Minimizing Legal Risk in

Pharmaceutical Benefit Management

Monday, March 22, 2004

About

PBMs and drug manufacturers have gained new ground under Medicare reform.
Can your company reap the benefits while avoiding increased legal risks?

Pharmaceutical Benefit Managers (PBMs) have won the top prize in the newly signed Medicare Bill. Under the legislation, PBMs - which have already been in control of the drug benefits of most employer sponsored health care plans - will now also be in control of the drug benefits of this nation's senior citizens.

Beginning in the Spring of 2004, PBMs will issue the Medicare discount cards and will be able to charge senior citizens a fee to access the discounts that PBMs get from pharmacies and other drug retailers. PBMs will also get a transaction fee from pharmacies and other retailers that accept the discount cards and will be eligible for rebates from drug manufacturers for directing Medicare recipients to certain pharmaceutical products.

The PBM windfall also comes as welcome news to pharmaceutical manufacturers who feared the creation of a central government drug purchasing organization with which they were powerless to negotiate on price.

This prize, however, does not come without peril. The rewards of transaction fees and manufacturers rebates under Medicare may fuel the ongoing fires that PBMs - and the pharmaceutical companies that they contract with - are presently battling. PBMs, not unlike pharmaceutical and medical device companies, have found themselves at the center of the government's latest fraud and abuse investigations concerning the sales and marketing of prescription drugs. The United States Attorney's Office and the Attorneys General of several states are scrutinizing PBMs with regard to AWP and Medicaid Rebate violations. Several states have launched legislative and policy initiatives to take PBMs to task on their purchasing and pricing practices. PBMs have also been accused of antitrust violations and market manipulation. There are also a series of private suits alleging similar violations.

In this evolving and unsettled environment, counsel and executives for PBMs and pharmaceutical companies must know how to implement a fail-safe compliance program and protect against even the appearance of impropriety. They must have an in-depth and complete understanding of the latest legal, regulatory, legislative and political developments affecting pharmaceutical benefit management today.

This timely American Conference Institute publication will arm you with the latest information from those at forefront of Medicare reform, the state legislative initiatives, the federal and state investigations and the private litigation. An outstanding faculty of leading attorneys, in-house counsel and executives, government representatives, federal and state prosecutors, and consultants, provided important insights on key issues such as:

  • How Medicare reform and state legislative initiatives will impact PBMs and their relationships with the pharmaceutical industry
  • Disclosure and transparency requirements under federal and state legislation
  • Domestic and international antitrust hotspots
  • The FTC Healthcare study
  • How to avoid violations of patient privacy in practices routine to pharmaceutical care management
  • The OIG Compliance Guidance of April 2002 and its application to PBMs
  • How to reduce risks associated with AWP pricing, Medicaid/ Medicare Rebate
  • Update on the private litigation

Contents & Contributors

About

PBMs and drug manufacturers have gained new ground under Medicare reform.
Can your company reap the benefits while avoiding increased legal risks?

Pharmaceutical Benefit Managers (PBMs) have won the top prize in the newly signed Medicare Bill. Under the legislation, PBMs - which have already been in control of the drug benefits of most employer sponsored health care plans - will now also be in control of the drug benefits of this nation's senior citizens.

Beginning in the Spring of 2004, PBMs will issue the Medicare discount cards and will be able to charge senior citizens a fee to access the discounts that PBMs get from pharmacies and other drug retailers. PBMs will also get a transaction fee from pharmacies and other retailers that accept the discount cards and will be eligible for rebates from drug manufacturers for directing Medicare recipients to certain pharmaceutical products.

The PBM windfall also comes as welcome news to pharmaceutical manufacturers who feared the creation of a central government drug purchasing organization with which they were powerless to negotiate on price.

This prize, however, does not come without peril. The rewards of transaction fees and manufacturers rebates under Medicare may fuel the ongoing fires that PBMs - and the pharmaceutical companies that they contract with - are presently battling. PBMs, not unlike pharmaceutical and medical device companies, have found themselves at the center of the government's latest fraud and abuse investigations concerning the sales and marketing of prescription drugs. The United States Attorney's Office and the Attorneys General of several states are scrutinizing PBMs with regard to AWP and Medicaid Rebate violations. Several states have launched legislative and policy initiatives to take PBMs to task on their purchasing and pricing practices. PBMs have also been accused of antitrust violations and market manipulation. There are also a series of private suits alleging similar violations.

In this evolving and unsettled environment, counsel and executives for PBMs and pharmaceutical companies must know how to implement a fail-safe compliance program and protect against even the appearance of impropriety. They must have an in-depth and complete understanding of the latest legal, regulatory, legislative and political developments affecting pharmaceutical benefit management today.

This timely American Conference Institute publication will arm you with the latest information from those at forefront of Medicare reform, the state legislative initiatives, the federal and state investigations and the private litigation. An outstanding faculty of leading attorneys, in-house counsel and executives, government representatives, federal and state prosecutors, and consultants, provided important insights on key issues such as:

  • How Medicare reform and state legislative initiatives will impact PBMs and their relationships with the pharmaceutical industry
  • Disclosure and transparency requirements under federal and state legislation
  • Domestic and international antitrust hotspots
  • The FTC Healthcare study
  • How to avoid violations of patient privacy in practices routine to pharmaceutical care management
  • The OIG Compliance Guidance of April 2002 and its application to PBMs
  • How to reduce risks associated with AWP pricing, Medicaid/ Medicare Rebate
  • Update on the private litigation

Contents & Contributors

MAXIMIZING YOUR MARKET CLOUT
Cheryl Rivers, National Legislative Association on Prescription Drug Pricing

IMPLEMENTATION OF THE MEDICARE DRUG BENEFIT AND STATE INITIATIVES: KEY INDUSTRY CONCERNS
Terry Latanich, Medco Health Solutions

THE FUTURE OF PBM
Dan Mendelson, The Health Strategies Consultancy LLC

PBM AND TRANSPARENCY: A FEW OBSERVATIONS WITH THE NEED TO PROTECT CONFIDENTIAL INFORMATION
William A. Sarraille, Sidley Austin Brown & Wood LLP

PHARMACY BENEFIT MANAGERS
David A. Balto, White & Case

ANTITRUST HOTSPOTS IN PHARMACEUTICAL BENEFIT MANAGEMENT
Bruce D. Sokler, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

THE FTC'S PBM ACTIVITIES
Seth C. Silber, Federal Trade Commission

SAFEGUARDING PATIENT PRIVACY IN ROUTINE PBM PRACTICES
Michael Bell, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

THE APPLICATION OF THE OIG GUIDANCE TO PBMS; STRATEGIES FOR COMPLIANCE
Harvey Yampolsky, Arent Fox

PRICING, MEDICAID REBATE REPORTING, MEDICARE PART D, AND BEYOND
Carolyn J. McElroy, Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, P.C.

PBM THIRD-PARTY ARRANGEMENTS AND GOVERNMENT CONCERNS
Larri A. Short, Arent Fox

PBM LITIGATION SUMMARY
John E. Hall, Covington & Burling

"TRANSPARENCY" AND BEYOND: HOW IS PRIVATE PBM LITIGATION FARING?
Stephanie Kanwit, Pharmaceutical Care Management Association

COMPETITION IN THE PHARMACEUTICAL INDUSTRY ARE PBM'S FACILITATORS OR BARRIERS?
James A. Donahue, III, Office of the Pennsylvania Attorney General

PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION V. ROWE
Andrew S. Hagler, Law Office of Andrew S. Hagler, LLC



DOCUMENT TYPES: PRESENTATIONS AVAILABLE: 0