Pharmacy Benefit Managers Contribute to the Growing Rate of Independent Pharmacy Closures, However, Pharmacies Can Fight Back

As another independent pharmacy closed its doors last week in Connecticut, the owner of the pharmacy identified that the rising costs of operations and direct and indirect remuneration (DIR) fees along with the decreasing reimbursement rates each year led to their closure.

Unfortunately, this has been the ill-fated result of many independent pharmacy owners throughout the country when Pharmacy Benefit Managers (PBM) are permitted to own the end-retailer, and a system of checks and balances to appropriately manage healthcare costs is broken. That said, some of the largest PBMs have been given the ability to require patients to go to their own PBM-affiliated pharmacy often reimbursing themselves exponentially more than independent pharmacies in addition to the PBMs’ ability to impose DIR fees which intrinsically diminishes independent pharmacy profits.

For example, in Connecticut, as of January 1, 2020, new legislation went into effect establishing major restrictions on DIR fees. The new law prohibits PBMs and insurance companies from forcing pharmacies to pay back any part of a claim that a PBM or insurance company has already paid. In addition, Connecticut’s law concerning pharmacy audits regulates how PBMs may perform audits. Among the various provisions is a requirement for the PBMs to provide a preliminary report and final report to a pharmacy being audited and allows the pharmacy to appeal the final report. The law also limits when a pharmacy can be subjected to a charge-back or recoupment, among other things. Finally, Connecticut law also requires PBM licensure, which, in conjunction with other existing PBM laws, helps provide support for regulatory oversight of PBMs in the state and can give an avenue to seek enforcement of these laws. If you know your rights, you may have the upper hand in the fight against PBMs to keep your pharmacy business alive.

How Frier Levitt Can Help
Frier Levitt has successfully worked with numerous independent pharmacies in offering a variety of services which are aimed at helping address and remediate these challenges faced by pharmacy owners. The firm utilizes federal and state laws to fight for pharmacies’ rights against PBMs’ predatory practices. If you are a pharmacy owner experiencing issues with a PBM in Connecticut, or in any other state, contact Frier Levitt today to speak to an attorney.

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