TRICARE Involves Public in its Reconsideration of Retail Pharmacy Refund Program

By Alan M. Kirschenbaum –      

Late last year, we reported on a decision of the D.C. District Court upholding the Department of Defense’s ("DOD’s") authority to apply Federal Ceiling Price ("FCP") limitations to all prescriptions filled on or after January 28, 2008 under the TRICARE Retail Pharmacy Program.  While that decision represented a victory for DoD, the court also criticized DoD’s interpretation that the authorizing statute requires the discount pricing to be implemented through a refund system to the exclusion of other approaches, and the court remanded the implementing regulation back to DoD without vacatur to consider other approaches to implementing FCP pricing.

Although not required under the court order, DoD published a notice in the Federal Register yesterday soliciting additional public comments on its final rule establishing the current refund program (which we summarized when it was promulgated in March 2009), as well as comments on other possible approaches to implementing FCP pricing.  DoD will consider alternatives that are consistent with the Congressional intent and with best business practices, and that are practical to administer.  Comments are due by March 11, 2010.  In the interim, because DoD’s final rule was remanded without vacatur, the current refund program and Pricing Agreements will remain in effect.  It will take unusually persuasive comments to overcome the inertia of a refund program that has now been in effect since May 2009.