(Washington, DC)- The Pharmaceutical Care Management Association (PCMA) issued the following statement on the amendments contained in the U.S. of Representatives House Energy and Commerce Committee markup of the tri-committee majority health reform bill:      

“While today’s vote is a testament to the ongoing power of the drug industry, which has spent more than $66 million to defeat meaningful biogenerics reform, we  hope that the final House and Senate bills will instead reflect the interests of employers, unions, consumers, seniors – and even the President himself – all of whom desperately want to reduce drug costs.

“In addition, we have very strong concerns that the PBM disclosure amendment would undermine proven PBM tools used to lower costs and enhance quality. Public disclosure of sensitive pricing information could result in drug manufacturers being made aware of their competitors’ negotiating strategies and raise prices accordingly.  The greatest beneficiaries of this type of disclosure are drug manufacturers, not consumers or taxpayers.

“The Federal Trade Commission and others have explored this issue and found that the wrong kind of transparency increases, rather than decreases costs.  The Congressional Budget Office concluded that such a policy would have increased Medicare Part D’s costs by 10 percent if it had been included in the program.

“With respect to other issues raised during the amendment process, PCMA opposes ‘direct negotiation’ for pharmaceuticals by the federal government in Medicare Part D.  Allowing the federal government to ‘negotiate’ prescription drug prices would result in a significant cost shift to consumers enrolled in existing employer-provided drug coverage.”

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Policymakers Should Allow Plans to Negotiate Greater Discounts on All Drugs,

Extend Generic and Therapeutic Substitution 

(Washington, DC)- As policymakers seek “offsets” to finance health reform, a new study released today in Health Affairs (“How Medicare Could Get Better Prices on Prescription Drugs”) highlights several market-based reforms for Medicare Part D which could reduce government spending, the Pharmaceutical Care Management Association (PCMA) said. 

“These reform options – including allowing Part D plans and pharmacy benefit managers greater negotiating leverage and expanding generic substitution – are ‘real’ reforms in health care that would lower costs and increase access, without shifting costs from the federal government to the private sector,” said PCMA President and CEO Mark Merritt. 

The study also critiques other options that have been debated for Part D, including allowing the government to negotiate directly on drug prices and imposing Medicaid-style rebates.  The authors note that “the structure of Part D, replete with many private plans, poses difficult administrative and practical hurdles to successful Federal price negotiations.”  Mandatory rebates in Part D would be “prone to gaming by companies and politically expedient adjustments by Congress,” according to the study.

The study breaks new ground by highlighting market-based proposals which would “retain the current framework of a competitive prescription drug marketplace.”  These include:

• “Relaxing” Protected Class Requirements and Allowing Part D Plans to Negotiate Greater Discounts on all Drugs. Part D plans are required to cover at least two drugs in each therapeutic class and the Centers for Medicare and Medicaid Services (CMS) also requires plans to cover at least one drug in each subclass, and cover “all or substantially all” drugs in six or potentially more specially protected classes. According to the study, “relaxing these formulary requirements would allow plans to negotiate more aggressively with drug companies and could lower prices by hundreds of millions of dollars per year.”  PCMA strongly believes these Part D provisions eliminate price competition among manufacturers without providing seniors greater access to those drugs. This reform alone would save Medicare $4.2 billion over 10 years, according to CMS.
• Extending Generic and Therapeutic Substitution. Tools pioneered by PBMs – including those which increase the use of generic medicine – have lowered costs and expanded access to prescription drugs for seniors in Part D. While Part D plans and the PBMs that manage them have generated “robust and growing” generic substitution rates, the authors note “there may be more room for improving generic substitution rates” and suggest that a federal generic substitution law could “prevent local legislative retrenchments and promote uniform generic access.” Since 2008, 29 states have introduced more than 80 legislative proposals to exempt certain classes of drugs from generic substitution laws. To date, 69 of those bills have been defeated.
• Biogenerics. The authors also point out that changing federal law to permit follow on biologics could achieve billions in savings. Meaningful biogenerics legislation is strongly supported by AARP, AFL-CIO, the Ford Motor Company, PCMA, and dozens of other consumer, labor, and employer organizations concerned about runaway health care costs in both the private and public sectors. Legislation that allows biogenerics to compete with biotech medicines the way that generics do now with conventional brand-name drugs is one of the few proposals that actually delivers score-able savings and is a good bellwether for health reform prospects overall.

In addition to the options outlined by the authors, other market-based reforms, such as allowing greater use of home delivery for refills of long-term, chronic medications in Medicare would increase efficiency and save billions. Currently, due to restrictions in Medicare Part D, beneficiaries in private sector retiree plans use home delivery four times more often than those in Part D plans.  This is costly and unfortunate since home delivery reduces costs and increases convenience for seniors and the disabled.  Sadly, patients don’t fill more than 20 percent of those prescriptions which they are required to pick up at the drugstore.

Merritt: Reform Health Care, Don’t Just Shift Costs

(Washington, DC)- In a letter addressed to the Chairmen and Ranking Members of the U.S. House of Representatives Committees on Energy and Commerce, Ways and Means, and Education and Labor, the Pharmaceutical Care Management Association (PCMA), expressed “significant concerns” about provisions in the “America’s Affordable Health Choices Act of 2009,” as released by the House tri-committee majority.

“PCMA supports reform, but has significant concerns about any public plan option that creates an un-level playing field or shifts costs on to competing private plans,” said PCMA President and CEO Mark Merritt.

