Pharmacy direct and indirect remuneration fees not included in point-of-sale ‘negotiated rates,’ known as DIR pharmacy fees, have continued to rise at an unprecedented pace. This growth has impacted patient healthcare costs and the profitability of small business community pharmacies for many years. According to CMS, DIR fees applied against pharmacies involved in Medicare Part D Programs rose by 1,600% since 2015. The rise in cost is unsustainable for the community pharmacies that patients rely on for their Part D prescription medications.

The National Community Pharmacists Association (NCPA) filed a federal lawsuit against the Department of Health and Human Services regulations. The case, NCPA vs. BECERRA, argues that:

  1. The rule’s definition of “negotiated price” violates the plain language and intent of Congress when they passed legislation creating the Medicare Part D program.
  2. The rule is invalid as arbitrary and capricious and unsupported by substantial evidence.
  3. The Final Rule was not adopted through proper notice-and-comment rulemaking.

The complaint also presents an exception found in a provision of the Centers for Medicare & Medicaid Programs that specifies that all negotiated rates must include price discounts from network pharmacies, except for those contingent price concessions that cannot be reasonably calculated at the point of sale. PHSL will continue to monitor for outcomes of the NCPA lawsuit and any impact to Medicare Part D programs.




Posted: May 2021

COVID-19 Vaccine Administration

On January 31, 2020, the secretary of Health and Human Services (HHS), one of the agencies leading the federal government’s response to the COVID-19 pandemic, declared a public health emergency for the United States due to the 2019 novel coronavirus disease (COVID-19). Since then, various measures have been taken to help ensure the safety of the public. On March 12, 2021, the Public Readiness and Emergency Preparedness Act for Medical Countermeasures Against COVID-19 (PREP Act) was amended with the purpose of authorizing additional healthcare professionals to be eligible to administer the COVID-19 vaccines with a condition that these personnel meet all the required criteria for training, supervision, and other expectations.

Over the years, pharmacists have been established as the most accessible healthcare professional. For that reason, there has been a huge increase in immunization rates due to the accessibility of vaccination at pharmacies across the country. The PREP Act expanded its guidance, allowing not only pharmacists, but also pharmacy staff, to order and administer COVID-19 vaccinations and tests. HHS recognized that pharmacy interns and qualified pharmacy technicians can administer the COVID-19 vaccine, but they must meet certain requirements and provide their services under the supervision of a qualified pharmacist. If a qualified pharmacy technician works in a state with licensure and/or registration requirements, then they must be licensed and/or registered in accordance with the state requirement. If a pharmacy technician is working in a state without state licensure or registration requirements, then the qualified pharmacy technician must have a Certified Pharmacy Technician (CPhT) certification from either the Pharmacy Technician Certification Board (PTCB) or National Healthcareer Association (NHA). At this time, the Pennsylvania State Board of Pharmacy does not have any regulations for pharmacy technicians or any requirements for pharmacy technicians to register or obtain certification. To fulfill the PREP Act, pharmacy technicians in Pennsylvania must have a CPhT certification from either the PTCB or NHA. Additionally, there are specific COVID-19 administration requirements that must be met to immunize under the PREP Act:

  • The vaccination is ordered by the supervising qualified pharmacist who is readily and immediately available
    • In the case of a COVID-19 vaccine, the vaccination is ordered and administered according to Advisory Committee on Immunization Practices’ (ACIP) COVID-19 vaccine recommendation(s)
    • In the case of a childhood vaccine, the vaccination is ordered and administered according to ACIP’s standard immunization schedule
  • The state-authorized pharmacy intern or qualified pharmacy technician has completed a practical training program that is approved by the Accreditation Council for Pharmacy Education (ACPE), including hands-on injection technique and the recognition and treatment of emergency reactions to vaccines
  • The state-authorized pharmacy intern or qualified pharmacy technician has a current certificate in basic CPR
  • The state-authorized pharmacy intern or qualified pharmacy technician has completed two hours of ACPE-approved, immunization-related continuing pharmacy education during the relevant state licensing period(s)
  • The supervising qualified pharmacist must comply with any applicable requirements (or conditions of use) as set forth in the CDC’s COVID-19 vaccination provider agreement and any other federal requirements that apply to the administration of COVID-19 vaccine(s)

As millions of vaccine doses are being manufactured and distributed throughout the country, more locations and qualified healthcare personnel are needed to administer those vaccines. The Pennsylvania Health Department published a list of additional “qualified personnel” who can administer the COVID-19 vaccine under the PREP Act. As of February 9, 2021, under certain regulations, the following are authorized to administer COVID-19 vaccines: pharmacist, pharmacy intern, qualified pharmacy technician, certified nurse midwives, dentists, dental students, optometrists, optometry students, physician assistants, physician assistant students, podiatrists, podiatry students, respiratory therapists, respiratory therapy students, veterinarians, veterinary students, even recently retired professionals. The list is broken down by the type of license with the PA legal authority and when they are authorized to immunize. PHSL expects that other states have similar lists of authorized personnel.

