Over 90% of independent pharmacy owners worry the program would severely hurt their finances, one survey reported.
Reporter: Maia Anderson
Independent pharmacies are sounding the alarm on Medicare Part D’s drug price negotiation program.
The program, created under the 2022 Inflation Reduction Act (IRA), lets the Centers for Medicare and Medicaid Services (CMS) work with drugmakers to set lower costs for select Part D drugs in hopes of lowering healthcare costs for patients.
But up to 93.2% of independent pharmacy owners said they either will no longer carry Part D drugs or are considering not carrying them, as owners anticipate the negotiation program would “cause massive financial losses,” according to a survey of 8,000 pharmacy owners and managers conducted by the the National Community Pharmacists Association (NCPA), a trade group representing the nation’s roughly 19,000 independent pharmacies.
How it works. Under the current payment model, pharmacies pay drug wholesalers for medications, then pharmacy benefit managers (PBMs) reimburse the pharmacies a previously agreed-upon amount for each claim covered by a customer’s health insurance plan. It usually takes about 14 days for PBM reimbursement to reach pharmacies, according to Hauser.
Under the new model, pharmacies will still pay wholesalers the same price to buy the drugs, but PBMs will reimburse pharmacies based on the updated negotiated prices, Ronna Hauser, SVP of policy and pharmacy affairs at NCPA, told Healthcare Brew. The negotiated drug prices are anywhere from 38% to 79% lower than the original list prices, according to the White House.
Drugmakers will then make up the difference. For example, if a pharmacy spends $500 to buy a drug, a PBM may pay the pharmacy $200, and then the drugmaker would reimburse the other $300 in the form of a manufacturer refund.
The new rules state drugmakers are required to reimburse pharmacies within 14 days of receiving confirmation that a prescription was dispensed to a Part D beneficiary, according to CMS. But pharmacy owners are concerned it will take longer as the new payment system gets set up, Hauser said.
In effect, pharmacies find themselves having “to float thousands of dollars every month waiting for refunds from the manufacturers,” NCPA CEO B. Douglas Hoey warned in a statement.
“I don’t have the cash flow or the financial stability to be able to ride those expensive drugs for that length of time,” Bill Osborn, president of independent pharmacy Osborn Drugs in Oklahoma, as well as president of the Oklahoma Pharmacists Association, told Healthcare Brew. “My question is, why are they not charging us up front the rebate price? Why are they making us carry it when we are the least financially viable?”
Osborn, who used to serve as NCPA’s president, is among those considering not stocking Part D drugs in his pharmacies, he said, which could lead to some patients in his community being unable to receive their prescriptions... CONTINUE READING
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