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PHARMACY AUDIT ALERT: CVS Caremark Takes Aggressive Position Against Pharmacies for Purchases from “Unauthorized” Drug Distributors

In a recent but aggressive trend, CVS Caremark (Caremark) has begun to audit and subject pharmacies across the nation to recoupment for purchases from allegedly "unauthorized distributors."  Specifically, Caremark has taken the position against pharmacies that "only wholesalers for diabetic supplies that are Authorized Distributors by that manufacturer can be considered for credit." Caremark appears to rely upon a circulation that they issued in June 2016 titled "Audit Tips: Foreign...

Two States Enact PBM Licensure Requirements

Many states have enacted legislation to reform the business practices of the Pharmacy Benefit Manager (PBM) industry. For example, a number of states have enacted such laws as the Fair & Uniform Pharmacy Audits, PBM Regulation/Transparency, and Anti-Mandatory Mail Order. However, it appears that some states have required even more from PBMs—specifically, a state licensure requirement. Of note, both Kentucky and New Mexico have issued a new PBM licensure requirement...

PHARMACY ALERT: Express Scripts Subjects Pharmacies to Massive Recoupment and Termination for Purchases from Unauthorized Wholesale Drug Distributors

In a recent but aggressive trend, Express Scripts, Inc. (ESI) – the nation's largest Pharmacy Benefits Manager (PBM) – has begun auditing and recouping large sums of money from pharmacy providers stemming from drug purchases made from allegedly "unauthorized" wholesalers or distributors. Starting in or around June 2016, ESI began conducting extensive purchase verifications and imposing discrepancies on all claims for products not purchased from a wholesaler listed as an...

Generic Drug Companies Accused of Price Fixing in 20 States

In a civil complaint filed December 15, 2016, 20 State Attorneys General accused six generic drug companies, including Teva Pharmaceuticals and Mylan, of engaging in price-fixing schemes. The complaint alleges that the companies conspired to artificially inflate the prices of the antibiotic drug, doxycycline hyclate, and the diabetes drug, glyburide. The complaint asserts that these competing manufacturers' executives engaged in price fixing by agreeing on how much market share or to...

PBMs Wrongfully Increase Scrutiny of Pharmacies Due to “Gray Market” Diabetic Test Strip Suppliers

In the wake of the recent litigation involving Abbott Laboratories and "gray market" diabetic test strips, pharmacies are facing increased PBM scrutiny over their purchases from certain pharmaceutical distributors, including secondary wholesalers. On November 4, 2015, Abbott Laboratories won a court order barring certain pharmacies and distributors from selling what it claimed to be "gray market" versions of its diabetes test strips in the United States. In the litigation, Abbott...