ALEXANDRIA, Va. (March 17, 2023) – The National Community Pharmacists Association is cheering bipartisan legislation reintroduced today to improve transparency and prevent the use of spread pricing in Medicaid managed care programs. Spread pricing is when pharmacy benefit managers overbill the state or Medicaid managed care programs, under-reimburse pharmacies for medications dispensed, and retain the difference. A broad ban on Medicaid managed care spread pricing and a move to fair and transparent pharmacy reimbursement would save the federal government over $1 billion over the next 10 years, with states also saving hundreds of millions of dollars in Medicaid costs.
In addition to banning spread pricing, the Drug Transparency in Medicaid Act (H.R. 1613) would also require pharmacy reimbursements in all state Medicaid managed care programs to be at a rate of pharmacy’s average acquisition costs based on the National Average Drug Acquisition Cost survey plus the state’s Medicaid fee for service dispensing fee; limit payments to PBMs to solely administrative fees; and mandate NADAC reporting to the Centers for Medicare & Medicaid Services by all pharmacies participating in state Medicaid programs. This would allow reimbursements to reflect the true acquisition costs of prescription drugs in Medicaid plus a fair professional dispensing fee. The legislation was reintroduced by Reps. Buddy Carter (R-Ga.), Vicente Gonzalez (D-Texas), Rick Allen (R-Ga.), Jake Auchincloss (D-Mass.), Elise Stefanik (R-N.Y.), and Deborah Ross (D-N.C.).
“Through spread pricing in Medicaid alone, PBMs can hoard hundreds of millions of dollars each year. That this tactic hasn’t yet been banned is good for the mega-middlemen, but terrible for the beneficiaries and taxpayers left paying inflating prescription drug costs as a result,” said NCPA CEO B. Douglas Hoey, pharmacist, MBA. “This bipartisan bill would not only prohibit spread pricing, it would also see that pharmacies are paid in a way that would cover their dispensing costs. Community pharmacy owners are grateful the Drug Transparency in Medicaid Act has been reintroduced and that support for it is growing, and will continue working with Congress to get it across the finish line once and for all.”
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Founded in 1898, the National Community Pharmacists Association is the voice for the community pharmacist, representing over 19,400 pharmacies that employ nearly 240,000 individuals nationwide. Community pharmacies are rooted in the communities where they are located and are among America’s most accessible health care providers. To learn more, visit www.ncpa.org.
