PHSI’s David Schuetz Named NCPDP Work Group 2 Product Review & Billing Unit Exception Task Group Co-Lead

PHSI’s Senior Consultant David Schuetz will be an NCPDP WG 2 Product Review & Billing Unit Exception Task Group Co-Lead.

Work Group 2 Product Identification

This work group deals with issues relating to the identification of drugs and health related products within NCPDP’s stated mission. Identification consists of how the product is billed (billing units, package size designations), product identification systems, and any type of descriptive data which serves to uniquely identify a product with the intent to establish standards for product identification such that there is no ambiguity in distinguishing one product from another.

Product Review and Billing Unit Exception Task Group

This task group will review and analyze all drugs that are exceptions to the Billing Unit Standard (BUS) to determine how each should be categorized for billing and document within the BUS. Package Size discrepancies among the compendia will also be addressed. They will request submission of QUIC forms when appropriate and will review all QUIC Forms received prior to the WG meetings.

Dave is one of the numerous volunteers that contribute each year to the development of NCPDP’s standards and provide direction to pharmaceutical manufacturers as they plan to launch new products.  We congratulate him and wish him well in this leadership role.


Posted November 2019

Payer/PBM Owned Specialty Pharmacies…The Next Frontier for 340B

340B eligible hospitals and health systems have realized that many of their patients are not allowed access to their specialty pharmacies, due to plan sponsors (employers/health plans/PBMs) having an exclusive arrangement with the plan sponsors’ specialty pharmacies. To resolve this issue, 340B covered entities are now partnering with the big PBM/payer-owned specialty pharmacies; in exchange, the 340B covered entity adds these specialty pharmacies as a contract pharmacy in their 340B network.

Due to the economic incentives provided to 340B covered entities to support underserved patients, specialty pharmacies within their 340B network stand to make more margin than they may from typical commercial plan reimbursements. The 340B covered entities obtain access to discounted specialty pharmaceuticals and increase pharmaceutical manufacturers’ exposure to 340B discounts. These arrangements have grown dramatically in the last three years.

While more commercial and Medicare Part D lives fall within the 340B program, pharmaceutical manufacturers are heavily discounting more medications AND paying formulary rebates.  This raises the question: how many commercial PBMs/payers are sending rebate claims for patients that are treated at pharmacies within the 340B covered entity network?  While most pharmaceutical manufacturer agreements require commercial payers to exclude 340B prescriptions from their rebate submissions, identifying these claims can be difficult.  If these claims are not identified correctly, pharma will be double dipped, providing discounted medications and paying rebates.

Pharmaceutical manufacturers’ 340B discounts are exploding.  The high cost of specialty drugs and the discounts required through the 340B program provide an incentive for the hospital, pharmacy, and PBM/payer to want more of these types of pharmacy claims.  As a result, pharmaceutical manufacturers are going to respond to declining revenue and specialty medication profitability by increasing prices on existing medications and factoring these increases into specialty medication launch prices.

The current NCPDP claim standard would allow PBMs and payers to require that the covered entity’s facility ID, prescriber’s NPI, and pharmacy’s NCPDP number be submitted during the claims adjudication process to triangulate whether a claim is associated with the 340B program. These same data elements should be included in the rebate claims submission files sent to pharmaceutical manufacturers.  Industry stakeholders should address the shortcomings of the 340B program to help ensure this program does not excessively enrich covered entities, pharmacies, and PBMs/payers, but rather supports patients who cannot afford adequate insurance coverage.


Posted: November 2019

October Drug Take-Back Day

Mark your calendars for the 18th National Prescription Drug Take-Back Day on October 26th, 2019 from 10am-2pm! In 2018, 9.9 million Americans misused prescription pain medications, most often taking medications from a family member. This event is an opportunity for people to safely and easily return unused or unwanted medications to help prevent these substances from getting into the wrong hands.

There are exceptions to what medications can be returned. Do not bring illicit drugs, such as marijuana, heroin, or LSD. Insulin syringes and inhalers are also not accepted at take back locations, due to an unintended puncture or possible explosion risk.

Accepted medications include prescription medications, over-the-counter medications, supplements, and herbals in tablet, capsule, ointment, or patch form. Liquid medications may not be accepted at all locations. Removing personally identifiable information on prescription bottles is recommended but is not required.

Visit to find a location site near you and learn more about Drug Take-Back Day.

If you cannot make it to the scheduled event, use the DEA’s collection site locator to find approved disposal locations in your area year-round.


