Senate Finance Committee ‘Disclosure’ Amendment Will Increase Prescription Drug Costs
Provision Would Give Drugmakers More Pricing Power

(Washington, DC)—Mark Merritt, President of the Pharmaceutical Care Management Association (PCMA) issued the following statement after the Senate Finance Committee’s adoption of a PBM disclosure amendment sponsored by Senator Maria Cantwell (D-Wash.):

“America’s pharmacy benefit managers (PBMs) believe strongly in the principle of transparency and empowering payers to make informed health-care purchasing decisions resulting in lower prescription drug costs and higher quality.  Regrettably, today’s amendment moves the health care system in the opposite direction.”

“The Senate Finance Committee has taken a step backward in its efforts to make prescription drugs more affordable for all Americans.  The Cantwell amendment would force PBMs to disclose information that would give manufacturers and drugstores more leverage in drug-price negotiations. 

“PCMA categorically rejects the notion that PBM disclosure is budget neutral.  Indeed, it will raise costs for both taxpayers and consumers.  In 2003, the first Cantwell amendment was scored by the Congressional Budget Office (CBO) as increasing the cost of the Medicare drug benefit by 10 percent, or $40 billion over ten years.  In 2007, a revised CBO estimate found the measure could increase drug costs as much as $10 billion.  For its part, the Federal Trade Commission has warned that PBM disclosure of such information would undermine the ability of consumers to find affordable coverage options.  For reasons such as these, 30 states have considered and rejected legislation similar to the Cantwell amendment.

“Many steps remain in this debate.  PCMA will continue to work with policymakers in both the House and Senate and any conference committee to make them aware of the unintended consequences associated with PBM disclosure.”

(Washington, DC)—Mark Merritt, President & CEO of the Pharmaceutical Care Management Association (PCMA) released the following statement regarding the Senate Finance Committee’s ongoing deliberations on health-care reform:

“As the Senate Finance Committee continues to craft legislation, the next 48 hours will be critical in determining whether health reform delivers on the promise of making prescription drugs more affordable for all Americans. With nearly $245 billion spent annually on prescription drugs, Americans want the peace of mind that comes from knowing that reform makes common-sense improvements that lower the cost of prescriptions for everyone.

“Over the past decade, America’s pharmacy benefit managers (PBMs) have been at the nexus of a quiet revolution that has put the brakes on runaway prescription drug costs for consumers, Fortune 500 employers, and government programs. PBMs are hired by unions, large employers, and Medicare to be tough negotiators against drug companies, chain drugstores, and independent pharmacies – and PBMs are delivering. From 1999-2009, the annual rate of growth in prescription-drug spending has declined by a projected 78 percent, according to the Centers for Medicare and Medicaid Services (CMS). For seniors, PBMs have played a critical role in expanding access to a wide range of safe and effective drugs, while reining in the cost of Medicare Part D to 40 percent less than originally estimated. PBMs have employed an array of tools to combat rising drug costs, including more competition generated through formularies, expanded use of mail-service pharmacies, and a greater reliance on generic drugs.

“While PBMs have helped spearhead important progress, in the coming 48 hours the Senate Finance Committee has the opportunity to do more to make prescription drugs more affordable, including:

• Expand seniors’ mail-service pharmacy options. While numerous independent studies have documented that mail-service pharmacies reduce drug costs and provide greater safety and convenience, Medicare beneficiaries are not given the same incentives to use this proven delivery system as the under-65 population. Congress would help seniors – and taxpayers – save billions if health reform expands seniors’ access to chronic care medications delivered through mail-service pharmacies.

   

• Promote more competition in Medicare by requiring brand-name drugmakers to negotiate on all Part D drugs. Regrettably, Medicare Part D insulates drugmakers from competition by requiring drug plans to cover “all of substantially all” drugs in at least six different drug classes, despite no evidence that patients have had difficulty accessing these drugs. In doing so, this provision merely allows brand-name drugmakers to charge higher prices because they know plans are required to include their drugs on formularies, whether they offer discounts or not. According to CMS, removing this pharma-friendly requirement would save Medicare $4.2 billion over ten years.

