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Plan Sponsor ALERT: Reverse Auction Procedure Does Not Protect States from PBM Abuse

In September 2018, New Jersey Governor Phil Murphy announced that the State of New Jersey awarded the Pharmacy Benefit Manager (PBM) contract to OptumRx and agreed to pay OptumRx $6.7 billion over three years to manage and administer pharmacy benefits for the State. Although "reverse auction" is a step in the right direction, such procedure is meaningless unless Plan Sponsors implement contractual tools that protect themselves from PBMs' revenue tactics...

Pharmacy ALERT: Prime Therapeutics Raises Its Standards on Off-Label Claims

Recently, Prime Therapeutics (Prime) announced that its member pharmacies should only dispense prescriptions with dosage strengths and routes of administration that are consistent with manufacturer prescribing information. Prime also now further requires that the pharmacies should anticipate providing scientific evidence demonstrating the efficacy and safety of the prescriptions. Such onerous document requests by Pharmacy Benefit Managers (PBMs) have been prevalent with respect to Medicare Part D claims. In fact, it...

Frier Levitt Saves Texas-Based Pharmacy over $1.6 Million in PBM Audit

Frier Levitt successfully saved over $1.6 Million for an independent pharmacy located in Texas against a desktop-audit conducted by a major Pharmacy Benefit Manager (PBM). The PBM claimed several different discrepancies, including inventory shortfalls, missing prescriptions, and failure to collect copays. The total amount of chargeback based on the alleged discrepancies was approximately $1.9 Million. Attorney Dae Y. Lee, Pharm.D., Esq., CPBS, conducted an extensive review of the alleged discrepancies...

Manufacturer ALERT: False Claims Act Violation for Selling Unapproved Medical Devices

On September 13, 2019, Manhattan U.S. Attorney for the Southern District of New York announced that the Government has simultaneously filed and settled a civil fraud lawsuit under the False Claims Act against Avalign Technologies, Inc. (Avalign) and its subsidiary, Instrumed International, Inc. (Instrumed), for manufacturing and selling medical devices that were not cleared by the U.S. Food and Drug Administration (FDA.) As part of the settlement, Avalign and Instrumed...

Plan Sponsor ALERT: PBMs “Double-Dipping” on Audit Fees from Pharmacies and Plan Sponsors

Millions of Americans across the country are employed by public-sector entities and other self-funded employers, insurers, and managed healthcare organizations (collectively "Plan Sponsors"), who often turn to Pharmacy Benefit Managers (PBMs) for the administration and management of pharmacy benefits. PBMs are tasked, among other things, with maintaining a network of pharmacies and monitoring the pharmacies' claims through various mechanisms, ranging from routine pharmacy audits to Fraud, Waste, and Abuse (FWA)...