelara and Xarelto. You can click here to see the 2026 negotiated prices compared to 2023 list prices and the total calculated savings from the reduced prices.
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New Features in ABC Order
Cencora discussed the results of its Communicating Operational Relationship Excellence (CORE) initiative that is designed to improve its processes and communications to increase customer satisfaction. The initiative is driven by information and ideas gathered from extensive internal and customer surveys.
CORE-driven changes in ABC Order have added useful information in several areas:
- When items are out of stock, more detailed information now provides supply status at both the distribution center and corporate levels (see illustration above).
- On pre-orders for seasonal vaccines, the pre-order dashboard now displays open quantities when products are not shipped.
- A new "Shop Marketplace" link appears under the "Browse by Category" function.
- On the Order Confirmation page, you will see new details of your open Marketplace cart (if applicable).
- You can now access and run a new DSCSA report that has filters for CTIN plus serial and lot numbers, as well as new PDF and Excel output options.
Generic Sourcing Update
Upcoming Generic Launches: Cencora reported that the most anticipated launch –― the generic version of Novartis' blockbuster heart drug Entresto –― could be delayed past August due to federal lawsuits pressed by Novartis to block the generic launches. A federal judge in Delaware on Aug. 12 declined to stop the scheduled launch by MSN Laboratories of its FDA-approved generic, but temporarily blocked sales of the drug while Novartis takes its case to a federal appeals court.
WEE Request Under DSCSA: Cencora also reported that it has filed a WEE (Waivers, Exceptions and Exemptions) request with the FDA because of challenges it is experiencing with suppliers that are having difficulty meeting all requirements of the Drug Supply Chain Security Act (DSCSA). Those issues include failure to submit data to Cencora, incomplete or faulty data, and barcode issues.
The waiver would allow Cencora to operate as a DSCSA-compliant wholesaler while it works with suppliers to remedy data submission and barcode issues. Nov. 27, 2024, is the final deadline for all manufacturers, wholesalers, distributors and pharmacies to comply with DSCA security provisions.
Flu Update: A report on the 2024 Australian flu season showed that flu cases in that nation have peaked slightly above 2023 levels. Cencora said the H3N2 flu strain –― one of the more potent variants –― is the predominant strain in Australia.
APRx Preferred Program: American Pharmacies gave a report on its efforts to enroll members in its new tertiary supplier program through Cencora, which features individually negotiated prices on some items that may be lower than what is available through Cencora PRxO or SmartSource, Cencora's secondary program.
Cencora has modified product selection logic in ABC Order so that an NDC will automatically default to a lower APRx Preferred price when it is available.
Operational Issues: American Pharmacies discussed onboarding, drop shipments, product availability, deliveries and other Cencora issues that affect our members' operations. During the QBR, as well as on a year-round basis, we present our members' challenges to Cencora and work with them to identify/promote solutions.
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Results
In the month of July, each time a participating member called a patient with a goal of addressing refill adherence, they captured:
- 1 fill
- $101 in revenue
- $15 in gross profit
Note: This accounts for all calls placed; some unanswered, some answered but unsuccessful, and some answered and successful.
- 75% of answered calls were successful
- 24% of captured fills were PDC drugs (i.e., Star Ratings performance measures)
- Guided Growth-directed adherence outreach ensures simultaneous pursuit of:
- Rx volume
- Star Ratings
- Adherence program enrollment (i.e., med sync or auto-refill)
- Profitability
Did you know…
- The recommended and highly successful Guided Growth adherence program was designed by APRx members, for APRx members
- Guided Growth was designed to yield optimal efficiency, maximum ROI, and is statistically proven to improve refill adherence profitably
Inquiry & Research Guide
Our three-page guide will show you how to unlock the advanced power of RxCompass by running reports that give you insights into the profitability of your dispensing by plan, by drug NDC, by patient or household, or help you determine the net value of a generic-drug claim.