Although this expansion of services is limited until the end of the COVID-19 pandemic, the pandemic has significantly impacted the healthcare system and how it operates by allowing different health professionals to administer not only the COVID-19 vaccine but also the testing. The addition and expansion of “qualified personnel” could impact how we will handle immunization administration in the future.


Posted: May 2021

Medicaid Drug Rebate Program Changes

Before covering the latest Medicaid Drug Rebate Program changes, let’s start with a brief review of the recent state and historical changes.

Prior to 2019:

The Medicaid Drug Rebate Program (aka OBRA 90 rebates) is a mandatory program for pharmaceutical manufacturers if they want their products covered under the Medicaid Program and requires participation in the 340B program.  The rebates are based on Average Manufacturer Price (AMP) as the starting point, but manufacturers must also report the Best Price.  Using AMP, Best Price, and the Consumer Price Index (CPI) adjustment a rebate, up to a maximum 100%, is calculated for a drug in a given month for Medicaid.  CMS calculates a unit rebate amount (URA) and provides it to the states.  The URA times the quantity dispensed for the product equals the rebate due from the manufacturer.

Limiting rebates to a maximum of 100% generated net brand costs that were less than generics when high or maximum CPI adjustment was included for Medicaid.


The authorized generic effects on the AMP, and ultimately on the Medicaid Rebates calculated with the CPI adjustment, was impactful to the market.  In 2019, prices for authorized generics were removed from the brand AMP calculations to increase the AMP and generate increased Medicaid Rebates. and

Preparing for 2024:

The American Rescue Plan Act of 2021 removes the maximum cap on Medicaid Rebates.  Beginning January 1, 2024, the rebate calculation will change, and all CPI adjustments will be included without a cap.  Therefore, a manufacturer of a brand drug with cumulative price increases that are greater than 76.9% of the CPI will be required to pay Medicaid plans for dispensing their drug, i.e., rebates will be greater than the price of the product.  Previously, these products were known as penny products in the 340B program, where the 340B price was equal to $0.01/unit.  Going forward in 2024, the manufacturer could be paying the 340B covered entity for using their product.  The pricing calculation timing lag means the late 2023 monthly sales will determine the January 2024 Medicaid rebates.


Expect manufacturers to re-evaluate their product portfolios for brands that approach or exceed the 100%+ Medicaid Rebate.  Multiple data points will be required to evaluate the impact, including the mix of business between Commercial, Medicare Part D, Medicaid, and other payors.  Options to reduce or avoid the expanded Medicaid Rebate focus on the brand AMP, which is impacted by price changes compared to the CPI and sales volume.  The other options are to halt sales for that brand product.  Will manufacturers adjust their pricing decisions with this upcoming change?


Posted: April 2021

Express Scripts Requires 340B Claim Identification

Express Scripts made a specific requirement for 340B contract pharmacies to identify 340B claims in the January 2021 Provider Manual.  Prior to 2021, pharmacies were requested to voluntarily identify 340B claims.  An additional method for pharmacy 340B claims reporting started on March 1, 2021 but is not clearly or completely described in the Frequently Asked Questions document on the Express Scripts website.  This requires using the NCPDP “N1” Information Reporting transaction, which is typically for Medicare Part D supplemental coverage information.  Pharmacy systems must be able to submit “N1” transactions, which are part of the version D.0 standard, to comply with Express Scripts’ requirement.

This requirement includes all members, regardless of prescription coverage plan, and is not limited to claims for Medicaid members.  Covered entities and pharmacies involved in the 340B program understand that manufacturers are not responsible for both Medicaid drug rebates and 340B discounts on a single dispensed drug.

According to the Frequently Asked Questions document, “This change was made in the spirit of greater transparency. It is not intended to lead to a change in reimbursement rates, network participation, or a pharmacy’s ability to service as a Contract Pharmacy for 340B Covered Entities.”

Express Scripts also notes that if the pharmacy identifies the 340B claim after submission, the pharmacy should update Express Scripts using the “N1” transaction within 10 business day of the identification.


Posted: April 2021

FDA Identifies “Essential Medicines” for U.S.

