Legislators are taking notice of a growing imbalance in the relationship between small community pharmacies and the large pharmacy benefit manager corporations (PBMs) that control prescription drug benefits for many Floridians, and are working to correct it. That is good news for patients.
As a pharmacy owner, I am proud to say that good, old-fashioned, one-on-one service has not gone out of style, even in an era of rapid change. And surveys show customers value the personalized service they get from local pharmacists like those we employ, and trust their advice.
Ironically, the qualities that make community-based pharmacies valuable to our customers — small size and personalized attention — put us at a disadvantage when it comes to interactions with large PBMs. These corporations, hired by health plans, decide which medications a health plan will pay for and how much pharmacies will be reimbursed for dispensing those medications.
In recent years, the PBMs have grown larger and more powerful, to the point where some of their unchecked practices and bottom-line focus threaten the ability of small businesses such as ours to meet the needs of our patients.
Fortunately, legislation is moving through the Florida House and Senate that will address two of the biggest problems: a lack of transparency when it comes to pricing for generic drugs that directly affects our bottom line and patients (SB 1014 and HB 765); and unfair audit practices that penalize honest mistakes and take away staff time from patient care (SB 702 and HB 745).
PBMs use a pricing mechanism called maximum allowable cost (MAC) to determine how much they will reimburse pharmacies for dispensing generic drugs. However, there is no uniform method or criteria for establishing or updating the MAC lists, making it impossible for pharmacists to know our business costs in advance. For example, if we dispense a generic version of Lipitor or Boniva to a patient, we do not know how much the PBM will pay until the claim is processed. If the reimbursement is lower than what it cost us to acquire and dispense the drug, we lose money. Multiplied over thousands of prescription drug transactions, this becomes a significant threat to the viability of our ability to continue to serve our patients.
SB 1014 and HB 765 would require PBMs to publish the basis of their methodology and the sources used to determine MAC pricing. PBMs would also have to update their MAC lists every seven days and notify pharmacies of changes promptly.
Passage of this legislation will help pharmacies like ours anticipate our costs so we can run our businesses and serve our patients more efficiently.
SB 702 and HB 745 would require PBMs to follow some basic, common-sense standards when conducting pharmacy audits. These include providing one-week advance notice to good-standing pharmacies before conducting an audit so the pharmacy will have time to get staff prepared; not penalizing good-standing pharmacies by making them pay for typographical/clerical errors on a prescription; and allowing 10 days for pharmacists to produce documents to address any discrepancies that may arise during an audit, to name a few.
Our customers depend on us to be there for them when they need medication, a vaccine, a health screening or an over-the-counter remedy. And we want to continue to offer the quality care and personalized service they need. I support the enactment of these reforms, as it will help keep unfair PBM practices in check so we can focus our attention where it belongs — on our patients.
Vinod Mehra is the owner of Lutz Pharmacy in Lutz.