Four Independent Pharmacies Sue HHS and CMS for Violating Medicare Part D Law By Allowing Drug Plans To Establish Cartels With Big Box Retailers

Since 2011, Seven Medicare Drug Plans Have Steered 6.3 Million Enrollees of the 19.5 Million Total Enrollees to Select Pharmacies

WASHINGTON, March 7, 2012 /PRNewswire-USNewswire/ -- Four members of the Association of Community Pharmacists Congressional Network (ACPCN) have sued the Department of Health and Human Services (HHS) and the Centers for Medicare and Medicaid Services (CMS). The lawsuit charges that CMS wrongfully permitted prescription drug plans (PDPs), run by Pharmacy Benefit Managers (PBMs), to create "preferred pharmacy networks." The ACPCN coordinated lawsuit seeks to prevent CMS from approving network schemes that allow select pharmacies to entice enrollees through economic incentives, including lower copayments, while denying competing pharmacies access to the same terms and conditions as required by the Medicare Part D prescription program law.

"The lockout of competing pharmacies and their patients accomplished by the design of these so-called preferred networks was never intended by Congress, which guaranteed through pro-competitive provisions that any willing pharmacy would have equal access to the terms and conditions of any Part D network contract," said John M Rector Legal Advisor, ACPCN.

Plaintiffs in the case, Farmville Discount Drug, Inc., East Carolina Pharmacy Care, Inc., Columbia Pharmacy, Inc. and Todd's Pharmacy of Gates County, Inc., note that nothing in the Medicare Part D Statute or its legislative history allows for the operation of prescription drug plans that allow a "preferred" pharmacy to offer one set of low co-pay and co-insurance rates to enrollees while requiring other, non-preferred pharmacies to charge enrollees higher prices. The plaintiffs argue that this inclusion of some, and exclusion of all others, not only harms patients but also puts the excluded pharmacies at a tremendous competitive disadvantage.

To assure pharmacy access to enrollees, Medicare Part D includes the 'Any Willing Provider Law,' which requires a prescription drug plan to permit the participation of any pharmacy that meets the terms and condition of the plan. Seven Medicare Part D big boxes "preferred" retailer networks have been offered since 2011, including the exclusionary plans of Humana-Wal-Mart, AARP, Aetna, CVS-Caremark and Rite-Aid. Independent pharmacies have been denied access to each of these "preferred networks."   

"Residents in rural or metro areas could be forced to drive miles to the find the nearest preferred pharmacy to fill their prescriptions at the preferred price. This lawsuit was filed by independent pharmacies to preserve the right of their patients to fill prescriptions at the pharmacy of their choice and receive the same pricing they would by going to these retail giants," said Mike James, Vice-President of Government Affairs, ACPCN.

The design of these anticompetitive plans, in little more than a year, has driven 6.3 million of the 19.5 million Medicare D enrollees from their neighborhood pharmacy of choice and pharmacist services that they prefer and have used for years to pharmacies that they do not prefer. This landmark lawsuit is the first legal action by members of a national pharmacy trade association challenging the lawfulness of the establishment under Medicare Part D by HHS/CMS of the "preferred pharmacy" networks.

About the Association of Community Pharmacists Congressional Network (ACP*CN)
Based in Washington, D.C. the Association of Community Pharmacists Congressional Network consists of 20,000 independent pharmacists nationwide dedicated to serving the communities in which they live. ACP*CN is dedicated to the survival and growth of the independent pharmacy owner, who often times is the only pharmacy operating in rural towns across America. For more information visit www.acpcn.org.

Media Contact: Crystal Wright
Baker Wright Group
202/549-8072

SOURCE Association of Community Pharmacists Congressional Network