Alliance of Independent Pharmacists of Texas

End of Session Report

The 85th Regular Session adjorned Sine Die Memorial Day, May 29. The fate of the Alliance priority legislative issues that passed are now in the hands of the Governor. We have worked on several issues that directly impact your profession and small business. The Alliance will provide a final report in the weeks to come and again after the Governor's veto period ends in June, until then, the following important pharmacy issues have been sent to the Governor's office as follows: {Download print version}

PBM Reform

HB 3218, regulates the mysterious middlemen of prescription drug benefits (PBMs), regulating PBMs that contract with HMOs by requiring them to disclose their business practices, including Department of Insurance (TDI) jurisdiction and oversight into complaints, payment to pharmacies, prior authorization processes, credentialing, contracts, and other administrative duties.

HB 3218, an Alliance priority, requires PBMs that contract with pharmacies to comply with all laws and rules that apply to HMOs and requires PBMs to register as "delegated entities." Signed by the Governor Thursday, June 1 and is effective September 1, 2017.

Mandatory HHSC Audits of PBMs in the Medicaid Program

SB 894 requires statewide audits of Medicaid PBMs to comply with all laws, rules, and contract requirements of MCOs, including oversight of payment and benefits administration. This legislation requires MCO PBMs to be audited by a third party every two years.

Management of the Medicaid Drug Formulary

HB 1917 continues the administration of a statewide formulary, preferred drug list, and adherence to prior authorization procedures and requirements of the Health and Human Services Commission, Vendor Drug Program. 
The measure allows pharmacy to continue to advocate for a single statewide PBM or pharmacy benefits administrator for the Medicaid program with adequate reimbursement guidelines.


Congress Preserves Access to Office-Use Compounding to Patients

International Academy of Compounding Pharmacists (IACP) reported yesterday the President has signed the Consolidated Appropriations of 2017 (H.R. 244). The bill supported by numerous national and state pharmacy organizations including the Alliance, provides funding for the federal government through September 30, 2017, and includes language that addresses the Memorandum of Understanding (MOU) for office-use and pharmacy inspections.

This bipartisan legislation includes critical language which clarifies congressional intent on several compounding regulations implementing the Drug Quality and Security Act (DQSA) of 2013.

The language calls on FDA to do the following:

  • Draft a new MOU that does not include "dispensing" of compounded prescriptions across state lines. Congress expressed concern that the FDA draft MOU includes both "dispensing" and "distribution" of compounded medications. Congress made clear in the language that FDA does not possess this authority and specifically stated, "Congress only allowed the FDA to regulate distribution" under the MOU and "Congress did not intend to include dispensing of compounded drugs over state lines within the scope of the MOU."
  • Release new guidance to allow 503A pharmacists to compound for "office-use" for prescribers, hospitals, and other health systems. Congress expressed concern that patient access is decreasing to compounded medications, due to FDA's implementation actions of prohibiting all office-use compounding even where "this practice is authorized in the vast majority of states and was intended to be allowable under DQSA." 
  • Cease inspecting state-licensed 503A pharmacies under current Good Manufacturing Practices (cGMPs). Congress instructed FDA to inspect 503A pharmacies under USP standards or other applicably pharmacy inspection standards adopted by state law or regulation. Congress also stated it "reminds the FDA that compounding pharmacies are not drug manufacturers, but rather, are state licensed and regulated health care providers that are inspected by state boards of pharmacy pursuant to state laws and regulations." Congress further stated, "compounding pharmacies are more appropriately inspected using USP standards or other pharmacy inspection standards adopted by state law or regulation in the state in which a pharmacy is licensed."

We are pleased Congress has preserved patient access to compounded medications from their local independent community pharmacists.


Pharmacists Laud HHSC Support of Recognizing Pharmacists as Vital and Cost-Effective Participants in the Healthcare Team Impacting Quality of Care 

Move Benefits Patients, Small Businesses, and Called "Step in Right Direction" Toward Resolving Many Concerns Over Medicaid Prescription Drug Program

The Alliance of Independent Pharmacists of Texas (Alliance) lauded the Health and Human Services Commission and the House and Senate State Budget writers who directed the report on 2015 Budget Rider 83: An Evaluation of Pharmacy Delivery Models.

The report is an important step toward recognizing opportunities for cost effectiveness and increased competition in market share opportunities. The report stated, "Research indicates increasing the role of licensed pharmacists within their scope of practice and skill set, has potential to control costs and improve health outcomes for Medicaid members." The report continued by stating, "Patients generally see their Pharmacists face-to-face more frequently than their primary care physicians, so including pharmacists as reimbursable members of a patient's healthcare team may result in consistent and appropriate use of prescription medications, fewer emergency room visits, and healthier outcomes for Medicaid beneficiaries."

"We have been working with HHSC to review the proven MTM pilot and review services that results in cost savings within the program," noted Alliance President Nario Cantu, Cantu's Pharmacy in Edinburg. "We are pleased HHSC has heard our comments and suggestions over the past two years, and recognizes the important role pharmacists play in Medicaid and the healthcare team."

The Alliance looks forward to working with HHSC on this initiative and finding efficiencies that benefit patients and taxpayers.


CMS Recommends State Medicaid Programs Expand Scope of Pharmacists

Aligned with Alliance initiatives, the Centers for Medicare & Medicaid Services (CMS) released a guidance this week encouraging state Medicaid programs to consider expanding the ability of pharmacists to prescribe, modify, or monitor drug therapy to promote patient access to medically necessary and time-sensitive drugs. CMS notes expanding pharmacists' scope of practice allows states to facilitate timely access to medications and can help address priority public health issues. Read more


New Alliance Service

PBM and Managed Care Compliance Concerns

As noted in the last two newsletters, formal complaints are the most effective way to push compliance issues to the appropriate level of enforcement at the Texas Department of Insurance (TDI). TDI has created a pharmacy-based complaint process to allow for better oversight of PBM and other health insurer pharmacy benefit coverage compliance issues. There are several specific items that have to be documented before a formal complaint is initiated. As you become aware of health insurer or PBM compliance issues, please document the specific circumstances of the issue (audit, contracting, billing, reimbursement, coverage of benefits, patient out-of-pocket costs, etc.), and send your documented formal complaint to Audra Conwell at

Specific items of interest are as follows:

  • pharmacist/pharmacy contact information;
  • name of the health plan and/or PBM involved in the complaint;
  • the nature of the complaint; and
  • patient group and ID number(s), and date(s) of service

See additional information on the TDI Pharmacy Resource Page.

The Alliance will follow-up on your complaint-based enforcement questions with the appropriate staff at TDI. We will organize complaints according to their level of non-compliance and ask TDI to review their enforcement actions as necessary.

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