David Smith, RPh

In December, the NCPA asked our members for their feedback on the issues of highest priority to them. Their input is invaluable. The 

 helps inform NCPA’s advocacy agenda and helps us push for a marketplace where community pharmacies and their patients can thrive.

What our members told us, loud and clear, is that the elimination of retroactive direct and indirect remuneration (DIR) fees in Medicare Part D plans is their highest priority. These fees are recouped from pharmacies by pharmacy benefit managers (PBMs) weeks or even months after seniors pick up their prescription. The uncertainty is maddening for community pharmacists. After all, how do you operate your business when you can’t predict cash flow? And, these fees are bad for seniors who pay the inflated price and are pushed more quickly into the Medicare Part D coverage gap.

Related article: Everything Pharmacists Need to Know About DIR Reform

Spurred by NCPA’s concerns, the Centers for Medicare and Medicaid Services (CMS) has expressed skepticism about the way DIR fees are applied. In January 2017, CMS warned that DIR fees increase costs for Medicare beneficiaries and the federal government. Then in April 2018, CMS issued a 

 asserting its statutory authority to require that some portion of rebates and pharmacy DIR fees be applied at point of sale. The final rule stops short of requiring such a change, instead stating that new requirements “would be proposed through notice and comment rule-making in the future."

The regulatory progress is one route, but NCPA is also advocating for passage of 

 in Congress, "The Improving Transparency and Accuracy in Medicare Part D Drug Spending Act,

 which would prohibit pharmacy DIR fees from being applied retroactively.

The second advocacy issue identified by NCPA members is the continued lack of transparency in how PBMs calculate reimbursement rates for generic drugs. PBMs use multiple maximum allowable cost (MAC) lists, which can under-reimburse pharmacies, yet they charge plan sponsors a higher price for the drug and profit from the spread. The take-it-or-leave-it PBM contracts that community pharmacies must sign enshrine this inequity.

Related article: 10 Reasons Pharmacists Have It Tougher Than Anyone Else

So how is NCPA addressing this challenge? One way is by supporting 

, “The Prescription Drug Price Transparency Act,” which would provide clarity for how MAC prices are determined. The bill also creates an appeals process for contesting below-cost reimbursements and bans PBMs from requiring patients use mail order and specialty pharmacies where the PBM has an ownership interest. These changes would apply to Medicare Part D, TRICARE, and the Federal Employee Health Benefits programs.                                                                                             

The third advocacy issue identified by NCPA members was not among the top 

priorities for 2017, but is high on members’ radar now

. Community pharmacies across the nation have started seeing dramatic reimbursement cuts in Medicaid managed care plans, a serious financial blow to community pharmacies. The cuts may undermine a CMS directive that states must establish time and distance network adequacy standards for providers, including pharmacies, under managed care contracts and ensure continuity of care for beneficiaries on or after July 1, 2018. Community pharmacies ability to participate In Medicaid is endangered by these unsustainable cuts.

Because Medicaid is largely a state function, NCPA is working with state partners to ensure CMS’ network adequacy standards are being met. Managed care organizations should reimburse pharmacies at fee-for-service Medicaid pharmacy reimbursement rates. PBMs are currently running these tax payer-funded plans like commercial plans, where transparency and accountability are lacking. That must change. NCPA will continue to engage with CMS and other stakeholders to ensure pressure is applied to right this hardship.

Related article: Four Ways Trump's Drug Pricing Plan Impacts Pharmacists

In addition, NCPA is supporting states identifying savings in state Medicaid contracting. For example, West Virginia’s state Medicaid agency carved the prescription drug benefit out of Medicaid managed care last year. They did this based on a study that showed Medicaid could save $30 million annually by administering the benefit directly, which would also put $34 million back into local economies in the form of pharmacy reimbursements.

NCPA’s sole focus is on community pharmacy owners. They have told us what’s on their minds and we’re carrying that message-and potential solutions-to Capitol Hill and beyond.

Dave Smith, RPh, is president of the NCPA. 

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