As Rite Aid collapses, customers and other pharmacies bear the impact and other notes from around the interweb:

• As Rite Aid collapses, customers and other pharmacies bear the impact. Rite Aid has sold the pharmacy services of most of its stores across the United States to several rivals. The bankrupt company announced the fire sale Thursday, with CVS Pharmacy, Walgreens, Albertsons and Kroger scooping up Rite Aid’s pharmacy services at more than 1,000 locations. CVS Pharmacy was the biggest buyer, snapping up the prescription files of more than 600 Rite Aid stores spanning 15 states and agreeing to buy 64 Rite Aid locations in Idaho, Oregon, and Washington. The transactions still must be approved by the relevant bankruptcy court. As Rite Aid navigates the Chapter 11 bankruptcy process, the company said its stores remain open and customers can continue to use their pharmacy services “without interruption.”

• Stuck in the Middle: Self-Funded Health Plans and Recent Challenges to State PBM Laws. In recent years, prescription drug prices have been top-of-mind for state legislators, who have responded by passing laws that seek to control that pricing in a variety of ways, including by regulating pharmacy benefit managers (PBMs). While states are permitted to regulate fully insured products offered in their state, including mandating the benefits that insurers must offer, the Employee Retirement Income Security Act of 1974, as amended (ERISA) preempts state laws that impermissibly relate to self-funded employer-sponsored health plans that are subject to ERISA.

• The Uneven Landscape of Prescription Coverage and Restrictions Across U.S. Insurance. Medicaid, often viewed as a safety net, covers the broadest share of prescribed drugs but imposes more restrictions than any other insurance type. Medicare, by contrast, covers the least drugs while restricting access for nearly half of the drugs that are covered. Commercial insurance, typically employer-sponsored or purchased individually, falls in the middle in terms of drug coverage but has the fewest coverage limitations, like prior authorization, quantity limits, and step therapy.

• Costs of Extending the Small Molecule Exemption Period in Medicare Drug Price Negotiation. The Inflation Reduction Act (IRA) of 2022 empowered Medicare to negotiate prices for certain prescription drugs with high levels of Medicare spending. However, prices for new drugs cannot be negotiated immediately after Food and Drug Administration approval due a statutory waiting period. For small molecule drugs (chemical compounds that are usually pills, e.g. empagliflozin [Jardiance]), prices are negotiated at year 7 and take effect 9 years after FDA approval. For biologics (derived from a living organism or its cells and that are usually injections, e.g. insulin), negotiation occurs starting after 11 years, and the negotiated prices take effect at year 13.

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