Recently throughout the country, Pharmacy Benefit Managers (“PBMs”) and issues concerning access to adequate pharmacy care have garnered greater attention both at the federal and state levels. This is due, at least in part, to lawmakers and their constituents gaining a better understanding of the role that PBMs play in healthcare, which includes managing the relationships between retail pharmacies (including independent retail pharmacies), pharmaceutical manufacturers, and health insurance plans.
In managing and administering the pharmacy networks that PBMs create, PBMs will often times create networks that are exclusive, or alternatively create terms and conditions of participation that give the PBM the right to arbitrarily deny or terminate a pharmacy’s participation in the network.
Such exclusivity in PBM networks along with the purported right to arbitrarily deny qualified pharmacy providers, including independent pharmacy providers, access to these networks carries the potential of significantly harming patients by depriving them of adequate access to their choice of pharmacies from which they can obtain their prescription medications. This concern is especially pronounced in areas that are established to be “pharmacy deserts,” which are areas with a limited number of pharmacies for patients to access—in fact, it was this type of concern that led to the Supreme Court case Rutledge v. PCMA.
In response to these concerns, many states have enacted laws that prohibit PBMs from arbitrarily denying pharmacies access into PBMs’ pharmacy networks or otherwise arbitrarily terminating their participation once admitted into the network. These laws have become known as, and are commonly referred to, as Any Willing Provider Laws (“AWPL”). A law that is considered to be an AWPL will typically require PBMs to admit any provider into their networks that meets the PBMs’ fair, reasonable, and relevant terms and conditions of participation in the networks. By prohibiting arbitrary and baseless denials or terminations, AWPLs tend to benefit patients, as well as independent pharmacy providers, by increasing patient access to care as well as overall choice by providing patients with a greater variety of providers from which to choose, including the provider of their choice. AWPLs can also foster healthy competition by limiting the ability of PBMs to steer patients towards their wholly owned and affiliated pharmacy operations including their large mail order, retail, and specialty pharmacy operations that patients might not otherwise prefer to use.
Examples of states that have enacted laws that have some of the hallmarks of an AWPL include New Jersey, Texas, Pennsylvania, Tennessee, and Louisiana. As independent pharmacies and pharmacists navigate the PBM landscape and work through the often unlevel playing field vis-a-vis PBMs, understanding your rights in your state, as well as at the federal level, is crucial to ensure that you are being treated fairly under both the contract that governs your relationship with a PBM as well as the applicable laws governing that contract.
How Frier Levitt Can Help
Frier Levitt represents thousands of pharmacies across the United States as well as various other life sciences and healthcare industry stakeholders with an emphasis on PBM issues and has successfully taken on some of the most troubling PBM tactics including improper PBM audit and recoupment practices, PBM network access issues, DIR fees, and PBM reimbursement issues. Our attorneys have extensive knowledge of all aspects of PBMs in terms of their relationships with payors and pharmacies, including extensive insight on AWPL. Contact us to speak with an attorney about how pharmacies can leverage the various laws and protections afforded to them.
