December 6, 2011
(Washington, DC)— Governor Andrew Cuomo should veto a drugstore-protection bill which would undermine mail-service pharmacy and increase costs for all employers, state employee health plans, and consumers, the Pharmaceutical Care Management Association said today. NY Assembly Bill 5502-B, which was transmitted to the Governor last week, would protect drugstores from their more affordable mail-service pharmacy competitors. The bill is opposed by the Federal Trade Commission and health care policy experts.
“Governor Cuomo should veto this prescription drug tax because employers and consumers rely upon mail-service pharmacy (which typically costs 10% less than retail pharmacies) to reduce health costs. This bill would raise everyone’s pharmacy rates in order to protect one group – the drugstore lobby – from pesky, lower-cost competitors,” said PCMA President and CEO Mark Merritt.
The National Federation of Independent Business (NFIB), The Employer Alliance for Affordable Health Care, The New York Health Plan Association, and the American Postal Workers Union all oppose this bill. According to a recent survey, nearly eight-out-of-ten small businesses want to be able to continue offering discounts that encourage employees to use the more affordable mail-service pharmacy option and consumers who use home delivery are strongly satisfied with it.
The Federal Trade Commission warned that AB 5502-B will “harm consumers” and “raise prices for, and reduce access to, prescription drugs.” And in an editorial, the New York Times says the bill looks like “a favor to retail drug lobbyists that could actually drive up costs for consumers.”
Even a lead lobbyist for the bill, Craig Burridge, admits that it could raise costs, telling the New York Times that “drug plans negotiated by labor unions would be exempt from the law if the unions required members to use mail-order pharmacies as a way of saving money.”
Home delivery is popular with patients because it offers 90-day prescriptions that are less expensive and is more convenient than driving to the drugstore every 30 days. With mail-service pharmacies, patients can get private counseling over the phone from trained pharmacists seven days a week, 24-hours a day. Numerous other government and peer-reviewed data have confirmed the increased savings, safety, and adherence provided by mail-service pharmacies, including:
- The Journal of General Internal Medicine: In a report released last month, the Journal of General Internal Medicine found that patients receiving their prescription medications through a mail-service pharmacy achieved better cholesterol control compared to those who obtained their statin prescriptions from their local pharmacy.
- The Federal Trade Commission (FTC): The FTC concluded in a 2005 report that PBM-owned mail-order pharmacies offer lower prices on prescription drugs than retail pharmacies and are very effective at capitalizing on opportunities to dispense generic medications.
- U.S. Government Accountability Office (GAO): In January 2003, the GAO examined the value provided by PBMs participating in the federal employees’ health plan. For prescription drugs dispensed through mail-order pharmacies, the average mail-order price was about 27 percent below the average cash-price paid by consumers for a brand name at a retail pharmacy and 53 percent below the average cash-price paid for generic drugs.
- Pharmacotherapy: Official Journal of the American College of Clinical Pharmacy: Peer-reviewed data found that highly automated mail-service pharmacies 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.
- American Journal of Managed Care: 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.” Key findings from the study include:
- 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).
- 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.