NCPA Commends Inclusion of PBM Transparency Provision in Proposed Rule for Health Insurance Exchanges

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Alexandria, Va. - July 11, 2011

Included in the Health Insurance Exchange rule proposed today by the U.S. Department of Health and Human Services (HHS), is language reaffirming the need for pharmacy benefit managers (PBMs) operating in the exchanges to confidentially disclose to the health plan and HHS Secretary information regarding controversial PBM practices. In response, the National Community Pharmacists Association's (NCPA) Executive Vice President and CEO, B. Douglas Hoey, RPh, MBA, issued the following statement:

"NCPA is still reviewing this proposed regulation in its entirety and anticipates submitting formal comments to HHS. In the interim, community pharmacists applaud the Department for including in the proposed rule PBM transparency language, a bipartisan provision of the Affordable Care Act. With this step, the Administration is also reaffirming its support for PBM transparency in the exchanges by including an implementation pathway in the rule.

"In seeking support of PBM transparency requirements in the Affordable Care Act, patient advocate groups have noted that, because of a lack of regulation, 'PBMs engage in fraudulent and deceptive practices, resulting in several enforcement actions by a coalition of state attorneys generals that have secured over $371 million in fines and penalties. At the same time the profits of the three major PBMs have skyrocketed from $900 million to over $2.7 billion annually. No other segment of the health care market has a record of such deceptive, egregious and anti-consumer practices.'

"The disclosure requirements should help health plans in the exchanges achieve a better bargain for patients as wasteful PBM practices are discouraged and more readily identified. These include dramatic markups on claim costs ("spread pricing") and drug switching in pursuit of brand manufacturer rebates, which reduce the savings available to health plans and beneficiaries while PBM profits skyrocket. Ultimately, such PBM reforms should be extended to all health plans, such as by enacting the bipartisan Pharmacy Competition and Consumer Choice Act (S. 1058/H.R. 1971). In this legislation and other ways, community pharmacists can play a greater role in reducing costs and improving outcomes through the utilization of generic drugs and addressing improper prescription medication use, estimated to cost as much as $290 billion annually."

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to or read NCPA's blog, The Dose, at

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