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April 2, 2020

A Silver Lining: COVID-19 Offers Independent Pharmacies a Chance to Shine

Independent pharmacies are on the front lines in the fight against COVID-19. NYS Governor Andrew Cuomo recognized their efforts in a recent press conference, stating, “The pharmacists have lines going out the door, and they’re showing up every day, day after day.” Independent pharmacies are integral in the fabric of our communities, with many treating generations of families, supporting local charities, and consistently going the extra mile to help us when we need it most.

Unfortunately, many independent pharmacies have been destroyed by the market power of largely unregulated pharmacy benefit managers (PBMs) who regulate the same provider networks they compete in, with predictable anti-competitive results that have decimated community pharmacy. The COVID-19 pandemic is an opportunity for independent pharmacies to remind consumers and regulators of how they excel and provide superior products and services as well as their deep commitment to their communities.

The COVID-19 pandemic and its impact on our lives has led to the unprecedented implementation of emergency measures being taken by the federal and state governments to relax regulation on pharmacies and pharmacists and expand their role in responding to the pandemic. These emergency measures include the suspension of regulations and expansion of services, including: 

  • Authorizing emergency refills
  • Allowing pharmacists to refill prescriptions early based on professional judgment
  • Remote pharmacy practice for pharmacists and technicians
  • Mobile pharmacies and clinics
  • Ability to serve patients via delivery (including mail), drive through, curb-side pickup, and automated pickup kiosks
  • Waiving signature requirements for receiving drugs
  • Waiving technician-to-pharmacist ratios
  • Compounding hand sanitizer
  • Dispensing chloroquine, hydroxychloroquine, and azithromycin
  • Reusing personal protective equipment (PPE)
  • Extending inventory reconciliation reporting
  • Deferring license renewals and continuing education requirements

The expanded role of pharmacies during the pandemic provides an opportunity for independent pharmacies to shine and provide the full range of professional services that are often prohibited by either law, regulation, or by the PBM middlemen who increasingly constrict pharmacy services (such as delivery) to commoditize the profession of pharmacy to their own economic advantage. 

While these are all welcome measures, the government should also ensure consumers are able to freely access the pharmacy of their choice and ensure that the pharmacy is reimbursed, at the very least, for the cost of acquiring the medication and a reasonable professional fee and relief from the retroactive clawbacks imposed by PBMs that have plagued them. This basic relief has not yet been addressed, even as the strain on pharmacy resources has increased.

We caution pharmacies to maintain good hygiene in their recordkeeping to ensure proper documentation and practices, as PBMs will undoubtedly increase their audits; fraud, waste, and abuse investigations; and accompanying recoupments for any noncompliance. We are also concerned with the havoc that may be caused by direct and indirect remuneration (DIR) and generic effective rate (GER) fees due to dispensing during this time by pharmacies. The urgency of the pandemic environment will someday subside, leaving in place the usual dynamics of retrospective auditing and judgments by auditors and payors.

Barclay Damon represents pharmacies across the United States. Its attorneys are actively monitoring the changing landscape and are experienced in handling issues arising out of pharmacy relationships with PBMs. We are here to assist and support you now during the rigors of the current health crisis and always.

If you have any questions regarding the content in this alert, please contact Linda Clark, Health Care Controversies Team leader, at lclark@barclaydamon.com; Brad Gallagher, counsel, at bgallagher@barclaydamon.com; or another member of the firm’s Health Care Controversies Team.

We have a specific team of Barclay Damon attorneys who are actively working on assessing regulatory, legislative, and other governmental updates related to COVID-19 and who are prepared to assist clients. You can reach our COVID-19 Response Team at COVID-19ResponseTeam@barclaydamon.com.
 

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