Increasingly, States are enacting such anti-discrimination measures, which are also
known as any-willing-provider (AWP) provisions. A federal district court in Oklahoma
recently blessed such a provision, see PCMA v. Mulready, 598 F. Supp. 3d 1200, 1207-08
(W.D. Okla. 2022); the Attorney General of Michigan signed onto an amicus curiae brief
expressing the view that ERISA does not preempt such a provision, see Br. of 34 States
and the District of Columbia as Amici Curiae, No. 22-6074 (10th Cir. filed Oct. 18, 2022);
and the United States government filed a brief taking a similar position that State AWP
provisions are not preempted by ERISA as applied directly to third-party PBMs, see Br.
of United States as Amicus Curiae, PCMA v. Mulready, No. 22-6074 (10th Cir. filed Apr. 10,
2023). Thus, there is explicit authority for promulgating such a requirement.
In addition, the Director should promulgate regulations providing that PBMs may
not reimburse an affiliated pharmacy more than an unaffiliated pharmacy that operates
in the same network as the affiliated pharmacy—whether standard or preferred.
Otherwise, PBMs have engaged in discriminatory reimbursement practices that have
forced the closure of independent pharmacies. As noted above, CVS Caremark has
reimbursed CVS pharmacies five times more than independent pharmacies. Linette Lopez,
What CVS is doing to mom-and-pop pharmacies in the US will make your blood boil, Business
Insider, Mar. 30, 2018. Adding insult to injury, after under-reimbursing independent
pharmacies CVS sent letters to pharmacists in Arkansas and Ohio stating that selling their
businesses to CVS was an “attractive and practical option” in the face of “declining
reimbursements.” Id. (linking to CVS letter).
Finally, the Director should promulgate regulations providing that PBMs may not
charge enrollees different copayment or cost sharing amounts at un-affiliated pharmacies
than the PBM charges at affiliated pharmacies within the same network—whether
standard or preferred. PBMs have otherwise used the discriminatory practices to steer
patients to their own pharmacies—which often charge higher fees to the health plans the
PBMs purport to serve.
E.
Regulations Further Defining Maximum Allowable Cost
Section 27 regulates how PBMs may use maximum allowable cost (MAC) lists to
reimburse pharmacies for generic drugs. Section 7(c) defines maximum allowable cost to
mean “the maximum amount that a pharmacy benefit manager will reimburse a network
pharmacy for the ingredient cost for a generic drug.” Together, the purpose behind these
provisions is to ensure that PBMs employ a fair process for reimbursing pharmacies for
generic drugs.
Unfortunately, when faced with similar provisions in other jurisdictions, PBMs
have engaged in a game of semantics, calling their MAC lists something else, and then
claiming that a given State’s laws no longer applied. For that reason, States like Arkansas
have been forced to re-define the term MAC to ensure that PBMs cannot evade the
purpose of MAC-based legislation, which is to ensure a fair process for reimbursing
pharmacies for dispending generic drugs. See Ark. Code § 17-92-507(a)(1)(A) & (B).
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