Express Scripts Audits Resulting from Repackaging
Are You the Victim of an Express Scripts Audit Resulting from Repackaging?
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Repackaging is the process by which a business (sometimes referred to as a repackaging company) purchases a brand name drug in bulk from a manufacturer and repackages the drug typically into smaller units.
Thereafter, the repackaging company markets the drug to pharmacies under its own company name and assigns the repackaged drug a new NDC number, the repackager’s AWP value, and the repackager’s WAC value. The FDA permits businesses to repackage and distribute prescription drugs under a different label than the actual manufacturer so long as the repackaging company is registered with the FDA.
Over the past several months, Frier & Levitt has received several inquiries from pharmacies across the United States regarding Express Scripts, Inc.’s abusive audit practice with regard to repackaged prescription drugs, particularly in connection with claims submitted on behalf of TRICARE Beneficiaries (a department of defense health plan administered by ESI). ESI is auditing pharmacies several months (or years) after paying these pharmacies for the repackaged product, and seeking to recover money for these repackaged product claims that: (a) are expressly approved in the plan sponsor’s formulary, (b) have already been electronically accepted by ESI at the point-of-sale, and (c) have already been paid for by ESI.
Importantly, ESI’s Network Provider Manual does not expressly prohibit a pharmacy from billing for a repackaged product. Rather, the Manual states, “ESI may not reimburse a Pharmacy, or may reduce reimbursement, for repackaged products submitted with a higher AWP than the original manufacturer’s product, in its sole discretion and on a case-by-case basis.” (Emphasis added.)
When ESI agrees, at the point-of-sale, to pay your pharmacy a certain price for a known and approved repackaged product on the plan sponsor’s formulary, ESI is determining in that case (and on a case-by-case basis), to approve the claim and pay the agreed price for the repackaged drug. ESI confirms the point-of-sale transaction again within days through the remittance advice, form 835.
In addition, a couple weeks later when ESI sends your pharmacy a check paying you the agreed price (at the point-of-sale), ESI is reaffirming, on a case-by-case basis, its decision to pay your pharmacy for the repackaged product. It is unreasonable and, in our opinion, a breach of the Provider Agreement, for ESI to attempt to recover money from your pharmacy some several months or years after agreeing to pay your pharmacy at the point-of-sale and, in fact, paying your pharmacy for the repackaged product.
Contact Us
If your pharmacy has been victimized by an ESI audit seeking to recover monies based on an approved repackaged product, we want to hear from you.
Please contact Frier & Levitt, LLC toll-free at 1-888-Levitt-1 (i.e., 1-888-538-4881), or visit our website at http://www.pbmauditlawyers.com/.