NCPA Offers Help in Legal Fight Against PBMs

We recently reviewed a case from Osterhaus Pharmacy’s (an independent pharmacy in Iowa) lawsuit against UnitedHealth and its pharmacy benefit manager (PBM) OptumRx over direct remuneration (DIR) fees. In related news, the National Community Pharmacists Association (NCPA) launched a new legal initiative to help independent pharmacies fight against ‘unconscionable’ fees. NCPA believes the DIR fees assessed against community pharmacies by PBMs and insurance companies violate federal antitrust laws and state contract laws.

“PBMs shouldn’t be able to make assessing junk DIR fees against competing pharmacies a multi-billion dollar cottage industry that puts their competition out of business and compromises patient care,” said Douglas Hoey, NCPA CEO, in a statement. “It’s completely anti-competitive, and we’re fighting back.”

TRUST LLC: What Will it Do?

To assist independent pharmacies in legally fighting these fees, NCPA has created a limited liability company called TRUST LLC (Team for Recouping Unfair Sham Terms). TRUST LLC retained 3 large law firms to investigate legal claims against PBMs. The lawyers plan to argue that PBMs have unfair market power and use it to impose unfair DIR fees on independent pharmacies in violation of antitrust laws.

PBMs have “nearly unlimited resources, and it’s almost impossible for a single independent pharmacy to fight them alone. The way the contracts are set up, arbitration for claims like these can top $1,000,000 for a single pharmacy,” said Hoey. “NCPA’s efforts allow independent pharmacies to assign their claims to TRUST LLC to fight the PBMs together. It’s still not an even playing field, but we have a much better chance of getting justice if we join forces.”

NCPA created a website dedicated to the legal battle. The site provides information about the three law firms that were retained and offers pharmacy owners the opportunity to assign their legal claims to TRUST LLC.

How Does Assigning a Claim Work?

Assigning a claim means that TRUST LLC would act on the pharmacy owner’s behalf on all legal strategies, including whether to arbitrate, settle, and participate in any class action lawsuit. According to the Fight PBMs website, pharmacies that opt to assign their legal claims will not have to lay out any money upfront if TRUST LLC decides to pursue arbitration on their behalf. Still, they may have to participate in the arbitration process by providing information and appearing before the arbitrators. If the action is successful, TRUST LLC will pay the attorney fees and costs from the monetary award, and the remainder will go to the pharmacy. In other words, while TRUST LLC and NCPA are not profiting from arbitration, costs associated with the legal process must be compensated before the remaining award goes to the pharmacy.

Class Action

In addition to arbitration, two of the three law firms of TRUST LLC have filed a class action lawsuit in federal court against CVS Caremark. Pharmacies do not need to sign up to benefit from the class litigation. However, they can provide their information to the law firms via the NCPA website.

References

NCPA unveils an opportunity to fight back against DIR fees. News release. NCPA. Published October 16, 2023. Accessed February 8, 2024. https://ncpa.org/newsroom/news-releases/2023/10/16/ncpa-unveils-opportunity-fight-back-against-dir-fees

Fight PBMs. NCPA. Accessed February 8, 2024. https://www.fightpbms.com/