When a consumer fills a prescription at an independent retail pharmacy, whether through an insurer, a self-insured employer, or a government agency (Plan Sponsors), the claim for that prescription is invariably managed by pharmacy benefit managers (PBMs). PBMs, amongst other things, oversee the reimbursements to pharmacies for prescriptions administered through a prescription plan. PBMs decide how much reimbursement pharmacies receive for the prescriptions they fill by setting the maximum allowable cost (MAC).
The power of PBMs has become concentrated through mergers and acquisitions. Today, three PBMs administer almost 80% of the Plan Sponsored prescription drug transactions. One of the largest PBMs is OptumRx (formerly known as Catamaran), administers 1.2 billon prescriptions each year resulting in annual revenues in excess of $60 billion.
Independent community pharmacies are often at the mercy of PBMs, who manipulate the MAC price at will. Changes to a MAC directly affect the amount a pharmacy is reimbursed for a filled prescription. If wholesale prices increase, but the PBM does not timely adjust reimbursement rates, pharmacies will lose money on the prescriptions they sell.
Over 450 independent retail pharmacies nationwide have banded together, with the help of Mark Cuker, one of the experienced litigation attorneys at the Jacobs Law Group, and brought arbitration and federal court actions against OptumRx claiming it unreasonably set low reimbursement rates, based on irrelevant, inapplicable, or outdated pricing information. The suits claim that OptumRX has acted in bad faith and breached its contracts with the independent pharmacies by:
- Consistently paying MAC prices below the pharmacy’s costs
- Failing to timely raise MAC where the wholesale costs of a given prescription drug have risen, while quickly lowering the MAC where the wholesale prices decreased
- Denying pharmacies MAC appeals in bad faith
- Paying generic drug prices to pharmacies while billing insurance plans brand prices
- Paying their own mail order operations better prices then they pay independent pharmacies
Independent retail pharmacies involved in these actions have claimed that OptumRx’s bad faith and lack of transparency effectively have placed their businesses and ability to serve their patients at risk. Indeed, some community pharmacies have been forced to go out of business leaving their patients without a choice of pharmacy providers and without the individualized and personal attention that independent neighborhood pharmacies are known to provide to their customers.
Since we filed these cases, more and more independent pharmacies have contacted us about taking action against PBMs. If you believe that your independent retail pharmacy has also been harmed by OptumRx’s reimbursement practices, please contact Mark Cuker of the Jacobs Law Group, who has over 30 years of experience protecting small businesses such as independent retail pharmacies, from unfair trade practices of larger companies.