Tools to Challenge Big Medicine: Establish Minimum Reimbursement Rates for Independent Pharmacies

The Problem

Related and in addition to spread pricing, PBMs have also been known to reimburse independent pharmacies less than the pharmacy’s costs of filling the patient’s prescription, sometimes reimbursing independent pharmacies less than the PBM’s own mail-order pharmacy. This makes it nearly impossible for independent pharmacies to make a profit and stay in business, and PBMs are only able to do this because of their concentrated power over pharmaceutical benefits.

The Solution

PBMs should not be able to reimburse pharmacies for less than the cost of fulfilling a prescription or dispensing a drug. This would ensure that independent pharmacies are paid fairly and able to compete on a level playing field.

In designing this policy, to prevent pharmacies from artificially inflating their costs to earn more revenue, the minimum reimbursement rates could use NADAC-plus pricing. This would tie pharmacy reimbursement rates to the National Average Drug Acquisition Cost (NADAC), a database of drug costs maintained by CMS, plus the state Medicaid plan’s dispensing fee or spread.