The 4 Policy Changes Hitting Pharmacies

Drug Topics JournalDrug Topics August 2018
Volume 162
Issue 8

What the experts have to say about recent shifts in pharmacy law and practice.

Pills in the shape of America
HR 5958 Key Clauses

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Here’s a sentence that has been true for millennia: Change is coming. In pharmacy, for the next six months to two years, this could be truer than ever as laws and regulations come into effect that could benefit the profession. Some expected changes have been long sought for, while others are of more recent vintage. Many will come through new or modified state and federal legislation or regulations.

But what policy changes might be nearer rather than further off and how will they affect the practice of pharmacy? We’ve narrowed it down to four areas of change and then asked some experts what to expect.

1. PBM Transparency Rule Changes

Pharmacists have been complaining fora long time that PBMs do not reimburse them fairly, and state legislatures are starting to take notice, says Allie Jo Shipman, PharmD, MBA, associate director for state government affairs at NCPA.

Related article: The New Goal for PBMs: Transparency

Many states have passed legislation related to transparency on the part of PBMs. Fair pharmacy audit legislation, which allows state regulatory agencies to audit PBMs for information on what drugs cost compared to the reimbursement to pharmacies, has passed in about 40 states, Shipman notes. Greater transparency would help retail pharmacies understand reimbursement policies and rates. “One big trend that we saw come up this year especially is trends in transparency and disclosure reporting, especially for state Medicaid agencies.” Kentucky, Georgia, and Louisiana are among states that are requiring PBMs to release information on drug pricing and reimbursement rates to pharmacies as it relates to Medicaid or other state health benefit plans.

One catalyst triggering lawmakers to act on PBM transparency was CVS Caremark’s move last year to cut reimbursement rates for drugs in several states, Shipman says. “It is finally starting to come to a head where state legislators have been hearing from pharmacists and from [pharmacy] associations about PBMs and these practices,” she says.

Arkansas is the first state to pass a law to fully authorize its insurance commissioner to regulate PBMs. The law permits the state insurance commissioner to review and approve PBM compensation programs to ensure that reimbursement for prescriptions is fair and reasonable, says Jason Rapert, a Republican state senator in Arkansas, who is also president of the National Council of Insurance Legislators. The council, made up primarily of state legislators, creates model versions of laws that can be used to draft legislation. The organization has drafted a template, “Pharmacy Benefits Manager Licensure and Regulation Model Act,” that states can tailor to their needs. 

Related article: Ohio Cracks Down on PBMs

“[PBMs] have been getting away with making up their own rules, playing their own version of street ball here, and nobody’s calling foul,” says Rapert. “We need a referee that can actually operate in this arena,” he tells Drug Topics. The goal of the law is to “pull back the curtain” and see what is going on in PBMs, he says. Pharmacists across the country, who have commented on the draft.

Giving states more oversight to PBM operations does not always require new legislation, Shipman notes. Some states, like Pennsylvania and Montana, are having their auditors general look more closely at PBMs, she says. “Even if they haven’t passed legislation, they are still looking at PBMs with greater scrutiny.”

2. DIR Fee Changes

Direct and indirect reimbursement (DIR) fees and PBMs are interconnected, says Kala Shankle, JD, NCPA’s director of policy and regulatory affairs. These fees, used by PBMs in Medicare Part D, can be any retroactive fee. Many are based on quality-based metrics, but it is not clear what those metrics are measuring, she says. “The DIR fight is largely a Medicare fight and independent pharmacists are flat-out angry about DIR fees because something like 35% to 36% of a typical independent’s business will be Medicare patients.”

Related article: Everything Pharmacists Need to Know About DIR Reform

Knowing what metrics PBMs are using to basereimbursement would help allow pharmacists to control costs and reduce the risk of being reimbursed less than what a drug cost months after a prescription was filled.  

A bill has been proposed in the House-HR 5958, “Phair Pricing Act of 2018”-which seeks to clarify the metrics used to determine DIR fees, Shankle says. Bills similar to this one have been proposed in previous Congresses.

3. Provider Status Changes

Expanding the scope of practice for pharmacists is being considered in state legislatures and in Congress.

Drug Topics Editorial Advisor David D. Pope, PharmD, CDE, chief of innovation and founder of Strand, a company that helps pharmacists launch clinical services within their communities, says momentum is building to let pharmacists practice at the top of their license. This is particularly true in states with large areas that are underserved. Some rural counties in the United States have no physicians and hospitals are hours away.

In Congress, a main consideration is whether Medicare should cover payments to pharmacists in these underserved areas, notes Drug Topics Editorial Advisor James A. Jorgenson, RPh, MS, FASHP, CEO of Visante, a company that consults on healthcare optimization and high-performance pharmacy development. “Nationally, more than half of the 100 total members in the U.S. Senate have signed on to support the Pharmacy and Medically Underserved Areas Enhancement Act [S 109),” he says. “With 51 cosponsors, the bill has surpassed the number of votes necessary to pass this legislation in the Senate.” The same bill is HR 592 in the House of Representatives, he notes.

The bill would provide for Medicare coverage and payment for certain pharmacist services that are furnished by a pharmacist in a health-professional shortage area, and that would otherwise be covered under Medicare if furnished by a physician. Allowing pharmacists to do more in rural areas that are underserved is significant, Pope says. The U.S. Census defines what constitutes a rural area, and a large part of the country falls under that designation.