Posted October 2019

New Medicaid Rebate Law

Excluding Authorized Generics from Brand Drug AMP Calculations Increasing Medicaid Rebate Costs for Pharma

The Fair and Accurate Medicaid Pricing Act has been signed into law and will impact Medicaid Rebates paid by pharmaceutical manufacturers.  The Act eliminates the inclusion of less expensive Authorized Generic pricing in the calculation of the Brand drugs Average Manufacturer Price (AMP), which is the basis for Medicaid Rebates.  Now, Brand drug manufacturers will not be able to lower the AMP price by including Authorized Generic sales.  The AMP for Brand drugs will be solely based on the Brand drug sales increasing the brand manufacturer’s rebate costs.

PHSI previously described the OIG report that identified this potential change here:

Brand Drugs without Authorized Generics will not see changes to the current Medicaid Rebates.  Future plans for Authorized Generic launches may be impacted by this regulatory change.


Posted October 2019

2019 World Pharmacists Day

According to the International Pharmaceutical Federation (FIP), September 25, 2019 is World Pharmacists Day and is themed, “Safe and effective medicines for all”.  As a pharmacist-led consulting firm, PHSI focuses on the business of pharmacy and sees both great challenges and great opportunities for the future of pharmacy.  We celebrate this World Pharmacists Day with pharmacists from across the world.


Posted: September 2019

A Comparison of Direct Patient Care Services in Large Chain Pharmacies

In an era of dwindling prescription reimbursements and high brand drug costs, community pharmacies nationwide are actively expanding their clinical and direct patient care services to both supplement traditional prescription revenue and to meet the ever-increasing demand for affordable, reliable, and easily accessible patient care.

Three key competitors in chain pharmacy, Rite Aid, CVS, and Walgreens have made significant investment into developing and integrating in-store clinical services. How do the clinical services offered, and accessibility compare between these clinics?  There is significant overlap in the services offered and the base services at all three clinics include:

  • Treatment for common conditions like flu, colds, strep throat, and earaches
  • Treatment of common digestive ailments
  • Point of care testing
  • Smoking cessation programs
  • Vaccinations (either in clinic or at the pharmacy)
  • Physicals

Rite Aid launched RediClinic in 2005 and has since expanded to more than 60 operating locations, mostly in Philadelphia Rite Aid locations and partnered H-E-B grocery stores in Texas. In addition to the base services offered, RediClinic offers medically supervised weight loss and lifestyle modification services certified by the American College of Preventive Medicine (ACPM). RediClinic also provides cosmetic consultations for Latisse, Lustra, and Vaniqa.

RediClinic is staffed by nurse practitioners and physicians assistants to serve patients. RediClinics have begun incorporating new virtual health care in the form of RediClinic Express.  RediClinic Express is a video kiosk with integrated testing devices, staffed by a trained medical assistant. RediClinic Express locations are open longer hours and can connect patients to licensed physicians within the InTouch health network.  Appointments may be scheduled online, but walk-in appointments are also welcome.  Most RediClinic services, excluding vaccinations and physicals, are offered through their Express locations. Resulting prescriptions can then be sent directly to Rite Aid Pharmacy or the patients’ pharmacy of choice. Telemedicine prescribing is limited to non-controlled substances.

CVS’s Minute Clinic boasts 1,100 operating clinics with similar base services. In addition to in-store visits, CVS offers telemedicine services via smart phone or computer.  Telemedicine appointments can be made at any time and done from a patient’s home, but telemedicine services are limited to minor conditions, as no direct testing can be performed; prescribing is limited to non-controlled substances.

CVS recently announced a planned expansion of their Minute Clinics in several U.S. cities to include a HealthHUB at 1,500 CVS Pharmacy locations by 2021.  These HealthHUBs will offer expanded services and include a full blood lab, licensed nutritionists, physicians, yoga studios, expanded pharmacy services, smoking cessation programs, women’s health services, and chronic disease state management for type II diabetes, hypertension, and high cholesterol.

Walgreens Healthcare Clinic provides the standard base walk-in services and several chronic disease state management services at 400 metropolitan locations nationwide. On-site clinics are generally staffed by physicians’ assistants and nurse practitioners.  Telemedicine services are offered 24/7 either over the phone or through video chat, with a similar range of services as CVS. No testing is available via telemedicine. Telemedicine services provide patients with access to licensed physicians, with prescribing being limited to non-controlled substances.

All three companies offer their services for a similar price point depending on insurance coverage. Most major insurers are accepted at all locations. CVS and Walgreens also offer flat-rate cash pricing of $59 for telemedicine services for those without medical coverage.

