December 13, 2011
(Washington, DC)— Addressing concerns over anti-mail-service pharmacy legislation, New York Governor Andrew Cuomo announced today that both Houses of the legislature have agreed to amend NY AB 5502-B, which prevents employers from offering discounts to encourage the use of the lower cost mail-service pharmacy option.
“Employers, taxpayers, and consumers appreciate Governor Cuomo’s admonition to the Legislature to improve this costly, anti-consumer bill,” said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. “In this economy, employers need every cost saving tool they can get and mail-service pharmacy is at the top of the list.”
In expressing concerns with the bill, Governor Cuomo noted that “both houses of the Legislature have agreed to pass amending legislation making several changes, including providing that the retail pharmacy must agree in advance to accept the same reimbursement rate and applicable terms and conditions established for mail order pharmacies. With the understanding that these amendments will be passed, I approve these bills.”
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 opposed 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 NY 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, admitted 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.