PHARMACY ALERT: PBMs Steer Patients to PBM-Owned Pharmacies
In a recent trend, we have seen several PBMs deny pharmacies access to their networks – either through credentialing denials or terminations – following adverse audit findings to steer patients to use PBM-owed pharmacies. For example, when a PBM terminates a pharmacy and informs patients that the pharmacy is no longer an in-network provider, the PBM will often offer alternate pharmacies to service the patients. The alternate pharmacies are usually owned either directly or indirectly by the PBM. Additionally, many pharmacies who have been approached to be purchased by a PBM chain and do not accept the offer often report that they later face minor audit findings that eventually lead to termination from the affiliated PBM’s networks.
In a recent suit in the Middle District of Florida, a patient sued a PBM for forcing plan participants to use a subpar specialty pharmacy for specialty medications to further the PBM’s financial interest in the recommended pharmacy. The PBM engaged in a series of actions essentially mandating that all commercial specialty medication be filled exclusively by the PBM-owned pharmacy. The net result amounts to a de facto termination of pharmacies’ ability to service their specialty patients with the PBM’s benefits. The PBM’s attempt to create an exclusive specialty network constituted a violation of Florida network adequacy laws in addition to kickback laws (given the financial relationship between the PBM and the PBM-owned pharmacy).
This practice is especially prevalent for patients with chronic conditions that utilize specialty pharmacies. These network strategies have concentrated the market share for dispensing specialty drugs into the most significant, PBM-owned specialty pharmacies. In addition, these practices likely violate many states’ anti-patient steering laws, which prohibit PBM or insurer-owned or affiliated pharmacies from “steering” profitable prescriptions to their own affiliated PBM and insurance pharmacies. As PBMs force patients to use PBM-owned specialty, mail-order, or retail pharmacies, they are essentially limiting patient access to medications and taking away a patient’s option to continue working with pharmacists they trust and know the patient’s needs. Moreover, patients are often given a 30–90-day notice that if they do not switch to the PBM’s pharmacy, they will be required to pay a higher out-of-pocket cost, or their prescription will not be filled unless filled at one of the PBM’s pharmacies or mail order programs.
PBMs’ anticompetitive practices put independent pharmacies out of business and decrease the quality of care to minority and underserved communities where the neighborhood pharmacy may be the only health care provider for miles. Requiring a patient to find another pharmacy is an inconvenience to the patient and detrimentally impacts a pharmacy’s business. Therefore, it is of utmost importance for pharmacies to challenge any PBM practices that prevent patients from utilizing their pharmacy services.
Frier & Levitt has successfully challenged these PBM tactics by arguing that the practices violate any willing provider, network adequacy, patient steering, and anti-kickback laws. Our services range from drafting letters demanding entry into the PBM’s network, appealing the tantamount de facto termination, and formally requesting the state’s department of insurance to take steps to uphold the state law and utilize enforcement tools. If you have faced similar issues with your pharmacy, please contact a Frier Levitt attorney.