PillPack's pill packs. (Forbes image)
Earlier today, I published a post on PillPack's coming termination by pharmacy benefit manager Express Scripts. At the time, Express Scripts wasn't divulging details on why, exactly, it made the move.
After publication, Express Scripts' Brian Henry got in touch, explaining in more detail what conflicts led to the termination of the contract:
They will be out of the network for three reasons:
1. They stated they were a retail pharmacy, when in fact the vast majority of their prescriptions are via mail-order. That’s in violation of our pharmacy contract. Had they noted they were mail order initially, we would have gone through the mail order licensing process.
2. They shipped medications to a state where they were not licensed to practice pharmacy.
3. They are not URAC accredited.
These are rules and regulations that govern all of the pharmacies we work with. We would like to have them in the network. We have provided them with specific information on how to reapply to be back in the network. To date, they have not complied.
Henry said PillPack was made aware of the problems by both phone and email.
Parker had already explained to me why he believes PillPack is more of a retail pharmacy than a mail-order one (though the company ships pills, it works with 30-day prescriptions and standard copays like your neighborhood CVS), and PillPack mentions the URAC accreditation--"a process we are 9 of 12 months into"--on the website it has launched to publicize the dispute.
As for shipping medications to a state where PillPack wasn't licensed, Parker chalks it up to administrative error. When PillPack launched, there were three states that didn't require pharmacies to register in those states to ship medications there. In 2015, two of those states changed their rules. "We immediately applied and were licensed in one of them, but unfortunately, did not realize the other changed their rules as well," Parker wrote over email. "As soon as we realized this, we immediately filed for licensure and stopped accepting any new customers in the state." PillPack is now licensed and in good standing as a nonresidential pharmacy across the continental U.S.
Parker emphasizes that the registration concern came from Express Scripts two months after the PBM initially terminated PillPack's contract due to its alleged self-misrepresentation as a retail pharmacy. He further claims, "We had multiple conversations with more than 15 people across the organization including multiple senior executives dating as far back as early 2015 where we disclosed the number of customers we had, our business model, internal process and policies, and the states we delivered prescriptions to."
