1. NCPA Legislative Update Federal & State Matthew DiLoreto Senior Director, State Government Affairs

2. Setting the Scene for Legislative Priorities  Soaring generic price spikes with significant lags in PBM reimbursements  Inability to participate in both government and private provider networks  Unregulated and non-transparent fees applied to pharmacy (DIRs)  Inability to be recognized and/or reimbursed for services provided  Increased Congressional interest in generic price spikes  Increased interest by CMS with Managed Care oversight  Increasing a pharmacist’s abilities to practice to the extent of their expertise

3. 2016 CMS Final Call Letter – MAC Pricing Updates  Effective January 1, 2016, MAC pricing is subject to the mandatory 7-day updating  CMS “reminds” Part D sponsors that MAC updates must be provided to pharmacies “in a manner that is usable by pharmacies” so they can validate prices  Part D sponsors must also disclose updated MAC drug prices to pharmacies in advance of their use for reimbursement  NCPA working with congressional offices to weigh in with CMS to effectively enforce these MAC provisions  Letter sent to CMS by eleven Congressmen requesting proper enforcement

4. The MAC Transparency Act H.R. 244  Introduced by:  Reps. Doug Collins (R-GA)  Dave Loebsack (D-IA)  Current Co-sponsorship: 22  Would increase transparency of generic drug payment rates in Medicare Part D, the Federal Employees Health Benefits Program (FEHB) and TRICARE, by requiring PBM’s to:  Protect patient privacy and choice in Part D and FEHB by prohibiting a PBM from requiring that a beneficiary use a retail or mail order pharmacy in which the PBM has an ownership interest

5. Ensuring Seniors Access to Local Pharmacies Act H.R. 793/S. 1190  H.R. 793 introduced by:  Reps. Morgan Griffith (R-VA) and Peter Welch (D-VT)  Current Co-Sponsorship: 56  S.1190 introduced by:  Senate by Sens. Shelly Moore Capito (R-WV), Tom Cotton (R-AR), Joe Manchin (D-WV) and Sherrod Brown (D-OH)  Current Co-Sponsorship: 10  “Any Willing Pharmacy” which would allow community pharmacies located in medically underserved areas (MUA’s), medically underserved populations (MUP’s) or health professional shortage areas (HPSA’s) to participate in Medicare Part D preferred pharmacy networks

6. Pharmacy and Medically Underserved Areas Enhancement Act (Provider Status) H.R. 592/ S.314  H.R. 592 introduced by:  Reps. Brett Guthrie (R-KY), Todd Young (R-IN), G.K. Butterfield (D-NC) and Ron Kind (D-WI)  Current Co-Sponsorship: 185  S. 314 introduced by:  Sens. Chuck Grassley (R-IA), Sherrod Brown (D-OH), Mark Kirk (R-IL) and Bob Casey (D-PA)  Current Co-Sponsorship: 28  Would permit pharmacists in medically underserved communities to both provide and be reimbursed under Medicare Part B for services outlined in their state’s existing scope of practice  Consistent with precedent established by the Nurse Practitioners (NP’s) and Physicians’ Assistants (PA’s) provider status efforts; pharmacist services would be reimbursed at 85% of the physician fee schedule

7. Other Notable Issues  TRICARE Pilot Program – Preferred Networks  Coordination with CMS, including Part D Team, on DIR assessment and MAC implementation  21 st Century Cures – Pharmacy Lock-in provision  United States Department of Labor ERISA Hearings  Compounding Regs/MOUs (i.e.: Interstate, Veterinary, LTC)

8. Most Active State Legislative Issues in 2015  MAC Transparency Legislation  PBM Regulation and Enforcement  Medication Synchronization  Biosimilar Substitution  Any Willing Pharmacy / Provider

9. Nationwide State Legislative Successes  MAC Transparency Legislation  24 States (New York pending Governors signature)  PBM Fair Audit  33 States  Anti-Mandatory Mail Order  8 States  Medication Synchronization  11 States

10. Most Notable Wins of 2015  Georgia (HB470)  MAC Transparency & Strengthening of Fair Audit Law  Signed into law: May 2015  Arkansas (3 wins)  Strengthening of MAC Transparency Law (SB688)  PBM Enforcement as TPA (SB487)  Patient Consent (SB542)  Signed into law: April 2015  Washington (SB5557)  Pharmacist Recognition  Signed into law: May 2015  Ohio  MAC transparency signed as part of state budget  Includes plan sponsor disclosure and notable enforcement.  Signed into law: June 30, 2015  Wisconsin  MAC transparency signed as part of state budget  Signed into law: July 12, 2015

11. Multiple 2015 Florida Victories  MAC Transparency  Expansion of Provider Capabilities (HB655)  Revises the term of “Licensed Practitioner” to include consultant pharmacist or doctor(s) of pharmacy licensed under state statute.  Requires clinical laboratories to make services available to specified licensed practitioners.  Prohibits such clinical laboratory from charging different prices  Expansion of Immunization Capabilities (HB279)  Provide all immunizations/vaccines listed within the US CDC Adult Immunization Schedule in effect on February 1, 2015  Provide all immunizations/vaccines recommended by the US CDC for international travel in effect on July 1, 2015  Provide any immunizations/vaccines approved by the SBOP during emergencies declared by the governor  Supervisory and coursework required for intern administration

12. Evolving MAC Transparency Legislation  Original priorities:  What information - “Sources utilized” - to determine MACs  Standardized disclosure of MACs to pharmacy (i.e. 7 days)  Standardization for what constitutes a “MAC’d” drug  Clearly defined appeals process for both pharmacy and PBMs  New priorities in addition to the above standards:  PSAO or contracting agent relationship  Updated MACs must be “utilized for reimbursement”  NDCs must be available to retail pharmacies in the state  Enforcement mechanism(s)

13. PBM Retaliation Iowa MAC Transparency Lawsuit ERISA challenge victory Arkansas Express Scripts Contract Amendment Distributed in response to strengthened MAC law Arkansas PCMA Lawsuit Awaiting formal filing “If they are shooting at you, you must be doing something right…”

14. Questions