NCPA urges CMS to tighten PBM reform rules

ALEXANDRIA, Va. – The National Community Pharmacists Association is urging the Centers for Medicare & Medicaid Services to adopt clear, enforceable regulations as it implements the landmark pharmacy benefit manager reform law enacted earlier this year.

In comments submitted to CMS this week, NCPA outlined recommendations for defining PBMs, establishing how they should be compensated under Medicare Part D, and ensuring that independent community and long-term care pharmacies receive reimbursement that reflects their actual costs.

“The rulemaking process is critical because that’s where the rubber meets the road,” NCPA president and CEO B. Douglas Hoey said. “CMS is writing the rules that will implement what Congress intended when it passed PBM reform. We know the PBMs will try to have loopholes inserted into the rules, so we are working with CMS to ensure the rules are clear and tight.”

CMS requested stakeholder feedback as it develops regulations for PBM compensation under the new law.

Among its recommendations, NCPA said PBMs should be defined by the functions they perform rather than by their corporate structure, arguing that affiliated entities providing PBM services should also be subject to the law’s requirements.

The association also reiterated its support for requiring PBMs to receive a fixed administrative fee for managing Medicare Part D benefits, rather than compensation tied to drug rebates or list prices. According to NCPA, the current system creates financial incentives that can contribute to higher drug costs.

NCPA further urged CMS to require PBMs to reimburse independent pharmacies based on the pharmacies’ actual drug acquisition costs, plus an objective dispensing fee and payment for pharmacist-provided professional services. The association argued that current reimbursement methodologies rely on PBM-established formulas that are often opaque.

“This is a chance to restore PBMs to their original purpose, which is to help make the prescription payments easier for employers, unions, and patients,” Hoey said. “They were never intended to control every aspect of patient care, including overruling the medical decisions of doctors and pharmacists.”

Hoey added that increased consolidation and vertical integration have enabled PBMs to expand their market power while squeezing independent pharmacies and other health care providers.

CMS is expected to issue additional requests for information as it continues to develop regulations, including guidance on implementing Congress’ requirement to define and enforce “reasonable and relevant” contract terms between PBMs and pharmacies.

NCPA said it plans to continue working with CMS throughout the rulemaking process as the agency finalizes implementation of the new law.