Recently, a prominent national PBM made significant and severe adjustments to their Maximum Allowable Cost (MAC) rates for generic drugs. As a result, here in Iowa we have seen a staggering increase in our Underwater (paid less than it costs us to purchase) generic prescriptions. The week that this change is obvious in the graphic below.
The data shown above is for one of our pharmacies and represents the percentage of underwater generic prescription claims for each given week from December to January. All of our pharmacies show the same dramatic increase in underwater claims. However, this did not only happen in our pharmacies. It did not even just occur in our State. It has happened elsewhere around the United States as well, with the State of Arkansas taking a lead investigating this problem and taking actions. It is interesting to note that among the reported findings, the PBM in question, which also owns a chain of brick and mortar pharmacies, may actually be paying itself at a higher rate than they are paying independent pharmacies. If true, this anti-competitive behavior may prove a catalyst in the groundswell of bad press hitting the PBM industry.
Please take some time to view an interesting press conference held recently in Arkansas which outlines some of their findings. It is quite illuminating. Follow this link. The State of Iowa appears to be interested in beginning investigations in a manner similar to Arkansas. Other states are likely to follow if these findings hold up and new examples continue to be revealed.
Make no mistake, even if State and Federal legislators begin to take action now, it will be quite some time to reverse the negative actions that have and continue to jeopardize local independent pharmacies around the country. Hang on, as this might be an interesting ride.