On the state level, many are considering allowing pharmacists to prescribe oral contraceptives, while others would allow them to prescribe treatments for flu or strep throat, Pope says. Virginia is considering allowing pharmacists to perform opioid abuse counseling. Pennsylvania is discussing allowing pharmacists to counsel for tobacco cessation.

These kind of scope-of-practice expansions add up, he says. For example, allowing pharmacists to counsel patients about diabetes,another practice being considered, would mean that they could conceivably be counseling almost one third of U.S. adults.

The APhA had been promoting increased scope of practice for a long time, Pope notes. The organization even has a website specificallyto promote the idea: “APhA supports state pharmacy associations’ efforts to expand state scope of practice which has experienced significant success in recent years,” says Stacie S. Maass, BSPharm, JD, APhA’s senior vice president for pharmacy practice and government affairs. Changing provider status is complicated, she tells Drug Topics. “It is dependent on a complicated combination of policies involving payment, scope of practice and payers, and governments authorizing who can provide the service.” 

Related article: Provider status: Important to pharmacists, critical to patients

As the scope of practice for pharmacists increases, reimbursement for these activities should become widespread, because expanding what a pharmacist can do is in the best interests of all healthcare stakeholders, says Jorgenson. “The fastest growing expense line in healthcare is medicine, and who has more education and ability to impact that than pharmacists?” Health insurers are starting to recognize that adding a pharmacist to clinics and to care teams helps lower costs, he says, noting the work done to do that by Blue Cross Blue Shield of Michigan and the University of Michigan healthcare system, which has led to lower healthcare costs. 

Maass says expansion of scope of practice does not ensure there will be increases in payments, but it might. The need for increased healthcare access, the push toward value, and the recognition of the positive impact pharmacists have on patient outcomes and costs, is leading to an increase in payment to pharmacists for their services beyond those related to dispensing, she says.

While it would be nice to have changes to provider status made in one fell swoop nationally, incremental change at the state level is what more commonly happens, Pope says. “If we are going to move the landscape, it is going to happen bits at a time.”

4. Compounding Changes

Changes to the policies for compounding pharmacies are on their way, both in standards issued by the United States Pharmacopeia-National Formulary (USP) and in the oversight of these facilities by the FDA and state boards, says Gus Bassani, PharmD, vice president of research and development at PCCA, a supplier of ingredients, excipients, and technical consulting for pharmacies, healthcare missions, and outsourcing facilities.

For USP, the sections that are undergoing changes are chapters <795> and <797>, Bassani says. USP <797> covers sterile compounding and USP <795> concerns nonsterile compounding. Both chapters govern how pharmacies compound products and have an impact on specialty pharmacies.

Related article: FDA Adds New Compounding Pharmacy Regulations

The goal is to have chapters <795> and <797> become official by December 2019, Bassani says. Implementation of chapter <800>, which concerns handling of hazardous drugs and ingredients, was held up so that facilities that conduct this kind of compounding could make necessary changes to infrastructure to stay in compliance.

Although USP sets standards for how compounding should be conducted, the chapters are only standards, not regulations, Bassani says. State boards of pharmacy may decide not to require their full implementation, depending on their own needs. “You could have a very rural state that may have some unique needs as it relates to their population and patient access issues versus other states,” he says. “There’s some good reasons why states may want to do their own thing, but overall the standards are good for patient safety.”

On the national regulatory side, the FDA regulates outsourcing pharmacies mainly through section 503B and determines what bulk drug substances pharmacies can use in compounding through section 503A, Bassani notes. The FDA has been issuing guidance documents to clarify some of the rules, he says. For example, 503A facilities are not supposed to create a copy of a commercially available product; the FDA generated guidance documents on what constitutes a copy, along with other guidances, he says.

The FDA appears to want to increase the number of facilities that operate under 503B, Bassani tells Drug Topics. “They have stated their intent is to issue new regulations and guidance around the good manufacturing practices that would be required of an outsourcing facility. Currently they’re required to comply with full CGMP [current good manufacturing practice], just like a big pharmaceutical manufacturer. But it’s our sense that the FDA would like to see more pharmacies, more compounders registering as 503Bs. But it is millions of dollars of investment to do that,” he says. “Their intent, as we understand it, is to make it a little bit more appealing forcompounders to become federally registered outsourcing facilities.”

A bill in the House of Representatives-HR 2871, “Preserving Patient Access to Compounded Medications Act of 2017”-is aimed at tweaking parts of the 503A for compounding pharmacies, Bassani says. One key change it would make in 503A is that it would authorize “office-use” compounding by state licensed pharmacies where allowed by state laws.

Related article: How the NECC Case Changed Compounding Pharmacy

Currently, FDA takes the position that office-use is not allowed under 503A, and that every compounded preparation must be made according to a patient specific prescription, unless it is made by an outsourcing facility in compliance with 503B.  This would allow a compounder to create enough product for a physician or clinic to keep on hand for general use, rather than for a specific patient, if their state allows it, yet not have to register as a 503B, he says.

Are Changes Certain?

If some new laws and regulations are always to be expected, what cannot be predicted is when and to what extent. Bills will get stalled in state legislatures. Regulations may get put through more comment periods or put on hold. Change may come, but it is not inevitable, says Jorgenson. “I think if we don’t get these types of changes in maybe the next three to five years, it isgoing to be difficult to ever get them done to a level we would like to see done. That window of opportunity is not going to stay open forever.”

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