Pharmacy Benefit Managers (PBMs) have been known to conduct regular audits of pharmacies. One such audit includes an invoice reconciliation, or inventory audit, of the pharmacy. In a growing trend, we have seen PBMs place many expectations on the pharmacy’s ability to demonstrate it had sufficient inventory throughout a certain time frame. However, a common observation has been that many pharmacies have had difficulty meeting PBM expectations of producing purchase documentation, particularly where either the wholesaler has since closed or where the pharmacy purchased from another pharmacy.
As a result, pharmacies are highly encouraged to keep independent records of their purchase information for the period of time required under applicable State and Federal law, as well as under the relevant PBM terms and conditions. By keeping complete and accurate information related to its purchases, pharmacies can verify their purchase history through documentation independent from wholesalers, particularly where the wholesaler may close and be unable to provide purchase history upon request to the PBM, or where wholesalers may provide inaccurate information as a result of their own oversight.
In addition to this, PBMs have also required pharmacies to submit applicable “T3,” or pedigree information, when obtaining drug products during a pharmacy-to-pharmacy transfer or purchasing from a secondary or tertiary wholesaler. Some PBMs had previously accepted invoices and bank statements as proof that the pharmacy purchased medications via a pharmacy-to-pharmacy transfer. However, PBMs have recently upheld claims as discrepant when the pharmacy cannot provide pedigree information even when the pharmacy submits all other relevant documents.
We advise pharmacies that undergo any investigation or audit with a PBM to take proactive efforts to resolve discrepancies. If left unresolved, the PBM may take further action against the pharmacy. In our experience, it is of the utmost importance for pharmacies to keep an accurate accounting of wholesaler records and maintain an up-to-date inventory management system in the event of PBM audits and/or terminations.
How Frier Levitt Can Help
If your pharmacy is faced with inventory shortfalls during a PBM audit or investigation, please contact Frier Levitt to speak to an attorney today.
