Jan. 30, 2013 – With this legislative session just days away, the National Community Pharmacists Association (NCPA) is urging Oregon state lawmakers to pass a series of common-sense bills that would collectively reduce red tape for pharmacists caring for patients, give consumers greater pharmacy choice at no extra cost, and keep more revenue within the state.
Spear-heading the effort is State Representative Jules Bailey (D-Portland), a health care leader and champion of small businesses, who has organized a bipartisan working group with State Reps. Jim Thompson (R-Dallas) and Margaret Doherty (D-Tigard) to generate consensus solutions. Unfortunately, after multiple meetings to reach a mutual agreement, representatives of large pharmacy benefit managers (PBMs) recently walked away from negotiations.
“My interests in this legislation come from listening to my constituents,” said Bailey. “Patients tell me about their maddening experiences navigating the PBM bureaucracy to get vital prescription drugs at a reasonable price and in a timely fashion. Pharmacists tell me about how PBMs squeeze them to the breaking point as a result of the onerous, take-it-or-leave-it contracts they must sign to have access to patients and about abusive PBM audit practices. The universal complaint is that the current system is broken. People want to know why we aren’t doing more to fix it. That’s why I will continue to push reform measures that emphasize fairness, choice, access and transparency. It’s also why a frank dialogue is important to achieving consensus, because the only thing that is unacceptable is continuing to operate under the status quo.”
NCPA CEO B. Douglas Hoey, RPh, MBA, said, “We are very appreciative of State Representative Bailey’s efforts to promote fairness, pharmacy choice and transparency in the interactions between PBMs and the health plan sponsors who contract with them to administer prescription drug plans, the pharmacies who provide prescription drugs and counseling services and, most importantly, the patients. The current system does not have the proper checks and balances. As a national leader in health care, Oregon can again help lead the way in promoting common-sense reforms that will ultimately allow patients to choose and receive the best health care possible, because that should be the overriding principle of any reform efforts.”
The working group’s efforts have centered on four issues.
The first is setting reasonable standards for pharmacy audits to protect against fraud without abusing the system. Today audits claim thousands of dollars from Oregon pharmacists and small business owners even when the correct medication is dispensed to the correct customer for the correct price. The recouped funds are then transferred out-of-state to large corporations. Recently, 22 different states have passed audit reform legislation.
Second, legislation that would focus on freeing patients from requirements that they use out-of-state mail order pharmacies that are owned by PBMs by allowing them to transfer their prescription to a local pharmacy that agrees to accept the same terms and conditions, including reimbursement rates. This legislation is similar to that adopted in the last legislative sessions in both New York and Pennsylvania. National consumer surveys conducted by J.D. Power and Associates, Consumer Reports and others have documented patients’ preference and higher satisfaction rates with local pharmacies with a pharmacist they know and trust. Moreover, the bill would keep more Oregon dollars within the state, at no extra cost to the consumer. The legislation being considered would put the principle of patient choice back into the system.
Third, maximum allowable costs (MACs) are the system PBMs use to determine how much they will reimburse pharmacies, mostly for generic prescription drugs that comprise 80% of what is dispensed to patients. Unfortunately, pharmacies are kept in the dark about the pricing changes for these products. Thus, these small business providers are “flying blind” in terms of taking into account the operating costs of their prescription drug inventory. The legislative remedy would allow pharmacists simply to know how the MACs are determined and make sure that timely updates are made to reflect market prices.
Fourth, is addressing the lack of transparency in PBM contracting practices. Health plan sponsors and patients are left in the dark about the validity and soundness of how their prescription drug benefits are being administered. Greater transparency into this often secretive and byzantine sector can facilitate better evaluation of PBM performance.
“When people learn about all the questionable business tactics PBMs are allowed to employ on a daily basis without any accountability they are amazed,” said Bailey. “While regulation for regulation’s sake is not a panacea, the utter lack of regulation when it comes to the PBM industry must end. I hope my fellow legislators, the governor and people of Oregon will join us in demanding reform. Without these proactive steps patients, health plan sponsors and pharmacies will continue to get the short end of the stick.”
