Over the past several years, Maximum Allowable Cost or “MAC” pricing has become especially prevalent in prescription drug reimbursement frameworks, and has evolved as a preferred method of reimbursement among pharmacy benefits managers. Generally speaking, the MAC price has been set by PBMs as the upper limit or maximum amount that a plan will pay for generic drugs and multisource brand name drugs. MAC prices have historically been challenged for their lack of transparency and lack of relationship to actual acquisition costs available to retail pharmacies.
Recently, there have been some legislative efforts to address these concerns. The MAC Transparency Act (H.R. 244), introduced in the House on January 9, 2015, and referred to the Subcommittee on Health on January 16, 2015, seeks to amend Medicare Part D to require, among other things, that any Prescription Drug Plan (PDP) sponsor disclose the “sources” used for making updates to the prescription drug pricing standard to participating pharmacies. The Bill also requires the PDP to establish appeal processes and dispute resolution mechanisms to resolve MAC prices that are below individual pharmacies’ acquisition costs for such drugs.
Most notably, the Bill requires any contract providing for a reimbursement standard with respect to a PDP to require the carrier to update Maximum Allowable Cost pricing at least once every seven days to reflect the market price of a drug accurately – a practice that will help eliminate the current practice of stalling pricing revisions and will aide in the provision of current and accurate information to pharmacies.
While action on the Federal Bill is still pending, some individual States have taken matters into their own hands, introducing and passing similar legislation to protect pharmacies and consumers from unethical pricing practices. Recently, Arkansas, California and Ohio have signed into law legislation that requires pharmacy benefits managers to update their Maximum Allowable Cost List at least once every seven days, and generally enact provisions aiming to increase consumer protection policies.
Pharmacies are encouraged to contact Frier Levitt in order to determine the rights they have with respect to pharmacy benefits manager practices and transparency under their State’s laws.
