Pharmacy reimbursement lags for generics when there are price hikes, study finds

Reimbursement for generic drugs from health plans and pharmacy benefit managers kept up with price hikes only 16 percent of the time, according to a recent study cited by STAT.

Pharmacies not being reimbursed for the drugs they purchase and sell is one reason a number of retail pharmacies have closed in the U.S. in recent years, according to STAT. Pharmacies are also less likely to carry drugs consumers need if they aren't properly reimbursed.

"If the pharmacies can't recoup their operating costs, or if they are paid below their acquisition costs for the drug, it decreases the likelihood that pharmacies will dispense the drug or even buy it in the first place," Antonio Ciaccia, a co-founder of 3 Axis Advisors, the market research firm that conducted the study, told STAT.

The study analyzed claims data from 1,392 pharmacies in 23 states for 1,627 commonly used generic drugs dispensed between Jan. 1, 2018, and March 26, 2020. The researchers compared reimbursement rates for the top 50 health plans. 

The study identified 4,312 instances in which generic drug costs rose by 50 percent or more and of those, found only 711 instances in which reimbursement kept pace with the price hikes, STAT reported. 

A spokesperson for the Pharmaceutical Care Management Association, which represents pharmacy benefit managers, told STAT: "The group behind the report is founded and operated by special interests — independent pharmacy lobbyists — that are seeking higher profits on the backs of patients during a global pandemic. PBMs are working with the entire prescription drug supply chain, including pharmacists, to help patients access needed medications during this public health emergency."

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