Pharmacies: Knowing Your Maximum Allowable Cost Rights Is More Crucial Than Ever

One of the greatest issues facing independent pharmacies throughout the United States is the issue of reimbursement from pharmacy benefit managers (PBMs). There are numerous ways in which PBMs dictate reimbursement to independent pharmacies which often results in pharmacies being reimbursed below their drug acquisition cost. PBMs also dictate pharmacy reimbursement to increase their own profit margins—one practice that has garnered more recent attention is “spread pricing,” a practice where PBMs reimburse a pharmacy one price for a drug but collect a higher amount from the plan sponsor and retain the difference. Maximum Allowable Cost (MAC) is one of the primary methods by which a PBM effectuates spread pricing.

MAC pricing is distinct from other pricing benchmarks used in pharmacy as both MAC prices and MAC lists are created by PBMs and unilaterally deemed by PBMs to be proprietary and confidential. Thus, PBM MAC prices and MAC lists are often cloaked in secrecy and avoid public scrutiny. There are numerous issues with how PBMs create their MAC lists and set MAC prices including which drugs are placed on a MAC list and the MAC price for the plan sponsor versus the MAC price for the pharmacy. PBMs often create two separate MAC lists, one for the plan sponsor and one for the pharmacy—however, the plan sponsor is not permitted to see the pharmacy MAC list and vice versa.

Fortunately, there are currently 36 states that have passed some form of law governing PBM MAC pricing. Among the various rights that pharmacies have under these laws is the right to appeal PBM MAC pricing. However, these laws often provide rights that go far beyond just appealing MAC pricing—many laws also regulate what drugs can be put on a MAC list in the first instance. Pharmacies must utilize these laws not only to pursue MAC appeals where appropriate but also to challenge PBMs when they include drugs on their MAC lists that do not meet the requirements established by law to be included on a MAC list.

How Frier Levitt Can Help

Frier Levitt represents pharmacies across the United States in challenging PBM audits, network access, reimbursement practices and has extensive knowledge on all aspects of PBM MAC pricing and MAC reimbursement. Contact Frier Levitt today to speak with an attorney about how your pharmacy can leverage the various laws and protections afforded to pharmacies regarding Maximum Allowable Cost.