Available reports include
- Reimbursement Rate report
- Monthly Performance Trending report
- RxCompass Top NDC report
- Patient Value report
- Profit Estimator
► See/Download the Guide
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American Pharmacies staff (from left front) Ryan, Gevara, Sr. VP of Sales; Raul DeArmas, Director of Sales; President Laird Leavoy; and Danny Nelson, VP of Pharmacy and Clinical Services, meet with Cencora leaders in Orlando. | |
ThoughtSpot Builds Knowledge, Connections | |
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IMPORTANT NOTE FOR ATTENDEES: ThoughtSpot Rebate certificates were emailed to qualifying attendees on Aug. 6 and must be acknowledged by E-signature no later than Sept. 6 in order to receive the rebate. The certificates were emailed from Echosign@echosign.com with the subject line "ThoughtSpot 2024 Rebate Certificate." If you need to have your certificate re-sent, please contact your Cencora account executive.
More than 120 American Pharmacies members representing almost 200 pharmacies recently attended Cencora's annual ThoughtSpot conference in Orlando, FL. Attendees went to CE sessions, heard enlightening speakers and panel discussions, enjoyed live music and food at the Opening Night Reception and got to roam a massive exhibit hall with hundreds of national vendors.
The meeting marked the official switch to the new Cencora brand, officially retiring the former name of AmerisourceBergen.
American Pharmacies was the center of attention Thursday and Friday nights at the Marriott Lobby Bar, where President Laird Leavoy and other staff hosted a steady stream of members, prospects, vendor partners and Cencora leaders. At one point, Leavoy was entertaining CEO Steve Collis, COO Bob Mauch, Executive VP Rich Tremonte and Senior VP Tim Cernohous, who oversees community and LTC pharmacy for Cencora.
The American Pharmacies team was well-represented at the event and made maximum use of its time there, holding key meetings with Cencora execs and senior staff to discuss a variety of strategic and operations issues, meeting with members and prospects, and identifying potential vendor partners to help drive our organization's advancement. APRx leaders also had a very productive meeting with Mark Ey, NCPA's new chief operating officer, about how APRx and NCPA might better collaborate in advocacy and other areas.
Highlights of the conference included a powerfully motivating keynote address from skateboarder and entrepreneur Tony Hawk and a panel discussion featuring Cencora's top leadership trio of Colis, Mauch and Tremonte.
Be sure to mark your calendars for ThoughtSpot 2025, which will be held July 16-19 at the MGM Grand Hotel in Las Vegas.
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(L-R) Mark Ey, COO Of NCPA; Miguel Rodriguez, APRX EVP and General Counsel; APRx member Ashley Seyfarth.
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CVS Caremark President David Joyner (L) addresses the House panel as Adam Kautzner of Express Scripts and Patrick Conway of Optum Rx listen.
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House Panel Grills PBM Execs for Hours
APRx Urges Members to Expose PBMs' Refusal to Negotiate Contracts
► Watch the Hearing
On July 23, the House Oversight & Accountability Committee held a hearing to examine the role of pharmacy benefit managers in driving up prescription drug prices, decreasing competition in the retail pharmacy space and generally acting in their own interest.
The hearing largely focused on testimony from executives of the three largest PBMs – CVS Caremark, Express Scripts and Optum Rx, which together process about 80% of all prescriptions in the U.S.:
- Adam Kautzner, President of Express Scripts
- David Joyner, President of CVS Caremark
- Patrick Conway, CEO of Optum Rx
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Panel Skeptical of PBM Responses
There were many times during the hearing when panel members doubted the truthfulness of the three PBM witnesses. Some representatives expressed frustration that they could not get a straight answer to questions about fees levied on independent pharmacies, the reason for pricing disparities across the country, and how PBMs steer patients to pharmacies they own. Several panel members reminded the three witnesses that they were under oath before directing a question to them.
For example, all three testified under oath that their PBMs are always willing to negotiate provider contracts with pharmacies. Responding to an inquiry from South Carolina Rep. Russell Fry, Express Scripts President Adam Kautzner stated (with a straight face) “Pharmacies can always redline a contract back to us and negotiate." (In response, APRx is urging members to submit evidence to the committee that documents these falsehoods — See the Call to Action above.)
Caremark President Joyner was greeted with open skepticism when he touted his company's TrueCost model, which he claimed produces the lowest drug prices. Rep. Jake Auchincloss of Massachusetts listed several TrueCost drugs that had markups of 4,000% or more, such as the multiple sclerosis drug Teriflunomide, which lists for $6,226 with Caremark when the NADAC price is $16. "That's a 38,000% markup," Auchincloss said.