   

• Sustain the proven PBM delivery model that has lowered costs and expanded access. By negotiating against the drugmakers and drugstores on behalf of consumers and payers, PBMs have helped payers level the playing field in the prescription-drug marketplace. The record of PBMs in helping to drive down costs over the past decade, both in the commercial marketplace and in Medicare, is testament to this record. PCMA believes it is critical that the Senate Finance Committee sustain this proven delivery model and resist proposals – including “one-size-fits-all” disclosure requirements – that would empower drugmakers and drugstores to use proprietary pricing information to charge higher prices.

   

• Address the biotech cost-crisis through real biogenerics reform. While not under the jurisdiction of the Senate Finance Committee, legislation creating a workable and meaningful biogeneric pathway is essential to curb the skyrocketing cost of biotech medicines. Like the White House, PCMA believes that offering seven additional years of ‘market exclusivity’ to the handful of companies who make biologics would be ‘generous.’ 

“In addition, PCMA is encouraged that the Senate Finance Committee legislation would allow seniors enrolled in Part D to receive free generic drugs on their first fill of a prescription. Providing free generics to seniors on their first prescription fills encourages them to choose cost-effective generic medications over more expensive brands.”

‘Both Can’t Be Right’

(Washington, DC)- The Pharmaceutical Care Management Association (PCMA) issued the following statement on a consumer “poll” on mail-service pharmacies released today by the National Community Pharmacists Association (NCPA).  The survey, which asserts consumer dissatisfaction with mail-service pharmacies, comes on the heels of yesterday’s report from J.D. Power and Associates that found widespread satisfaction with mail-service pharmacies:

“One day after J.D. Power and Associates released its national survey, the independent drug story lobby has attempted to undermine it with a release of its own.

“Unfortunately for NCPA, this forces policymakers to choose which source is accurate: America’s foremost consumer research firm or a lobbying organization committed to higher pharmacy costs. Both can’t be right.

“In weighing the facts, policymakers may also want to consider other independent, peer reviewed data showing that mail-service pharmacies dispense prescriptions with more than 20 times the accuracy of traditional brick-and-mortar pharmacies.[1]  Furthermore, government studies show that mail-service pharmacies typically dispense prescriptions at lower prices than traditional pharmacies.[2]^,[3]

“This year, Congress has a historic opportunity to generate billions in score-able savings by removing costly regulations that restrict home delivery in Medicare. These regulations have resulted in seniors enrolled in Medicare prescription drug plans using mail-service pharmacies 75 percent less than retirees in employer-sponsored plans.

“Savings from broader use of mail-service pharmacies could be used to offset the AMP payment increases being so aggressively pursued by NCPA and others.”

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[1] Teagarden, R., et. al., “Dispensing Error Rate in a Highly Automated Mail-Service Pharmacy Practice,” Pharmacotherapy, volume 25, November 11, 2005.

[2] U.S. Federal Trade Commission, “Pharmacy Benefit Managers: Ownership of Mail-Order Pharmacies,” August 2005.

[3] U.S. Government Accountability Office, “Federal Employee Health Benefits: Effects of Using Pharmacy Benefit Managers on Health Plans, Enrollees, and Pharmacies,” January 2003.

Seniors Satisfied with Mail-Service Pharmacies in Both Medicare Part D and Private Programs

(Washington, DC)- Pharmacy consumers with prescription drug coverage are satisfied with a range of pharmacy options – including mail-service pharmacies – according to the J.D. Power and Associates 2009 National Pharmacy Study (SM), the Pharmaceutical Care Management Association (PCMA) said today.

According to J.D. Power and Associates, “the study finds that pharmacy satisfaction among customers with prescription drug coverage averages 818 on a 1,000-point scale, while satisfaction among those without coverage is only 792. Among mail-order customers 65 years of age or older with private prescription drug coverage, satisfaction with their pharmacy experience averages 844. In comparison, pharmacy satisfaction among mail-order customers in the same age group with Medicare Part D coverage averages about the same.”

