Generic drug prices spike, but PBMs' reimbursement rates don't keep up, NCPA study finds

ALEXANDRIA, Va. — A survey of more than 1,000 independent pharmacists finds that acquisition costs for generic drugs have spiked by as much as 1,000% this year.

The survey, conducted by the National Community Pharmacists Association, said that patients were paying more for drugs and often going without them, particularly Medicare and Medicaid patients, and many patients are declining medications due to increased co-pays. Higher co-pays and larger charges to drug plans also are pushing seniors into the "donut hole" coverage gap of Medicare.

"Once generic drugs become available, lower costs typically follow, and community pharmacists are leading the way to maximize the savings for patients and health plans from the proper use of generics," NCPA CEO B. Douglas Hoey said. "However, pharmacy acquisition costs for more and more generic drugs are rising in rapid, breathtaking fashion. This is having a negative impact on a number of patients, particularly Medicare beneficiaries. Meanwhile, reimbursement from pharmacy benefit managers is not keeping up, leaving pharmacists out in the cold and putting patient access to pharmacist care on unsustainable footing."

According to the survey, 77% of pharmacists reported 26 or more instances of a large upswing in a generic drug's acquisition price over the past six months, while 86% said it took the PBM or another third-party payer from two to six months to update its reimbursement rate, but it was not done retroactively. In addition, 84% said the acquisition price spike and lagging reimbursement trend has a "very significant" effect on their ability to remain in business to continue serving patients. In some cases, pharmacists were faced with having to refrain from filling prescriptions that would have caused them to lose up to $100 or more per prescription.

Generic drugs most frequently cited included the blood pressure drug benazepril; the antidepressant clomipramine; the heart rate drug digoxin; the psychiatric drug divalproex; the asthma drug budesonide; the pain drug morphine and many others. The report noted that the causes of the price increase are uncertain.

"In an era of instant communication, it is indefensible for PBMs to wait weeks or even months before updating their payment benchmarks in the wake of these price spikes without ever reimbursing pharmacies retroactively," Hoey said. "Pharmacists' appeals to PBMs to update payment rates are consistently denied or ignored. This situation is untenable for small business community pharmacies, and we urge PBMs to update their reimbursements."