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A new front has emerged in the battle over fees charged by pharmacy benefit managers. As Congress continues to scrutinize the industry, a pharmacy trade group has formed a new entity to investigate PBM practices.
The National Community Pharmacists Association announced that it will establish Trust LLC to investigate the use of direct and indirect remuneration (DIR) fees on behalf of community pharmacies. Trust also will litigate or arbitrate for the pharmacies if necessary. The NCPA has argued that these fees constitute an antitrust violation and have deprived pharmacies of large sums of money.
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"PBMs shouldn't be able to make assessing junk DIR fees against competing pharmacies a multibillion dollar cottage industry that puts their competition out of business and compromises patient care," said B. Douglas Hoey, the association's CEO. "It's completely anti-competitive, and we're fighting back."
The news comes just weeks after an Iowa pharmacy filed a class action lawsuit filed against vertically consolidated CVS Health, Caremark and Aetna that aims to recoup for independent pharmacies millions of dollars in what the lawyers say are wrongful backend penalties for Medicare Part D prescriptions. The NCPA applauded the legal action.
"It's payback time," Hoey said. ""Finally, community pharmacies have a chance to recover DIR fees that were unfairly taken. PBMs have been gaming the system for a long time, and it's time to turn the tables."
Trust has retained the law firms Berger Montague, Cohen & Gresser LLP and Baker Donelson to lead any litigation. The two firms also are the lead attorneys in the class-action suit against Caremark.
"These companies have nearly unlimited resources, and it's almost impossible for a single independent pharmacy to fight them alone," Hoey said. "The way the contracts are set up, arbitration for claims like these can top $1 million for a single pharmacy."
Related: Will new Senate bill curb the power of the PBMs – and drive down drug costs?
The NCPA represents more than 19,400 pharmacies that employ nearly 240,000 individuals nationwide. Hoey said DIR fees have risen by more than 107,400% in recent years, a trend that is driving many community pharmacies to the brink of insolvency.
"NCPA's efforts allow independent pharmacies to assign their claims to Trust LLC to fight the PBMs together," he said. "It's still not an even playing field, but we have a much better chance of getting justice if we join forces."
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
