In its continuing fight to reform Pharmacy Benefit Managers’ (“PBMs”) anti-competitive business practices against independent pharmacies, New York recently proposed an increased mandatory dispensing fee. Specifically, New York’s Governor, Kathy Hochul, is proposing to mandate a $10.18 “dispensing fee” for many of the prescriptions filled in New York.
Under the proposal, pharmacies would be entitled to the proposed dispensing fee as part of a package of regulations aimed at PBM reforms, the middle-man companies that process prescription drug claims on behalf of most health plans and patients. The proposed dispensing fee would be paid directly by the PBMs to pharmacies. Dispensing fees are a critical part of pharmacy operations as they are intended to capture some of the “hard costs” associated with dispensing prescription medications. These fees have become even more critical in light of the drastic decreases in reimbursement in recent years. PBMs currently pay dispensing fees under their existing contracts with pharmacies, but typically the amounts are nominal and often range no higher than $2 to $3, however, in many cases they are even lower. In fact, oftentimes PBMs will refuse to pay a dispensing fee altogether.
New York, along with several other states, has taken proactive steps to address the involvement of PBMs in the prescription drug marketplace. This includes the establishment of a Pharmacy Benefits Bureau in May of 2022.These efforts coincide with substantial efforts at the federal level, where Congress has been weighing significant legislation as well. The goal, through these legislative reform efforts, is to protect patients, consumers, and promote healthy competition in a marketplace where approximately 80% of the business is controlled by only three PBMs – Caremark, Express Scripts, and OptumRx.
Pharmacists and independent pharmacies are highly encouraged to provide commentary on these types of proposals to ensure they do not miss the opportunity to voice their concerns. Frier Levitt has experience preparing and submitting comments to various government agencies and can assist you with a submission. To participate in processes and opportunities like this, contact Frier Levitt.
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 (including in New York) 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 insight on dispensing fees. Contact us to speak with an attorney about how payors and pharmacies can leverage the various laws and protections afforded to such entities, including the important PBM laws in New York and how payors and pharmacies can be involved in the legislative rulemaking process.