To enhance competition and lower costs, PCMA encourages policymakers to examine several common-sense approaches that would neither restrict access to medications nor simply shift costs from public to private payers. These include:

• Real Biogenerics Reform: Real biogenerics legislation is strongly supported by AARP, AFL-CIO, the Ford Motor Company, PCMA, and dozens of other consumer, labor, and employer organizations concerned about runaway health care costs in both the private and public sectors. We need meaningful biogenerics legislation which increases competition for the world’s most expensive medicines and also delivers scoreable savings.

• Reduce waste by making formularies in Medicare Part D more closely resemble those in FEHBP. This could include eliminating so-called “protected drug classes” in Medicare. These existing Part D provisions eliminate price competition among manufacturers without providing seniors greater access to those drugs. This reform alone would save Medicare $4.2 billion over 10 years, according to CMS.

• Increase efficiency and save billions by allowing greater use in Medicare of home delivery for refills of long-term, chronic medications. Seniors appreciate the convenience and are more likely to stay on their drug regimens if their long-term maintenance medications are delivered right to their homes.

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PCMA Letter to the U.S. House of Representatives Tri-Committee on the America’s Affordable Health Choices Act of 2009”

PCMA Written Testimony to the U.S. Senate Commerce Subcommittee on Consumer Protection, Product Safety, and Insurance:  “Competition in the Health Care Marketplace”

Launches New Radio Ad: America Wants the Change it Voted For 

(Washington, DC)- In response to last night’s U.S. Senate Health, Education, Labor and Pensions (HELP) Committee vote to allow biologic drugs 12 years of market protection before generic versions can compete, the Pharmaceutical Care Management Association (PCMA) launched a new radio ad campaign which says that “America wants the change it voted for” in health reform.  

PCMA President and CEO Mark Merritt issued the following statement:

“Despite this setback, the biogenerics debate marches on and is a bellwether for Washington’s capacity for real health reform.  Either Congress will side with the voters who expect real change – the seniors, consumers, employers and unions who support meaningful biogenerics reform – or it will let health costs continue to soar as a courtesy to special interests.

“Because this proposal would grant manufacturers almost twice the monopoly pricing power that the President requested and ignores the Federal Trade Commission report which found that not even one year is necessary to protect incentives to innovate, it is hard to conceive that it will be part of any final ‘reform’ legislation in its current state.”

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Ad Poses the Question:

Will Congress Ignore Its Core Constituents And Settle for Phony Bio Reform?

(Washington, DC)- As the U.S. Senate Health, Education, Labor and Pensions (HELP) Committee continues to debate biogenerics, the Pharmaceutical Care Management Association (PCMA) released a new ad today titled, “Bio-Illogic” which asks why policymakers are considering adopting the agenda of a few biotech manufacturers instead of supporting real reform. 

PCMA President and CEO Mark Merritt issued the following statement on the new ad and the continuing debate:

“Beyond all the spin about health reform momentum, the biogenerics debate offers an accurate barometer of whether Washington is capable of delivering real reform or whether it will settle for phony reform or no reform at all. 

“Creating a real biogenerics pathway is one of the easier parts of broader health reform.  Done right, it will improve access to life-saving medicines and generate scoreable savings without shifting costs from one group of payers to another. Hopefully, the HELP Committee won’t allow a few powerful biotech companies to derail or neuter the kind of biologics reform called for by a broad coalition of seniors, employers, unions and consumers.

“To allow twelve or thirteen years of monopoly pricing for the world’s most expensive medicines – during a recession, no less – doesn’t fit anyone’s definition of ‘health reform.’  This is especially true considering the White House has said that even seven years would be ‘generous’ and the Federal Trade Commission believes that not even one year is necessary to protect incentives to innovate.

“If the HELP Committee is unable to produce a biologics agreement, or produces one that is clearly ineffective, the prospect for real health reform overall is, tragically, bleak indeed.”

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New PCMA Ad on Biogenerics: ‘Bio-Illogic’

(Washington, DC)- Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt issued the following statement in advance of tomorrow’s U.S. Senate Health, Education, Labor and Pensions (HELP) Committee’s mark-up on the remaining provisions and amendments, including biologics:

“The Senate HELP Committee can resolve one of the easier components of health reform: subjecting expensive biologics to generic competition after their patents expire.  Biogenerics legislation would save taxpayers and consumers billions of dollars and offer patients affordable access to the fastest growing segment of medications today.

“Real biogenerics legislation is strongly supported by AARP, AFL-CIO, Ford Motor Company, General Motors, PCMA and dozens of other consumer, labor and employer organizations which are concerned about runaway health care costs in both the private and public sectors.  The White House agrees and states that offering seven additional years of ‘market exclusivity’ to the handful of companies who make biologics would be ‘generous.’  Meanwhile, the Federal Trade Commission recently issued a report stating that current patent laws are, in and of themselves, sufficient to protect incentives for biologics innovation. 

“Yet many Democrats and Republicans in Congress continue backing proposals which would allow biologics manufacturers to use monopoly pricing for a decade or even longer after their patents expire. 

“Because it has such broad support and is one of the few proposals that actually delivers score-able savings, biogenerics is the low-hanging fruit of health reform and a good bellwether for its prospects overall.  If Congress can’t deliver real biogenerics reform now, the prospects for reforming the entire health care system are dim.”

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