FARMFRANKFORT, Ky. (7/17/19) — “Burn the Barn Down” is the advice of one independent pharmacist speaking of how various Kentucky agencies and insurance companies use “middlemen” to manage health care reimbursements (payments to pharmacies and health care providers). Senate Bill 5 passed by the Kentucky General Assembly made some headway to “patch up” the system.

Pharmacists say the law has been ignored by the middlemen.

Few will argue the fact that the system is expensive and complicated. This was made clear in a July 8 meeting of the Medicaid Oversight and Advisory Committee of the Kentucky General Assembly. Don Kupper, president of KPhA and a pharmacist, testified before the committee that “Kentucky pharmacies are still not being adequately and fairly reimbursed.”

It is also clear to the people of Kentucky. In one recent example, a husband and wife filled prescriptions for the same medication, on the same day and from the same pharmacy. The wife paid three times as much as the husband per milligram.

Several states have “burned the barn down” and built a new barn. These states have abandoned using PBMs. Others have patched their barn and others like Kentucky are still evaluating. Six states reported more that $865 million healthcare dollars lost to spread pricing including Kentucky, Ohio, New York, Pennsylvania, and Michigan.

In testimony before the Oversight Committee, Independent pharmacists pointed out that West Virginia “burned their barn” and are saving $54 million per year; plus, $120 million is now going to West Virginia pharmacies — not middlemen.

An analysis by the Columbus Dispatch concluded, “No matter what laws and regulations are changed, as long as pharmacy benefit managers control Ohio Medicaid’s $3 billion drug-pricing mechanism, it will be difficult to make sure that both Ohio taxpayers and pharmacies are getting a good deal.” So, burn the barn down!

A March 21, 2019 press release from Kentucky Attorney General Andy Beshear announced that he was investigating “Inflated Prescription Drug Prices”. This would have to be a probe that would investigate illegal activity.

A July 12, 2019 press release said that Beshear was requesting additional funds to hire more attorneys to investigate the pharmacy benefit managers. The additional attorneys will be hired through a RFP or request for proposals, “competitive bid process will result in his office hiring additional resources in the most efficient manner, where the winning bidder receives no upfront state tax dollars and attorneys are only paid a set portion of any monies awarded in a civil action.”

Beshear added in the press release “We all want to know if the actions of these companies have resulted in all of us paying too much for prescription drugs — and we’re going to find out.” 

The press release noted that “a report released by the state earlier this year indicated two PBMs kept $123.5 million last year from the state Medicaid program by paying pharmacies a lower rate to fill prescriptions than they charged the state for the same drugs.” 

Independent pharmacists claim that the middlemen have not complied with SB5 or mandates from Kentucky Department for Medicaid Services, which among other things required PBMs to return to April pricing to reimburse Kentucky pharmacies. 

Dr. Gregg Henry, an independent pharmacist in Sacramento, said working with the PBMs is a nightmare.

“We never know what we're going to get reimbursed for filling a prescription since it might change from prescription to prescription, day to day, week to week, or month to month,” Henry said.

DMS under Gov. Matt Bevin is suggesting many changes to the contracts for Managed Care Operators and Pharmacy Benefit Managers in addition to SB5. However, these changes would not take effect until 2020.

In the meantime, independent pharmacies say: With this much smoke, there must be a fire. They would prefer the smoke come from “burning down the barn,” instead of tax dollars going up in smoke.

Ron Sanders
SurfKY News

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