Screen Shot 2018 02 24 at 8.23.52 AM copyKENTUCKY (2/24/18) – Kentucky Independent Pharmacists’ position on Senate Bill 5 is being bolstered by legislation being considered in a special session of the Arkansas state legislature. The Arkansas special session was triggered by alleged abuses by CVS Caremark acting as a Prescription Benefit Manager in Arkansas.

Some Kentucky pharmacists have suspected abuses by CVS Caremark when reimbursements for filling Medicaid prescriptions were slashed. The independent pharmacies were suddenly losing money filling prescriptions for plans managed by CVS Caremark.

The Arkansas case has developed far beyond the scope of the Kentucky pharmacists’ situation. In Arkansas, the Arkansas Pharmacy Association investigators claim that out of the 270 most prescribed and filled drugs, CVS Caremark was paying its CVS stores $60 more per prescription than it was paying independent pharmacies. These disclosures were made in an Feb. 21 APA press conference aired live on Facebook. The 30-minute video is on the association’s Facebook page and has been viewed 32,000 times.

The Arkansas independents claim to have found that CVS Caremark was reimbursing independents $28.27 for the prescription drug Abilify and paying CVS stores more than $500 for the same prescription.

APA independents also claim that they were paid $909 for the cancer drug Temodar and CVS payed themselves more than $3,900 for the same prescription.

Arkansas Lt. Gov. Tim Griffin spoke at the press conference in support of the legislation and said that markets need “a fair, level playing field” and that Arkansas did not have the transparency for a fair, level playing field. “We don’t have healthy competition” he said.

Members of the Kentucky Independent Pharmacists Alliance believe CVS is playing the same tricks in Kentucky as in Arkansas.

“The big retail pharmacies have huge advantages over independents because of purchasing power and product diversity,” said Dr. Gregg Henry, owner of Sacramento Pharmacy. “Now, the PBMs are using our tax dollars in administering the Medicaid Program to starve us out of business or buy us out at a ridiculously low rate; and, at the same time, give themselves huge payouts.”

APA members are reporting that they are getting buyout offers from CVS. One of the owners presented one of the letters on their Facebook page. CVS has denied misconduct through Arkansas media reporting.

Some Kentucky independents are also getting letters offering to buy them out referred to in a previous story.

The stakes are high.

In 2015, healthcare was reported to be approximately 17.1 percent of the Gross Domestic Product of the United States. That is the highest percentage of GDP in the world. France was No. 2 at 11.6 percent of GDP. Additionally, more is spent more per in the US per capita than any country in the world ($9,909 per person per year in 2015, according to CDC ).

The CDC also estimates that more than $320 billion (approximately $1,000 per person on average) will be spent on prescription drugs in 2018. Recent history indications are that government programs will pick up about 65 percent of this cost or about $208 billion.

Government agencies contract with companies called Prescription Benefit Managers to manage payment to 10s of thousands of pharmacies. PBMs have wide discrepancy of how much they reimburse individual pharmacies for each prescription filled.

Henry told SurfKY News that the reimbursement changes without notice; and, furthermore, the contract between a pharmacy and a PBM prohibits disclosure of what the pharmacy is reimbursed for filling any prescription.

The independent pharmacies argue that the PBMs operate without transparency or oversight and that some of the PBMs are giving unfair advantage to their own stores over their independent competition.

KIPA members also believe that SB5 will cure the ills of the system, said Dr. Brad Ashby, KIPA board member.

“We need public support for SB5,” Ashby said. “The big retail pharmacies are not on our side. There are billions of dollars in play here and they make the big political donations. We need the public to call the General Assembly at 1-800-372-7178 every day and tell all senators and all representative to support SB5. Independent pharmacies are key players in health care delivery especially in rural areas of Kentucky. Without this legislation or other government intervention, many independents will not be able to stay in business.”

Henry said that Sacramento Pharmacy remains strong and that he has no intention of selling or closing.

Ron Sanders
SurfKY News

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