Has your reimbursement for compounds been drastically reduced by Prime Therapeutics following the transition from NCPDP 5.1 to D.0? Prime requires pharmacies to submit all compound ingredients at the point-of-sale (“POS”). Prime does not usually “reject” the ingredients identified at the POS. This may create the false impression that Prime has “accepted” and agreed to reimburse for such ingredients. However, Prime has not been paying compounders for all of the ingredients.
A review of the relevant contracts sheds light on the issue. Prime’s Pharmacy Manual unreasonably excludes certain compound items from reimbursement. For example, Prime states that it will not compensate for “any compound that contains ingredients not approved by the FDA”, as well as “various bulk chemical ingredients”. Therefore, Prime may not reimburse for many compound ingredients. This “FDA exclusion” from reimbursement by Prime is ridiculous because few if any compound bulk ingredients are “FDA approved”. And, most compounds contain bulk chemical ingredients. Prime’s “FDA exclusion” is commercially unreasonable.
As part of our ongoing crusade to assist independent pharmacies in curbing abusive PBM practices, we are motivated to legally challenge Prime’s improper compound reimbursement practice. A straightforward contractual dispute such as this typically lends itself to legal resolution by way of class action. However, Prime’s Manual contains an arbitration clause that expressly prohibits class actions. Thus, in order to vindicate your rights, we envision filing multiple individual arbitrations against Prime. Frier Levitt has been creative in establishing Alternative Fee Arrangements (“AFA”) with its pharmacy clients to ensure that all pharmacies may afford legal representation to vindicate their rights.
If you and your pharmacy colleagues are tired of absorbing the costs of essential compound ingredients for which you will not be reimbursed, we’d like to hear from you. Importantly, your Agreement with Prime contains a 1-year statute of limitations to file a demand for arbitration. Thus, it is essential that you act quickly to preserve your rights. Contact Frier Levitt today.