The previous White House administration enacted an executive order on August 6, 2020 instructing the FDA to curate an “essential medicines list” within 30 days. This order’s intent is to reduce the United States’ reliance on the global pharmaceutical supply and minimize the chance of a shortage for critical drugs. The FDA will work with major pharmaceutical suppliers to ensure that the United States can meet a minimum supply of these essential medications, as well as identify vulnerabilities in the pharmaceutical supply chain. Per the FDA, the goal of this campaign is to ensure that the American public is protected against foreign chemical, biological, radiological, and nuclear threats, as well as emerging infectious diseases.

After the executive order was put in place, the FDA developed a list of 227 drugs and biologic products deemed “essential”, focusing on those in the acute care setting. The FDA also added 96 medical devices to the list. These devices include vital monitoring devices, devices for managing acute diseases (such as ventilators), personal protective equipment, diagnostic testing kits, and other developmental supplies. The FDA followed a general guideline of including medicines that are commonly used for U.S. patients in acute care facilities and other urgent medical emergencies. The list focuses on medicines that must be available in adequate supply that can be used for the widest patient populations to have the largest potential impact on public health.

Once the FDA identified the medications and medical devices on the “essential medicines list”, the next action was to coordinate strategic plans to acquire supplies of these items. The government followed plans to accelerate domestic manufacturing of these items and address supply chain issues that could occur under extreme domestic or foreign uncertainty. A $354 million 4-year deal was struck with the Biomedical Advanced Research and Development Authority (BARDA) to immediately resolve the current drug shortages.  The deal also has an option to extend this into a $812 million 10-year deal to maintain supplies.  Many legislators have cited the United States’ dependence on outsourced medical supplies and the need to make these products domestically. Further legislative action is currently being discussed on Capitol Hill by members of both parties. A $500 million pilot program is currently in progress to support domestic production of medical supplies.

The United States’ reliance on foreign goods often allows Americans to get supplies far cheaper than if they were manufactured domestically. The main fear comes in times of uncertainty or diplomatic friction, as this may cause foreign countries to supply themselves with medical supplies and pharmaceutical drugs before selling to the United States. The United States has taken steps over the recent months towards creating a surplus of essential medications and devices. These simple actions will protect the health and longevity of the American public, even during times of crisis.


Posted: March 2021

National Prescription Drug Take Back Day April 2021

The spring National Prescription Drug Take Back Day is set to take place on April 24, 2021 from 10:00 am to 2:00 pm. This twice-yearly event is sponsored by the Drug Enforcement Administration (DEA), and it allows for individuals to turn in unwanted, unused, or expired prescription medications for free, both safely and anonymously. This program is valuable, as turning in prescription drugs can help to reduce medication misuse and overdose deaths. In fact, the 2018 National Survey on Drug Use and Health showed that a majority of abused prescription drugs were obtained from family and friends, often from the home medicine cabinet. So, this is a great opportunity to clean out your medicine cabinet and bring any of your unwanted, unused, or expired medications to one of the participating sites near you. Types of medications that are accepted include tablets, capsules, patches and other solid forms of prescription medication. Only liquid medications, needles, and sharps cannot be accepted as part of this event.

After having to cancel last year’s spring Take Back Day due to coronavirus concerns, the most recent Take Back Day took place in October 2020. During this event, the DEA collected nearly 1 million pounds of prescription medication, which was the highest amount ever collected in the program’s 10-year history.

To find a Prescription Drug Take Back Day collection site near you, please visit

If you are unable to attend the National Prescription Drug Take Back Day, you can dispose of your medications at a year-round pharmaceutical disposal location. Visit the US Drug Enforcement Administration Diversion Control Division at to locate a site near you.


Posted: March 2021

Arine’s Virtual Pharmacist Platform Seeks to Decrease Medication Errors

Arine offers a Virtual Pharmacist platform designed to ensure patient safety and reduce human medical error costs. The platform uses a clinical database to continuously identify and resolve drug therapy problems in a patient’s medication therapy regimen. The platform does this by gathering information about the patient, which includes EMR data, lab results, medical and pharmacy claims, quality and risk data, and data obtained from a tailored patient-facing questionnaire. Arine’s Virtual Pharmacist uses the patient information to generate automated medication recommendations based on the latest available clinical guidelines. The medication recommendations are sent out to all providers involved in the patient’s healthcare regimen via their preferred method of communication. The software also provides recommendations on how to lower costs based on a payer’s drug coverage criteria, while reducing out-of-pocket costs for patients. The Virtual Pharmacist checks with the providers to confirm implementation of the recommendations and has the capability to track its own results. The platform uses actual cost and utilization data to demonstrate ROI and measure the clinical and economic impact of the delivered recommendations.

Unlike a traditional pharmacist, the “Virtual Pharmacist” does not work with patients one-on-one.  Instead, Arine targets health systems, and. the Virtual Pharmacist platform allows for the information of thousands of patients to be easily retrieved and reviewed by healthcare professionals, all while continuously monitoring the information with its own clinical database for prescription optimization.

