Introduction
Independent pharmacies operate on razor-thin margins, making volume a critical factor in sustaining operations and profitability. One of the primary ways pharmacies have expanded their reach is by offering mailing and delivery services to patients, enabling them to compete more effectively in an evolving healthcare landscape and increasing the number of patients they can serve.
However, most Pharmacy Benefit Manager (PBM) networks are structured as “retail pharmacy networks,” rather than “mail order networks.” As a result, PBMs have historically placed restrictions on pharmacies that seek to provide mailing and delivery services.
The COVID-19 pandemic dramatically reshaped attitudes toward pharmacy mailing. During the Public Health Emergency (PHE), several PBMs implemented waivers explicitly allowing pharmacies to mail prescriptions without penalty. Beyond that, consumer expectations changed significantly—people now expect everything, from food to groceries to medications, to be delivered directly to their homes.
With the expiration of the PHE in May 2024, however, PBMs have reasserted control over how pharmacy mailing is treated, renewing the focus on mailing operations, and creating new challenges for independent providers.
PBM Treatment in Pharmacy Manuals
PBMs vary widely in their policies on pharmacy mailing, creating a complex landscape for independent providers to navigate. While some PBMs impose outright bans, others set narrow permissions for mailing, and place restrictive limitations requiring pharmacies to focus greatly on their business practices.
Complete Prohibition – Some PBMs explicitly prohibit mailing under retail pharmacy contracts, effectively forcing pharmacies to either stop mailing or seek alternative ways to serve patients.
- Mailing Caps – Certain PBMs permit mailing, but impose strict percentage-based limits (e.g., no more than 20% of claims can involve mailing). Exceeding these limits may result in a forced contract reclassification, leading to different reimbursement structures.
- Local Delivery – Some PBMs allow limited delivery services but restrict the method, often requiring that deliveries be made only by W-2 pharmacy employees. This excludes third-party couriers and postal services, adding logistical and financial strain.
- Silence on the Issue – In some cases, PBMs have remained ambiguous in their contracts or in practice, failing to clearly address whether mailing is permitted. This lack of transparency can create uncertainty for independent pharmacies attempting to remain compliant while serving patients.
Mail Order Pharmacy Networks
As part of their efforts to regulate pharmacy mailing, some PBMs have developed designated mail order pharmacy networks. While these networks generally allow pharmacies to mail prescriptions to patients, they also often impose rigorous credentialing requirements, including pharmacy licensure in all 50 states, multiple accreditations (such as URAC or ACHC), and enhanced operational capacity to handle an excessively high volume of prescriptions each week.
Despite these onerous admission requirements, participation in mail order networks does not necessarily guarantee profitability or access. Many of these networks offer lower reimbursement rates than traditional retail pharmacy networks. What’s worse, just because a pharmacy has gained admission to a mail order network still does not mean the pharmacy will be permitted to service the patient. Several PBMs may exclude pharmacies from servicing patients in certain plans, such as Medicaid managed care plans, that ostensibly do not have a mail order benefit.
Meanwhile, other PBMs may claim not to maintain a formal mail order network at all. Instead, they grant exclusive mailing privileges to their own affiliated pharmacies, effectively shutting independent pharmacies out of the market. Independent providers are often told that no mail order pharmacy network exists—yet PBM-owned mail order facilities continue to fill and ship prescriptions under the benefit.
Recent PBM Trends
In recent months, a number of PBMs have taken aggressive actions against pharmacies engaged in mailing, employing a variety of strategies to enforce restrictive policies:
- Cease and Desist Notices – Some PBMs have issued formal notices warning pharmacies to halt mailing practices or risk contract termination.
- Audits and Recoupments – Certain PBMs have initiated audits to identify mailed prescriptions and seek recoupment of payments. In some cases, this effort is driven by specific plan sponsors, rather than the PBM itself, focusing only on claims from that sponsor’s plan.
- Contract Terminations – PBMs have sought to remove pharmacies from retail networks altogether if they are found to be engaging in mailing.
- Operational Scrutiny – Some PBMs have focused less on mailing itself and more on the operational aspects of a pharmacy’s mailing practices, such as increased demands for enhanced proof of delivery and receipt, and investigations into why a pharmacy is filling prescriptions from patients in multiple states.
These enforcement actions create an unpredictable and challenging environment for independent pharmacies, particularly those that have invested in mailing infrastructure to better serve their patients.
Tools Available to Combat PBMs’ Actions
Despite PBMs’ efforts to restrict pharmacy mailing, independent pharmacies have legal tools at their disposal to push back:
- State Laws Prohibiting PBM Mailing Restrictions – Some states, such as Texas, have enacted laws explicitly barring PBMs from prohibiting pharmacies from mailing prescriptions to patients.
- Any Willing Provider (AWP) Laws – Many states have AWP laws requiring PBMs to allow qualified pharmacies to participate in their networks, preventing the exclusion of independent providers from mail order services.
- Network Adequacy and Patient Choice Laws – Additional state regulations exist to ensure that patients have access to a sufficient number of pharmacy providers, as well as the right to choose their preferred pharmacy. These laws can provide a basis for challenging PBM-imposed restrictions on mailing.
Conclusion
The landscape of pharmacy mailing has undergone significant shifts in recent years, and PBMs have responded by tightening restrictions and increasing enforcement efforts. Independent pharmacies must navigate a complex and often opaque regulatory environment, balancing the need to expand patient access with the risk of PBM penalties.
While PBMs continue to impose hurdles, independent pharmacies are not without recourse. State laws and legal frameworks exist to challenge unfair restrictions, and pharmacies must remain vigilant in advocating for their right to serve patients through mailing and delivery services. As the industry evolves, ongoing engagement with policymakers and legal experts will be crucial in ensuring fair treatment for independent pharmacy providers.
At Frier Levitt, we are committed to supporting independent pharmacies in navigating these complex challenges posed by PBMs. Our team of experienced attorneys is dedicated to defending pharmacies against unjust PBM practices and ensuring their continued ability to serve their communities. If your pharmacy is experiencing mailing issues or other adverse PBM-related actions, we are here to help. Contact us today to speak to an attorney.
