SCPC Praises Bipartisan Collins-Loebsack Letter Advancing Investigation of PBMs’ Anti-Competitive, Non-Transparent Pricing Practices

DATE: February 26, 2016

Independent Long Term Care (LTC) Pharmacy Group Says MAC Transparency Act (H.R. 244) Strong First Step in Achieving Payment Transparency and Fairness, Taxpayer Accountability

Washington, DC – The Senior Care Pharmacy Coalition (SCPC) today praised U.S. Reps. Doug Collins (R-GA) and Dave Loebsack (D-IA) for issuing a letter with fourteen colleagues urging the Chairmen of the U.S. House Energy and Commerce, Ways and Means and Armed Services Committees to examine the importance of passing the MAC Transparency Act (H.R. 244) in advancing payment transparency in regard to how Pharmacy Benefit Managers (PBMs) reimburse a variety of pharmacy groups, including LTC pharmacies, for generic drugs administered to patients.

“Current non-transparent PBM pricing practices make it impossible for LTC pharmacies to predict how they will be reimbursed for the generic drugs they dispense under Medicare Part D, and passage of the MAC Transparency Act would be a strong first step towards more equitable, fair and transparent reimbursement for pharmacies dispensing generic drugs to seniors,” said Alan G. Rosenbloom, President and CEO of SCPC.

Under Medicare Part D – the largest payer for prescription medications in LTC facilities – the PBMs that administer Prescription Drug Plans (PDPs), and which often are owned by the PDPs or a shared parent company and frequently have links to major chain drug stores, use a Maximum Allowable Cost (MAC) pricing formula to establish reimbursement rates for a majority of generic drugs independent LTC pharmacies dispense to elderly Medicare beneficiaries.

Rosenbloom praised Collins and Loebsack for their ongoing efforts to spotlight how PBMs surreptitiously develop and alter their MAC pricing lists without disclosing how they determine which drugs to include on the lists, how those prices are established, or how frequently those prices are updated — rendering the process completely opaque.

“MAC pricing presents serious challenges to independent LTC pharmacies as it becomes difficult if not impossible to forecast revenues, and to assure resources sufficient to provide the extensive array of services LTC patients require, and which federal law mandates LTC pharmacies to provide,” Rosenbloom continued.

Rosenbloom said the SCPC will continue to focus attention on anti-competitive PBM pricing practices by pointing to Avalere Health pharmacy data, which SCPC argues demonstrates PBMs’ pricing methodology leads to arbitrary and capricious reimbursement.

“We will continue our effort to ensure federal lawmakers and regulators are aware of this unique data that sheds light on anti-competitive PBM pricing practices and their false claim that the pricing methodology used to reimburse LTC pharmacies and others for prescribed generic drugs is market-based,” he said. “To the contrary, we believe the data demonstrates PBMs’ pricing methodology leads to arbitrary and capricious reimbursement, and we are pleased it is helping to drive more aggressive congressional scrutiny of PBMs.”