“These data highlight that consumers have widespread access to a variety of high-quality pharmacy options, including mail-service pharmacies,” said PCMA President and CEO Mark Merritt. 

 The J.D. Power and Associates study measured customer satisfaction with the pharmacy experience across major national retail drug store chains, mass merchandisers and supermarket stores, and mail-order channels. The study examines seven factors that contribute to consumer satisfaction with brick-and-mortar pharmacies and five factors that determine satisfaction with mail-order pharmacies. The average overall satisfaction index for each of the pharmacy distribution channels were:

• Mail-order pharmacies: 834
• Supermarket pharmacies: 820
• Mass merchandiser pharmacies: 801
• Retail chain pharmacies: 798

More information on the J.D. Power and Associates study is available at jdpower.com.

Separate from the J.D. Power study, other data suggest that encouraging Medicare beneficiaries to make greater use of home-delivery options for refills of long-term, chronic medications would save the government billions.

 

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(Washington, DC)- Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt issued the following statement regarding the Senate Finance Committee health care “mark” released today by Chairman Max Baucus (D-Mont.):

“PCMA supports Chairman Baucus’ continuing efforts to find common ground and advance bipartisan legislation.  We look forward to reviewing Chairman Baucus’ proposal in greater detail and working constructively with the Finance Committee.  In particular, we are encouraged that the Finance Committee’s prescription-drug provisions appear to sustain the proven PBM delivery model.   PBMs have played a central role in driving down prescription-drug trend by 73 percent from 1999 to 2007 and we believe this model should be supported and expanded in any reform legislation that advances.”

“America’s pharmacy benefit managers (PBMs) are committed to helping policymakers advance meaningful health care legislation that expands coverage, reduces costs, and improves quality throughout the system.  As part of this effort, PCMA believes strongly that any credible reform legislation must recognize and enhance the value that an integrated pharmacy benefit can provide to all Americans.  Expanded pharmacy choices, greater flexibility in benefit design, and new generic alternatives – including biogenerics – are all critical components of a modernized health care system.”

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PCMA represents the nation’s pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 200-plus million Americans.

(Washington, DC)- The Pharmaceutical Care Management Association (PCMA) issued the following statement on President Obama’s health care address before a joint session of Congress:

“Pharmacy benefit managers (PBMs) share the President’s goal of improving affordability as a central tenant to reforming the health care system.  Tools pioneered by PBMs – including those which increase the use of generic medicines – have accomplished this goal by lowering costs and expanding access to prescription drugs for consumers and payers.

“As the Administration and policymakers explore additional options to help control costs, there are several policies that can accomplish this without restricting access to medications or shifting costs onto those who already enjoy drug benefits in private sector plans.  These include:

• ‘Real’ Biogenerics Reform. Legislation allowing generics to compete with biotech medicines the way they do now with conventional brand-name drugs is one of the few proposals that actually delivers scoreable savings and could help finance broader health reform efforts. In contrast to some legislative proposals which seek to protect biotech monopoly pricing, 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.Recognizing the need for increasing competition to lower biotech costs, the Administration has stated that offering seven additional years of ‘market exclusivity’ to the handful of companies who make biologics would be ‘generous.’
• Allowing Part D Plans to Negotiate Greater Discounts on all Drugs. Part D plans are required to cover ‘all or substantially all’ drugs in six or potentially more specially protected classes. PCMA strongly believes these Part D provisions eliminate price competition among manufacturers without providing seniors greater access to those drugs. Removing this requirement would save Medicare $4.2 billion over 10 years, according to the Centers for Medicare & Medicaid Services.
• Give Seniors Access to Home Delivery of Chronic Prescriptions. In addition, allowing greater use in Medicare of home delivery for refills of long-term, chronic medications would increase efficiency and save the government billions. 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. 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.”