(Washington, DC)— The Pharmaceutical Care Management Association (PCMA) released the following statement today on new legislation introduced by Congressman Stephen F. Lynch (D-Mass.) — the FEHBP Prescription Drug Integrity, Transparency, and Cost Savings Act (H.R. 4489) — which would increase prescription drug costs and reduce choices for federal employees:

“Congress has enough on its plate without also trying new experiments on the successful Federal Employees Health Benefits Program (FEHBP), one of our nation’s most proven health benefit programs.  FEHBP is one of the best-functioning, well-regarded health programs in America and should not be subject to wholesale political changes.

“Health care changes must improve quality, lower costs, and enhance choice and competition.  This new legislation runs counter to these goals by radically changing the way federal employees’ prescription drug benefits are administered and would make the FEHBP operate more like those provided through other federal agencies that significantly limit prescription drug choices.

“The legislation would force mandated disclosure of sensitive pricing information, giving the upper-hand to drug makers and drug stores to charge higher prices at the expense of federal employees.  Numerous economists and budget experts — including the Federal Trade Commission — have explored this issue and found that the wrong kind of transparency increases, rather than decreases, costs.

 “The federal government uses pharmacy benefit managers (PBMs) to ensure that its employees have the most affordable, safe, flexible, and generous prescription drug benefits possible.  PBMs lower drug benefit costs by encouraging the use of generic drug alternatives, negotiating discounts from manufacturers and drug stores, saving money with home delivery, and using health information technology like e-prescribing to reduce waste and improve patient safety. 

“The utilization of these tools is important as the FEHBP is designed to keep the federal government competitive in attracting and retaining personnel who might otherwise choose to work in the private sector.  This private sector approach is much different from the ones used by other government programs such as the Veterans Administration (VA).  To save money, those programs simply use artificial price controls, severely restrict drug choices and, in the case of the VA, include only a handful of the nation’s 60,000 pharmacies in their networks.  The draconian steps included in this legislation would significantly undermine the goals of the Office of Personnel Management (OPM).   

 “OPM can and does periodically audit, review, and change the way it manages FEHBP drug benefits.   Policymakers should be wary of this legislation and any potential changes that would disrupt benefits for millions of federal workers, especially when considering that a recent OPM survey found that the overwhelming majority of federal employees are satisfied with their health benefits by an almost 7-to-1 margin.”

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(Washington, DC)—Consumers receiving their prescription medications for chronic conditions through a mail-service pharmacy “were more likely to take them as prescribed by their doctors than did patients who obtained them from a local pharmacy,” according to a new study published in the American Journal of Managed Care.  The study is the first to suggest that the use of mail-service pharmacies can improve patient outcomes, adding a new dimension to existing peer-reviewed and government research showing that mail-service pharmacies make far fewer errors and cost consumers less than “brick-and-mortar” pharmacies, the Pharmaceutical Care Management Association (PCMA) said today.

“While everyone knew that mail- service pharmacy made prescriptions more affordable, this new empirical evidence shows that it can also improve outcomes for patients with chronic conditions.  This should be an ‘eye-opener’ for any policymaker who wants to address the chronic care crisis in America,” said PCMA President and CEO Mark Merritt. 

Key findings from UCLA and Kaiser Permanente’s Division of Research include:

• 84.7 percent of patients who received their medications by mail at least two-thirds of the time stuck to their physician-prescribed regimen, versus 76.9 percent who picked up their medications at “brick and mortar” Kaiser Permanente pharmacies.
• Mail-order pharmacy users were more likely than local pharmacy users to have a financial incentive to fill their prescriptions by mail (49.6 percent vs. 23.0 percent), and to live a greater distance away from a local pharmacy (8.0 miles vs. 6.7 miles).

Other government and independent research has examined the increased savings and safety provided by mail-service pharmacies. That research includes:

• Federal Trade Commission (FTC).  The FTC found that mail-order pharmacies provide more savings than retail pharmacies and dispense lower-cost generic drugs at roughly the same rate as retail pharmacies. The report also found that “prescription drug plan sponsors generally paid lower prices for drugs purchased through PBM-owned mail-order pharmacies than for drugs purchased through mail-order or retail pharmacies not owned by PBMs.”
• Harvard University. Independent, peer-reviewed research conducted by Harvard University and published in 2004 by Health Affairs, analyzed some 670 million prescription drug claims and concluded that generic drug substitution rates at PBM mail-service pharmacies were slightly higher than at retail pharmacies.
• Pharmacotherapy: Official Journal of the American College of Clinical Pharmacy. Peer reviewed data found that highly automated mail-service pharmacy dispensed prescriptions with 23-times greater accuracy than retail pharmacies.  The mail-service error rate was zero in several of the most critical areas, including dispensing the correct drug, dosage, and dosage form.

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PCMA: Accelerate Competition to Lower Costs, Increase Access

(Washington, DC)— A new report from the Government Accountability Office (GAO) that finds “extraordinary price increases” for brand-name drug products from 2000 – 2008 was largely fueled by the “lack of therapeutically equivalent drugs” and “limited competition,” underscores the need for policymakers to promote policies in health reform which increase competition and lower costs, the Pharmaceutical Care Management Association (PCMA) said today.

“History shows that companies – including drug companies – raise prices when they don’t face competition and lower prices when they do.   That’s why consumers have saved literally hundreds of billions of dollars since the Hatch-Waxman law first allowed generic drugs to compete with their brand-name counterparts 26 years ago,” said PCMA President and CEO Mark Merritt. “Now it’s time to take the next step and allow affordable generics to compete with expensive biotech medicines.  It’s also time to scrap ‘protected drug class’ laws which protect ‘me-too’ drug makers from having to compete with one another in Medicare.  These reforms alone would save billions and address the root cause of higher drug costs.”

Key findings from the GAO report include:

• The number of extraordinary price increases each year more than doubled from 2000 to 2008 and most of the extraordinary price increases ranged between 100 percent and 499 percent.
• Almost 90 percent of all brand-name drug products that had an extraordinary price increase sustained the new higher price – by either having another increase in price or remaining at the increased price. 

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Even More Can Be Done, However, to Lower Prescription Drug Costs

(Washington, DC)— Expenditures on prescription drugs increased just 3.2 percent in 2008 – the smallest annual rate of increase in 47 years – according to new data released today by the Centers for Medicare and Medicaid Services (CMS).  This historic low in drug spending growth coincides with the expanding use of cost-saving tools developed by pharmacy benefit managers (PBMs) in private and public programs, the Pharmaceutical Care Management Association (PCMA) said today.

“PBMs have pioneered tools – including incentivizing the use of generic medications, e-prescribing, and mail-service pharmacies – that improve savings, access, and safety for consumers and payers.  Since the key to access is affordability, payers and policymakers alike should explore broader use of PBMs’ cost-saving tools and reject approaches that make prescription drugs more expensive,” said PCMA President and CEO Mark Merritt.

The new prescription drug data are highlighted in an article in Health Affairs, “Health Care Spending at a Historic Low in 2008,” and available in depth from CMS. Key data points include:

• Prescription drug expenditures increased 3.2 percent in 2008, the slowest annual rate of increase in 47 years.
• Overall health care spending increased 4.4 percent in 2008, a higher rate of increase than prescription drugs.
• Consumer out-of-pocket expenditures accounted for 21 percent of prescription spending in 2008, down from 31 percent in 1998 and 60 percent in 1988.

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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 210-plus million Americans.