Performing Compounding May Lead to a Battle with PBMs

Here are some suggestions on how to avoid being terminated from the PBM network:

The number of compounding pharmacies is on the rise because of the profitability of compound prescription reimbursement received from cash paying customers. Often, a pharmacy owner will own two pharmacies, one in-network and a second out-of-network pharmacy to do the compounding. The out-of-network pharmacy can avoid the reduced PBM reimbursement for compounding because the cash paying customer will pay more than the Pharmacy Benefits Manager (PBM).

PBMs have addressed this issue by amending their agreements to require that pharmacies fill compound prescriptions with the in-network pharmacy when such pharmacy is “affiliated” with an out-of-network compounding pharmacy. The term “affiliated” is rarely defined by the PBM. Nevertheless, PBMs threaten the in-network pharmacy with termination from the network if it refuses to fill compound prescriptions at the in-network store. Obviously the in-network reimbursement rate for the compound often barely compensates the pharmacy for the cost of ingredients. Owning two pharmacies can be legitimate and following basic ground rules may increase the chances of successfully maintaining two stores.

If your in-network pharmacy is being threatened with termination from a PBM’s network, contact Frier Levitt today.

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