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Senators Ask OIG to Investigate PBM Industry

After the Senate Finance Committee's hearing (third in a series of hearings), "Drug Pricing in America: for Change," held on April 9, 2019, Senators Chuck Grassley and Ron Wyden wrote a letter to the Department of Health and Human Services' Office of Inspector General (OIG) alerting OIG that "increasing number of reports" raise concerns about how Pharmacy Benefit Managers (PBMs) are operating. In the letter, Senators Grassley and Wyden expressed...

Pharmacy ALERT: PSAO Pharmacy First Sends Notice of GER Deductions

Pharmacy Services Administrative Organization (PSAO) Pharmacy First is sending out a "Notice of GER Deductions" to pharmacies in its network advising that the pharmacy's reimbursements have been running in excess of the contracted Generic Effective Rate (GER) amount. The Notice warns the pharmacy that the monetary sum in excess of the contracted GER amount will be withheld. It is often the case that the pharmacy is without any knowledge of...

Plan Sponsor ALERT: New York Seeks To Eliminate PBM Spread Pricing

On April 1, 2019, New York legislators have passed new regulations eliminating "spread pricing" on prescription drugs within the Medicaid managed care system. Under "spread pricing" arrangements, PBMs bill the Plan Sponsor for the drug dispensed by the pharmacy more than the amount the PBM pays to the pharmacy. The difference is the "spread," which the PBM retains as revenue. Over the last few years, PBMs have been lowering pharmacies'...

The FDA Overhaul on Dietary Supplements

On February 11, 2019, the FDA announced that it will likely undertake a massive overhaul of the regulation of the dietary supplements. Congress passed the Dietary Supplement Health and Education ACT (DSHEA) in 1994 granting FDA an oversight of the dietary supplements. At the time, this only required minimal reporting and labeling from the manufacturers. Throughout the years, however, the dietary supplement industry has become a $40 billion market comprising...

DOJ Position on Off-Label Promotion: What’s Changed and What’s the Same

It is well known that the U.S. Food and Drug Administration (FDA) has long taken the position that a medical device or drug manufacturer who promotes any unapproved uses of FDA-approved devices/drugs is in violation of the Federal Food, Drug, and Cosmetic Act (FDCA). The FDA has asserted that off-label promotion leads to misbranding of the product and circumvention of the regulatory approval process that is taken to ensure product...