When it comes to reimbursements for generic prescription drugs, it may often seem like there's little rhyme or reason to what is paid. This is unfortunately the case for many independent pharmacies dealing with Pharmacy Benefit Managers (PBMs). PBMs, the third party entities that oversee the administrative side of Medicare's Part D plans, often reimburse independent pharmacies well below their cost in acquiring and dispensing generic prescription drugs. Considering generic prescription drugs account for 80% of drugs dispensed, underpayments can be a considerable blow to a pharmacy's bottom line. In an effort to hold PBMs accountable, Ohio Governor John Kasich recently signed into law a bill with amendments regulating how and when PBMs assign drug pricing.

The bill will require PBMs to do several things including:

  • Update their MAC price lists at least every 7 days
  • Give pharmacies basic MAC price appeal rights
  • Require PBMs to supply pharmacies with a current list of sources they used to calculate their MAC prices
  • Have drugs on the MAC price list commercially available for purchase
  • Disclose any discrepancy in MAC reimbursements to pharmacies (instead of just showing what is charged to plan sponsors)
  • Become licensed as third party administrators (TPAs) by the Ohio Dept. of Insurance

According to a study released by the Ohio Pharmacists Association (OPA) the bill should prevent many underpayments and especially help LTC pharmacies where MAC pricing is their most significant source of payment for prescription medications.

This legislation is a great accomplishment for independent pharmacies in Ohio, and it's not stopping there. California governor Jerry Brown also recently signed a bill that requires PBMs to update their MAC lists weekly and disclose the sources they used to create the lists. This is a great step forward towards making sure pharmacies receive fair reimbursements when caring for their patients.

On a national level, congressional representatives from Georgia and Iowa have introduced the MAC Transparency Act. You can urge your state representative to support the MAC Transparency Act by clicking here.