Rep. Raja Krishnamoorthi of Illinois cited federal statistics showing that DIR fees and other price concessions paid by pharmacies to PBMs increased 107,400% between 2010 and 2020, "a rate of increase that literally staggers the imagination."
After Committee Chairman James Comer of Kentucky pressed the three executives to pledge that their PBMs would not steer patients to their own pharmacies, he considered their responses less than forthright.
“I’m going to take that as an answer [that] you’re going to continue to steer patients away from independent pharmacies,” Comer said.
Pharmacy champion Buddy Carter of Georgia, not a member of the panel, dropped by to take his shots at the trio of execs. When the three each denied that their PBMs steer patients to their own pharmacies, he called the companies' practices "despicable."
The 4.5-hour hearing --“The Role of PBMS in Rx Drug Markets, Part III: Transparency & Accountability” -- was focused on the primary findings of a committee report released earlier that morning. That report concluded that “the three largest PBMs have used their position as middlemen and integration with health insurers, pharmacies, providers, and recently manufacturers, to enact anticompetitive policies and protect their bottom line.” Among the report’s key findings:
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PBMs frequently tout the savings they provide for payers and patients through negotiation, drug utilization programs, and spread pricing, even though evidence indicates that these schemes often increase costs for patients and payers.
- As many states and the federal government weigh and implement PBM reforms, the three largest PBMs have begun creating foreign corporate entities and moving certain operations abroad to avoid transparency and dodge proposed reforms.
- The largest PBMs’ use of tools such as prior authorizations, fail-first policies and formulary manipulations impose significant harms on Americans’ health outcomes.
- The anti-competitive policies of the largest PBMs have cost taxpayers and reduced patient choice.
Hearing Takeaways
Panel members and guest representatives were consistent in denouncing multiple PBM practices and in doubting the honesty of the three witnesses' responses, as well as united in their desire to act. The hearing showed true bipartisan support for PBM reform, as both Republicans and Democrats expressed the desire to work together on legislation.
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July Webinar Spotlights Fight to Recoup DIRs
American Pharmacies and NCPA hosted a well-attended July 23 webinar on the ongoing class-action suit against the PBMs to recoup DIR fees for independent pharmacies.
Miguel Rodriguez, APRx EVP & General Counsel, kicked off the webinar with an overview of the issues presented in the lawsuit. He was later joined by Matt Seiler, NCPA VP & General Counsel; and
John Roberti, Attorney/Partner at Cohen & Gresser, one of the law firms handing the suit.
NCPA created TRUST LLC to focus on protecting access to retail pharmacy. This is a nationwide endeavor, and NCPA has engaged three law firms to go after the PBMs in an effort to recoup abusive DIR fees. To learn more, please check out https://www.fightpbms.com.
Lawsuit Participation is Free for NCPA Members
To learn about joining NCPA at a discounted American Pharmacies rate ($90 off regular annual dues), click here.
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Tx Pharmacists Must File Medicaid Surety Bond by Sept. 1 | |
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Texas is one of 15 states that require all Medicaid providers – including pharmacies and DME retailers -- to have a surety bond on file with the state. Effective Sept. 1, 2024, failure to have a valid surety bond on file with the Texas Medicaid & Healthcare Partnership (TMHP) will result in the denial of all Medicaid claims related to any pharmacy locations not covered by a bond.
Also, pharmacists who already have surety bonds on file with PEMS must make sure those bonds are renewed before their expiration date. If your bond is expiring this month, be sure to update it by September 1, 2024, to avoid losing your Medicaid claim privileges.
If you are enrolling for the first time as a Medicaid provider in Texas, you can enter your surety bond information during the initial enrollment process.
To update your surety bond information as a currently enrolled provider, log into your admin account in PEMS -- https://secure.tmhp.com/MyAccount -- and enter your NPI number in the search field. If you are not prompted to re-enroll or revalidate, you can select the option “Maintenance Practice Location Surety Bond Request.” Simply follow the instructions from that point; you will need to upload a copy of your surety bond to complete the update process.
For assistance, see the video “File Maintenance Surety Bond;” you may also refer to the PEMS Instructional Site for guidance on completing the surety bond maintenance process in PEMS. For more information, call the TMHP Contact Center at 800-925-9126 or the TMHP-CSHCN Services Program Contact Center at 800-568-2413.
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