Desert Oasis Healthcare (DOHC) has already partnered with Arine in hopes of improving patient care and decreasing medication costs for their 60,000 members. The partnership provides pharmacists, nurses, physicians, and other care team members access to the Arine software platform. State Medicaid Agencies may also partner with Arine, and the Oklahoma Health Care Authority has expanded its medication optimization program in 2019. Clinical pharmacists can use Arine’s platform to improve services to SoonerCare (Oklahoma Medicaid) high-risk, high-cost members. Medication errors can cost over $20 billion annually, but hopefully with growing innovative technology like Arine’s Virtual Pharmacist platform, a cost reduction can be realized.


Posted: March 2021

Medicare Part D Plans Required to Support Electronic Prior Authorization

Regulations concerning the Medicare Prescription Drug Benefit program’s (Part D) e-prescribing requirement under the “Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act” or the “SUPPORT Act” will be put into practice.  These newly adopted standards for Part D e-prescribing will ensure secure electronic prior authorization (ePA) requests and response transmissions.

The SUPPORT Act authorizes the Centers for Medicare & Medicaid Services (CMS) to require ePA capability for processing prior authorization requests by Medicare Part D Plans for Part D-covered drugs prescribed to Part D-eligible individuals. (more…)

The Battle Continues Over 340B

In November, we published a post detailing how several drug manufacturers would no longer be providing 340B drug pricing to most contract pharmacies.  As we predicted, the Department of Health & Human Services (HHS) reacted to this move, issuing an eight-page advisory opinion on contract pharmacies under the 340B drug program.

This guidance was published on December 30th and can be found here.  Within the HHS publication, the Office of the General Counsel (OGC) reiterated that contract pharmacies are acting as agents of the covered entity.  Furthermore, HHS notes that “manufacturers’ rationale for precluding the use of contract pharmacies is not supported by the language of the statue and leads to absurd results.”  HHS concludes by saying that drug manufacturers are required to deliver covered outpatient drugs to contract pharmacies and charge covered entities no more than the 340B ceiling price for those drugs.

On January 12th, three manufacturers sued HHS over this advisory opinion, with each company filing a separate lawsuit.  The manufacturers claim that the advisory opinion contradicts the 340B program statues and does not require manufacturers to recognize contract pharmacies.  On the other side, the American Hospital Association (AHA) and similar groups have also sued HHS to get the agency to clamp down on these manufacturers.  Getting sued from both sides, HHS will likely act on this issue and defend themselves in court.  With the 340B program seeing exponential growth in the past decade, it was only a matter of time before this issue came to a head.  PHSL will continue to monitor the situation and provide updates.


Posted January 2021

Emergency Use Authorization (EUA) Product vs FDA-Approved Product

The COVID-19 pandemic prompted the rapid development of diagnostic testing products to identify patients with the virus and vaccines to protect patients from contracting the virus.  This rapid development created broad awareness of the FDA’s Emergency Use Authorization (EUA) authority to help protect the public in health emergencies.  The number of products that received EUA in 2020 appears to exceed the number of EUAs seen for Anthrax, Ebola, Zika, or other health crises prior to this pandemic. EUAs are needed because the typical approval process takes too much precious time, prolonging a public health emergency.  Looking forward to when these products receive FDA approval for non-emergency use, there are industry considerations to facilitate a smooth transition from utilizing EUA products to using FDA-approved products.

Currently, EUA tests and vaccines are provided free of charge.  However, it is likely that once the same product receives FDA approval for commercial use, pharmaceutical manufacturers will charge for these products.  Therefore, for the purposes of inventory tracking, patient profile management, and claims submission, it is important that EUA product does not become confused with the FDA-approved commercial product.

To accomplish that, manufacturers should obtain an NDC for the commercially approved product that is different than the NDC given to the EUA product.  The product code of the NDC (middle segment) and/or the package size identifier of the NDC (last segment) should change in a way that clearly distinguishes between the EUA and approved product.  National Council for Prescription Drug Programs (NCPDP) encourages manufacturers to obtain new NDCs in this situation.

Since the NDCs for EUA products are listed by the drug compendia with no associated cost, the new NDC can be listed with the cost determined by the manufacturer, without affecting the EUA NDC. Different NDCs will provide the means for proper claims submission, indicating the product that was utilized, and allows the healthcare provider to log the appropriate product on the patient’s profile.  This will also help to track and separate inventory of unapproved EUA products in the channel before and after FDA approval of the commercial product.

Lastly, and most important, obtaining a new NDC for approved commercial products will help ensure there is no delay or denial for vaccine administration because of confusion stemming from EUA and FDA-approved product represented by the same NDC.


Posted: December 2020