Legislative Reform: Opportunities for action at both state, federal levels on issues important to retail pharmacy
Momentum appears to be growing around several legislative and regulatory issues that are important to retail pharmacy, including pharmacy benefit management (PBM) reform at both the state and federal levels and preserving some of the functions that pharmacies added during the pandemic.
Even with a divided Congress presiding over the legislative branch in 2023, the industry is optimistic that the progress that has been made in these areas during the last few years can continue this year and beyond.
“The pharmacy issues are extremely bipartisan,” said Chris Krese, senior VP of congressional relations and communications at the National Association of Chain Drug Stores. “We find that these issues are broadly supported by Democrats, Republicans, and Independents alike, and we look forward to working with the Congress and with the administration to advance all these issues on a bipartisan basis.”
PBM reform remains high on the agenda for pharmacy associations, as retailers seek to preserve the ability for patients to patronize their local retail pharmacy and to have greater visibility into the pricing practices of these entities.
NACDS describes the legislative and regulatory issues it is tackling as the “access agenda,” which Krese defines as patients’ “ability to get the convenient and equitable access to pharmacies that they expect.”
“There are a host of policy issues that affect that,” he said. “Certainly, an issue that tops the list is pharmacy benefit manager reform.”
The industry in the last few years has seen significant progress on PBM reform but is continuing to press for more reforms, particularly around transparency and pricing practices, Krese said, while the current political climate favors this type of legislative and regulatory action.
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Independent pharmacy’s agenda
Retail pharmacy access is also a key focus of the National Community Pharmacists Association, said Anne Cassity, VP, federal and state government affairs at the association. “You saw how important patient access was, especially during COVID and the rollout of the vaccines,” she said.
PBMs have disrupted patient access to independent community pharmacies in particular, Cassity said. NCPA’s focus is to bring about changes in the pharmacy payment model that make it both more transparent and reflective of a drug’s actual acquisition cost. “You can't operate any business if you're getting paid below what you even acquired the product for — in this case, prescription medications,” she said.
One goal of the NCPA, Cassity said, is to reintroduce a bill called the Medicaid Managed Care Transparency Act, which was introduced in 2021 by Reps. Earl L. “Buddy” Carter (R-Ga.) and Vicente Gonzalez (D-Texas). The bill aims to prohibit “spread” pricing in all state Medicaid managed care programs and require that pharmacies be reimbursed at specific rate, such as the national average drug acquisition cost (NADAC), plus the state's current fee-for-service dispensing fee.
“Prescription drug prices are way too high,” said Carter, a pharmacist himself, when he introduced the legislation. “With this bill, we can radically decrease drug prices and put power back into the hands of the patients.”
While NCPA would like to see PBM reform take place at the national level, the association has been working with individual state governments on the issue during the past several years.
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Federal action on PBM reform
The U.S. Congress has also expressed bipartisan interest in addressing PBM reform, Krese pointed out.
“Legislators realize that they're going to be held accountable as to whether they could do things to improve their constituents’ way of life, and certainly their healthcare and their finances all figure into that,” said Krese. “PBM reform is a great way to get those things done.”
Last year Reps. Bruce Westerman (R-Ark.) and Anthony Gonzalez (R-Ohio) introduced the Fair Care Act of 2022, which included several provisions that would have addressed PBM pricing practices, including charging retroactive fees to pharmacies and requiring the U.S. Comptroller General to conduct a study on the role of PBMs in the pharmaceutical supply chain.
Sen. Chuck Grassley (R-Iowa), who has long advocated for PBM pricing transparency, last year joined with Sen. Maria Cantwell (D-Wash.) to introduce S.4293, the Pharmacy Benefit Manager Transparency Act of 2022, which the two said “sought to ban deceptive unfair pricing schemes, prohibit arbitrary claw backs of payments made to pharmacies, and require PBMs to report to the Federal Trade Commission how much money they make through spread pricing and pharmacy fees.”
The legislation won the support of the numerous industry trade groups, including NCPA, the American Pharmacists Association, the American Pharmacy Cooperative and the Iowa Pharmacy Association, plus some retail pharmacy operators, including Hy-Vee and Hartig Drug.
“That bill did gain a lot of traction, and we’re hoping to get it reintroduced, or something very similar reintroduced,” said Cassity. “Anything that brings transparency, whether it's in the commercial market or in the public market, is extraordinarily important.”
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Extension of the PREP Act
Another key focus of NACDS in the year ahead is to push for the Public Readiness and Emergency Preparedness Act (PREP Act) to be extended for pharmacy services. The PREP Act allows pharmacy technicians and interns to administer certain vaccines.
Krese said NACDS is pushing for the Pres. Biden administration to extend these pharmacy services until October of 2024.
“This is really important, because we are hearing more and more about the imminence of the public health emergency ending, and the move to commercialization for vaccines, and testing, and antivirals,” he said. “When those two things happen — the end of the public health emergency and the commercialization of these countermeasures — the PREP Act is going to end for pharmacy services. That’s going to impact patients, and it's going to impact pharmacies.”
For example, the PREP Act allows pharmacy technicians to provide flu vaccinations to adults. which most states otherwise do not allow. If pharmacy technicians are no longer allowed to give flu shots to adults that would be the equivalent of removing about 40% of the nation’s vaccination capacity, Krese said.
That will result in longer lines and longer wait times for patients seeking vaccines, and potentially the loss of access to vaccines for some patients in some locations.
“Plus, it’s just very difficult to plan a pharmacy workforce when you don't know a few months down the road what certain professionals in your pharmacies are going to be able to do or not do,” said Krese.
NACDS would like to see states replicate the PREP Act at the state level during the extended time that the PREP Act remains in effect, he said.
The recent confluence of flu, COVID and another virus, RSV, reinforce the need for these expanded services, Krese said. “I think a lot of policy makers unfortunately forget that you can’t just turn these services on and off.”
In addition, NACDS is also advocating for legislation at the federal level that would set up a reliable payment mechanism in Medicare for pandemic-related services.
“We had tremendous success in 2021 and 2022 in building support for this legislation,” said Krese. “What we need to do in this next Congress is get this over the goal line so we can make it a reality.”