As the race to assert dominance in the community clinic market intensifies, these companies will continue to add unique specialties and services to attract more patients. The questions remain, how do these clinics compare in market standings, and how will they attract patients? CVS currently leads the competition due its vast number of operational facilities and ambitious plans for expansion tied to its recent Aetna acquisition, which would allow for in-network coverage at Minute Clinic facilities. Walgreens comes in second, having several hundred clinics currently operating and a partnership with Humana which could include a similar in-network coverage deal at Walgreens Healthcare Clinics. However, Rite Aid, though lacking a third-party health plan/health insurer affiliation, has potential to disrupt the niche marked for telemedicine with its novel RediClinic approach. This strategy is dependent upon gaining access to payer networks.  Change in access to healthcare is here and whether the pharmacy chains will be able to modify consumer behavior accessing medical services in their locations will ultimately determine the strategies success or failure.


Posted: August 2019

Update: Mandating Price Reporting in Prescription Drug Advertisements

In May 2019, PHSI published a blog discussing the Department of Health and Human Services (HHS) agreement to move forward with one of the initiatives of the Trump Administration’s “American Patients First” blueprint. Part of the “American Patients First” initiative  would require drug manufacturers to report list prices on prescription drug advertisements, in hopes that this would result in lower drug prices and reduced out-of-pocket costs for patients.

In June, drug manufacturers Merck, Eli Lilly, and Amgen sued the government to block this regulation. The companies argued that the rule violated their First Amendment rights.  They noted that listing the price of drugs in advertisements could confuse consumers, because the list price is often not what patients pay after insurance coverage.

In early July, a U.S. District Court Judge ruled in favor of the drug companies, stating that HHS had overstepped its authority.  According to Congress, the HHS has no regulatory power to make drug manufacturers report the cost of drugs in advertisements. What comes next is uncertain, but it is expected that the Trump Administration and HHS will evaluate options to make this information available to patients.   It may take a new law to require manufacturers to post these prices.  However, some manufacturers have produced advertisements with this information. We will update you as new information becomes available.

Link to original blog:


Posted: August 2019

Medicaid Rebates and the Impact of Authorized Generics

Excluding Authorized Generics from Brand Drug AMP Calculations

The Office of Inspector General (OIG) published a review in April 2019 assessing how excluding authorized generics from average manufacturer price (AMP) calculations would impact Medicaid drug rebates. This review was prompted by a 2017 HHS Budget Brief, which stated that excluding authorized generics could save Medicaid about $20 million per year. Through this review, the OIG found that actual savings were about 30 times this prediction.

Under the Affordable Care Act (ACA), the sales of an authorized generic drug from the brand manufacturer to a secondary manufacturer (i.e., the generic labeler or distributor) were explicitly allowed in AMP calculation only after the implementation of the statutory definition of “wholesaler.” Under the rule, the sale of AGs to secondary manufacturers should be included in AMP, if the secondary manufacturer is “acting as a wholesaler for drugs distributed to retail community pharmacies.”    This had a huge impact on Medicaid drug rebate amounts because the resulting smaller AMP reduced the rebates paid to Medicaid.

The OIG reviewed nine brand name drugs that included authorized generic drugs to secondary manufacturers in their AMP calculations. The manufacturers of these nine brand name drugs transferred the authorized generic to a secondary manufacturer and included the transfer price of the authorized generic in the AMP calculation of the brand name drug.  After the manufacturers provided AMP data for each drug, OIG verified the data, removed the authorized generic transactions, and then recalculated the AMP.  The OIG analysis concluded that if Medicaid had calculated AMP excluding authorized generics to secondary manufacturers, Medicaid would have received 46% more in rebates for these nine brand name drugs, amounting to $595 million for the calendar year 2017.

The OIG recommends that the CMS seek legislative change to exclude authorized generic drug transactions to secondary manufacturers from the AMP calculation of the brand name drug, as this was shown to increase manufacturer Medicaid rebate obligations.  CMS agreed with the OIG recommendation; the President’s Fiscal Year 2020 Budget includes a legislative proposal to clarify authorized generic drug sales under the Medicaid Drug Rebate Program.

To read the full OIG review, visit


Posted June 2019


Update: New Medicaid Rebate Law

Cannabidiol (CBD) Oil in Pharmacy

At the end of March 2019, CVS and Walgreens announced that they will start selling over the counter topical products containing CBD in specific states only, due to the legalization of CBD in those states. Cannabidiol, better known by the abbreviation CBD, is one of the most talked about ingredients today. CBD is a non-psychoactive compound or cannabinoid found in the cannabis plant. THC, the psychoactive cannabinoid, is also found in the cannabis plant and responsible for the “high” associated with marijuana. Since CBD is non-psychoactive, it will not give the euphoric “high” that THC exhibits.

