MESSAGE
| DATE | 2017-06-11 |
| FROM | Ruben Safir
|
| SUBJECT | Re: [Hangout - NYLXS] Abbott Scam - tightening the nose on the
|
http://www.frierlevitt.com/articles/pharmacylaw/pbms-wrongfully-increase-scrutiny-pharmacies-due-gray-market-diabetic-test-strip-suppliers/
PBMs Wrongfully Increase Scrutiny of Pharmacies Due to “Gray Market”
Diabetic Test Strip Suppliers
By Alexandra M. Pearsall, Esq.
In the wake of the recent litigation involving Abbott Laboratories and
“gray market” diabetic test strips, pharmacies are facing increased PBM
scrutiny over their purchases from certain pharmaceutical distributors,
including secondary wholesalers. On November 4, 2015, Abbott
Laboratories won a court order barring certain pharmacies and
distributors from selling what it claimed to be “gray market” versions
of its diabetes test strips in the United States. In the litigation,
Abbott alleged that several wholesale suppliers imported FreeStyle
glucose test strips to the United States at lower, foreign prices and
resold them to United States customers. The injunction relied upon the
assertion that these products were likely to confuse consumers and harm
Abbott’s reputation.
Despite the fact that the Abbott litigation appears far from over, many
PBMs have begun to use these developments to justify targeting of
pharmacies over purchases of glucose test strips from anyone other than
the manufacturer or primary wholesaler of record, even when there is no
evidence that such testing strips were diverted or misbranded. Under
applicable law, it is entirely permissible for licensed, secondary
wholesalers to acquire legitimate products from a variety of lawful
sources, and then resell them to licensed pharmacies. Moreover, many
States’ laws do not have a mandate that suppliers of over-the-counter
devices supply a pedigree – or a formal document delineating the
transaction history of a particular batch of a drug or device – when
transferring such products.
In spite of this, several major PBMs have used Abbott’s initial
successes in the unrelated litigation as a boon to justify heavy-handed
audits of pharmacies regarding their purchasing sources of these
diabetic suppliers. In this vein, PBMs have required pharmacies to
produce additional documentation and information above and beyond
standard wholesaler invoices or purchase history records, demanding that
pharmacies provide pedigrees or manufacturer lot numbers in order to get
credit for purchases properly made and paid for from duly-licensed
wholesalers. These PBM actions have led to massive recoupments and even
termination in some instances.
The PBMs’ actions are without proper basis in law or in contract. If
your pharmacy has purchased from a supplier indicated in the Abbott
litigation or is facing PBM action based on these types of purchases,
contact Frier Levitt today.
References:
Abbott Laboratories et al., v. Adelphia Supply USA et al., case
number 1:15-cv-5826, in the U.S. District Court for the Eastern District
of New York
Abbott v. Adelphia Supply USA et al., case number 15-3785, in the
U.S. Court of Appeals for the Second Circuit
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