Q&A: What the NCPA is Doing to Fight Back Against PBMs

Pharmacy benefit managers (PBMs) have emerged in the pharmacy benefits space as prescription drug middlemen who abide by their own rules at the expense of patients and independent pharmacies alike. They utilize vertical integration and opaque pricing tactics to drive profits for themselves and their affiliated companies, while leaving smaller pharmacies behind.

On a recent episode of Over the Counter, Steve Postal, JD, Director of Policy and Regulatory Affairs at the National Community Pharmacists Association (NCPA), sat down with Drug Topics to discuss his organization’s work to introduce PBM reform. From resources made available for its members to class-action lawsuits and several legislative bills in the works, read about the NCPA’s fight to reclaim revenue for community pharmacists.

Drug Topics: How has the NCPA’s stance on PBMs changed over time?

Steve Postal: I've only been here for about a little over 2 years, but we've been at the forefront advocating for more PBM oversight for a long time. We’ve just been fighting this battle for quite some time now, and it's good, but just in the recent past, there's been much more attention put on these intermediaries, especially given the fact that only a couple of years ago it seems like, compared to now, the spotlight is shining a lot more brightly against these actors.

"We've been at the forefront advocating for more PBM oversight for a long time," Postal told Drug Topics. | image credit: izzuan / stock.adobe.com

Drug Topics: As a representative of the NCPA, what’s your organization’s number one goal that you’d like to see be executed in response to PBMs?

Steve Postal: I would think there might be 3 that I can think of. So, one is to remove the conflicts of interest [that] the largest PBMs have through vertical integration. [It’s] reconciling that and then, as I discussed earlier, contract revisions, just making it more fair to independent pharmacy in the marketplace.

Also, [we want to] ban spread pricing in Medicaid managed care by requiring a fair and transparent reimbursement structure. The legislation that we support would [save] taxpayers about $1 billion and that’s S.2973 which is the Modernizing and Ensuring PBM Accountability Act, or MEPA act for short.

I guess the third one would be to require CMS to define reasonable and relevant contract terms with Medicare. Our legislative vehicle for that is S.3430, which is the Better Mental Health Care, Lower-Cost Drugs, and Extenders Act. This bill includes a provision which requires CMS to define reasonable and relevant Medicare Part B contract terms, and it would also give CMS the tools to oversee and enforce those terms; so again, helping to level the playing field with independents.

Drug Topics: What are some of the recent successes your organization has had in community pharmacy’s fight against these prescription drug middlemen? Have there been recent changes in legislation that have given power back to pharmacies subjected to PBM demands?

Steve Postal: On the federal side, we've had a couple. The first is that recent FTC interim PBM report and the key development there is [that the] FTC has really acknowledged the dramatically changing landscape as regarded to consolidation since their last report back in 2005. I'll say that [the] Lower Cost, More Transparency Act that I mentioned earlier, which does include our Medicaid Medicare priority policies, this was passed out of the house with overwhelming bipartisan support in December. We're now waiting and hopeful for final passage.

Recently too, ESI Express Scripts sent messages to their Medicare Part D-contracted pharmacies that they're suspending their bonus pool fee program. This came from a result of advocacy from NCPA to CMS; numerous communications arguing that these bonus pool fees are additional in-network per-claim fees that are not being applied at point of sale and that they were violating CMS’s Medicare Part D or DIR final rule back from May of 2022. CMS has indeed communicated to NCPA in late May that those fees were outside of the scope allowable under the final rule, and then we've got that communication with Express Scripts to tie that loop, and they're standing down from those which is definitely a good win.

Also, we have 3 class-action lawsuits that are being filed by an NCPA member to help pharmacies recover DIR fees. So, we're hoping for positive results from those.

Turning to the states, there’s a number of bills, I'm actually counting 7 bills, that were great in getting PBM reform across the finish line. So, Louisiana SB.444, among other things, it prohibits PBMs from reimbursing pharmacies or pharmacists less than the acquisition costs for the drug. Vermont H.233 prohibits spread pricing, also prohibits gag clauses, and creates a fiduciary responsibility for the PBMs to the payer. Kentucky SB.188 requires pharmacy reimbursement in the commercial market, and then most state employee plans, to cover the national average drug acquisition costs, or NADAC, that’s the professional dispensing fee. [It] also looks at network adequacy and limits the role of mail order pharmacy. Oregon HB.4149 adds some audit protections [and] strengthens the appeals process, among other things. Idaho HB.596 requires PBMs to report all rebates and to use pass-through pricing instead of that spread pricing. And then additionally, West Virginia SB.453 and then Washington State SB.5213 [are] also key wins in the PBM reform space. [Our state team] has been extremely active; we've had some great wins this year.

Stay tuned for a full-length version of our Over the Counter episode with Postal.

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