Last week, when CMS announced that it would not take any action to finalize a proposed rule prohibiting retroactive pharmacy payment clawbacks, aka pharmacy DIRs, I rapid-cycled through most of the seven stages of grief.
First, Shock and Denial. I actually had to read the press release multiple times to make sure I was reading it correctly. Then I moved to Anger and Outrage. Pharmacy DIRs are the single biggest issue facing community pharmacies. Thousands of pharmacies, perhaps as many as 5 percent of all pharmacies including both big chains and regional and community pharmacies, have closed their doors in the last three years as pharmacy DIR fees have grown increasingly oppressive. Millions of seniors have been prematurely pushed into the coverage gap, or "donut hole," because of pharmacy DIRs artificially inflating the price of their prescriptions at the pharmacy counter. And billions of taxpayer dollars have been spent on seniors prematurely entering the catastrophic phase where government picks up most of their prescription drug costs.
We issued a joint statement with the National Association of Chain Drug Stores that said we were "disappointed and frustrated." One NCPA member emailed me questioning that disappointed and frustrated didn't go far enough. I told him that if I fully expressed how I felt in a public statement it might have resulted in a fine from the Federal Communications Commission.
Moving to one of the next stages, Reconstruction and Working Through, we began working toward the appropriate result. While we were outraged by the decision and had expected the pharmacy DIR rule to be finalized, we knew better than to assume it was a fait accompli. The Phair Pricing Act of 2018 was introduced earlier this year in the House of Representatives by Reps. Doug Collins (R-Ga.) and Vincente Gonzalez (D-Texas). The act would end retroactive pharmacy payment clawbacks. Sen. John Kennedy (R-La.) introduced a similar bill in the Senate. Pharmacy champions Sens. Shelley Moore Capito (R-W.Va.) and Jon Tester (D-Mont.), and Reps. Peter Welch (D-Vt.) and Morgan Griffith (R-Va.) also introduced the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act, which would also end retroactive pharmacy DIR fees.
The no-news about pharmacy DIR provisions not being part of the final rule overshadowed some very positive developments. Last week, the same CMS that disappointed us released a regulatory guidance warning PBMs about the inappropriate use of spread pricing in Medicaid managed care programs. Spread pricing in Medicaid managed care is, of course, widespread, and states such as Ohio, New York, Kentucky, and Pennsylvania have found hundreds of millions of tax dollars that were wastefully given to out-of-state PBMs. Also, this week Oklahoma Gov. Kevin Stitt (R) signed a bill that, among other things, would allow any willing pharmacy to participate in local pharmacy networks. A similar bill had been vetoed by the governor after making it through the legislature unanimously. In South Carolina, Gov. Henry McMaster (R) signed S. 359, which requires PBM licensure, increases reimbursement transparency, and controls anti-competitive PBM practices. These are just a few examples of great developments in the last 10 days that will be helpful toward changing the pharmacy payment model. However, it's the unpredictable DIR fees that have ranked as the NCPA membership's top priority for the last three years.
The final stage of grief is where this coping analogy breaks down. The final stage is Acceptance. That is something NCPA will not do when it comes to pharmacy DIRs. We have opposed them from their very beginning years ago, and we will continue to vigorously oppose them and pursue every option that results in their demise.