CBD can be extracted from marijuana or hemp. Under the 2018 Farm Bill, hemp is defined as a THC less than 0.3% and is considered legal by the federal government. However, some states include CBD under the definition of marijuana. In these states, CBD may be illegal or considered medical marijuana, limiting its distribution and sales. There is only one FDA approved CBD containing product, Epidiolex, for the treatment of seizures in patients with Lennox-Gastaut syndrome or Dravet syndrome who are at least 2 years old. While Epidiolex is the only agent FDA approved, there are many CBD containing products in the marketplace. There are a wide variety of proposed uses for CBD oil including anxiety, arthritis, cancer pain, acne, Alzheimer’s, and smoking cessation. Trials for nearly 100 different indications are currently taking place.

An overwhelming amount of companies are producing CBD containing products, so knowing how to select a quality product is essential in the market today. Some factors to consider include extraction technique, where the hemp was grown, third-party testing with published lab results, and price. Companies that provide products grown in the USA, extracted by carbon dioxide, and include published testing results should be better quality products. Popular forms of CBD oil include oral capsules, tinctures for sublingual use, lotions, ointments, and vape pens. If ingesting CBD, some common side effects include dry mouth, diarrhea, vomiting, decreased appetite, weight loss, somnolence, drowsiness, fatigue, and elevated liver enzymes. There are drug-drug interactions and drug- herbal interactions if taking CBD oil orally.  Knowing about the product and its possible interactions is important for safe use. Patients should talk to a health care professional if considering using CBD products to determine safety.

Of note: The FDA is sending warning letters to companies that claim any of their CBD products are intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease. While there are proposed benefits, CBD only has the legally approved use for the treatment of seizures in Lennox-Gastaut syndrome or Dravet syndrome.  FDA does not support CBD as a dietary supplement.

Below depicts a map of medical marijuana use by state:




Posted: June 2019

Three Prescribing and Dispensing Steps Impacted by the Drug Compendia

The electronic drug record is becoming more important with each drug approval and launch.  Most drug records remain static because the prominent attributes of a drug product (active ingredient, dosage form, route of administration, and strength) do not change.

The static nature of the drug listing can lead to unwanted consequences for a drug product.  These are the 3 areas that are most impacted by the drug compendia listing.

  1. Prescribing – Electronic prescribing continues to grow. To create a new electronic prescription, prescribers need to perform an “alpha” search for the intended product utilizing the drug compendia data in the EMR/EHR system.  Issues arise when the prescriber needs to differentiate between multiple dosage forms or delivery devices for a product.  Challenges can occur when a system limits the number of characters displayed and does not permit an accurate depiction of the product, which is needed for proper selection.  Consequently, prescriptions are not being written for the intended drug due to difficulty selecting the product electronically.
  1. Product selection at the pharmacy – The prescription is written for a brand and the pharmacy system prompts the pharmacy staff to use a generic product option for dispensing. This is generally business as usual in retail pharmacies but may not be appropriate in the case of a brand that is a line extension placed in the same classification (GPI or GCN) as the original brand.  In this case, the generics available may only be substitutable, or A-rated, to the original brand.  The issue is that the generics are not bioequivalent or therapeutically equivalent to the brand line extension, and the pharmacy system did not take that into account when it displayed the substitution options.  Consequently, prescriptions are lost due to the lack of a unique classification for the brand line extension.
  1. Product dispensing and reimbursement – The product is packaged as a 2-pack, which is intended to be the entire prescribed therapy. Issues occur when the technician and pharmacist mistakenly believe only one should be dispensed and the package is broken instead of dispensing it as a unit.  The pharmacy would be overpaid for the product if the PBM reimburses the pharmacy at the package price.  The patient would require a refill but be told it is too soon for the insurance to cover it and could be forced to pay cash.  If the remaining 1-pack is not dispensed again, it could expire and be returned to the manufacturer.  The consequences include pharmacy partners experiencing payment, inventory, patient therapy and outcomes issues, and increased returns processing.


Each of these issues can be avoided.  Through forecasting the drug compendia listings and identifying potential challenges before they happen; actions can be taken to avoid or mitigate challenges.

Contact PHSI today to discuss your drug compendia concerns and challenges.  PHSI will review the drug and collaborate on communications with the drug compendia to document the proposed vision.  The optimal time to consider this review is prior to product approval and launch.

PHSI offers many services regarding the drug compendiaContact PHSI with your drug compendia questions!


Posted: May 2019