WVPA Update: January 9

There’s a growing trend of pharmacies that are being terminated from pharmacy networks by pharmacy benefit managers (PBMs) due to the pharmacy’s affiliation with providers who have been previously terminated from the PBM’s pharmacy network.

PBMs are targeting pharmacies that have relationships with terminated individuals or pharmacies. This means a pharmacy could be subject to termination if it has common ownership, hired employees, maintains officers, or directors, who have all been terminated from the pharmacy network. Due to this growing trend, it is more important than ever to take all PBM actions serious, including audits, investigations, terminations and even credentialing rejections.

As the calendar year ends, PBMs often review pharmacies that participate in their networks. Such review may include an evaluation of past audit performances or any past adverse action taken against the pharmacy, or such review might include requesting the pharmacy to undergo “re-credentialing.”

Pharmacies that are asked to undergo re-credentialing are often asked a series of questions associated with general ownership structure, location and hour information, business transactions, potential common ownership of other pharmacies, potential disciplinary action from State Board of Pharmacy or other PBMs, etc.

Recent enforcement actions over allegations regarding assisting pharmaceutical manufacturers to pay improper kickbacks to Medicare beneficiaries are not the only issues currently impacting Patient Assistance Programs (PAPs). PBMs are also taking an increasingly hard stance over the use of PAPs by specialty and retail pharmacies across the country.

Some PBM Provider Manuals include explicit terms and conditions regarding the use of financial hardship policies, but many are silent with regard to a patient’s use of third-party PAPs and the impact that may have on the pharmacy’s reimbursements. It is even less clear how PBMs will treat the use of a PAP that has been the subject of a settlement or enforce-ment action by the Department of Justice.

Pharmacies should be aware that PBMs will go as far as recouping the total amount of reimbursement on claims where proof of copayment collection cannot be adequately demonstrated. Failure to collect copayments, or to provide proof of collection, can also lead to immediate termination from a PBM’s network.

The Food and Drug Administration (FDA) issued warning letters to 15 companies selling cannabidiol (CBD) and published a revised Consumer Update broadly detailing its safety concerns regarding CBD products. In addition, the FDA is to provide an update on its progress towards developing a regulatory approach to CBD products.

Companies that received warning letters sold their products online in “interstate commerce.” The products sold include a wide range of CBD products including oils, creams, tinctures, capsules, dietary supplements, human foods (such as gummies and chocolates) and animal foods. The FDA focused its attention on companies that market CBD products with claims that the products cure, mitigate, treat or prevent diseases such as cancer, diabetes, opioid addiction, schizophrenia multiple sclerosis, autism, Crohon’s disease, depression and arthritis.

The FDA made it a point to emphasize that the CBD foods and dietary supplement products were in further violation of the Food, Drug and Cosmetic Act.