March 6, 2017
(Washington, D.C.) —Legislation championed by the various special interest drugstore lobbies (H.R. 1316, The Prescription Drug Price Transparency Act) and introduced by Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa), would increase the cost of prescription drugs in federal health programs, including TRICARE and the Federal Employee Health Benefits Plan, the Pharmaceutical Care Management Association (PCMA) said today.
The proposed government mandate would gut the use of Maximum Allowable Cost (MAC) lists, which are a key cost-control reimbursement strategy used to ensure consumers – and the federal government – don’t overpay for generic drugs. MAC lists are the maximum amount a health plan will reimburse drugstores for generic drugs, based on prevailing market conditions. In contract negotiations, drugstores that agree to join a plan’s network accept the drug plan’s MAC lists (along with dispensing fees) as reimbursement for generics. MAC lists are widely used. Forty-five state Medicaid programs now use MAC lists, up from 26 states in 1999.
Moreover, the Government Accountability Office (GAO) has reported that most independent drugstores already hire powerful Pharmacy Service Administrative Organizations (PSAOs) to collectively bargain on their behalf with pharmacy benefit managers (PBMs) and other payers. The contract provisions that PSAOs negotiate include reimbursement rates, payment terms, and audits of pharmacies.
The bill would also increase costs and risk patient safety by undermining the use of mail-service pharmacies for those with chronic conditions like high blood pressure and rheumatoid arthritis.
“Now is not the time for new government mandates that raise prescription drug costs and undermine competition,” said PCMA President Mark Merritt.
The following research overwhelmingly shows MAC lists reduce drug costs:
- A Health and Human Services Office of Inspector General (OIG) report noted “the significant value MAC programs have in containing Medicaid drug costs.” The OIG also recommended that states strengthen MAC programs, not weaken them.
- A white paper, by a Federal Trade Commission expert, notes that “legislative or regulatory measures that limit, restrict, or interfere with MACs are likely to have several unintended adverse consequences,” including higher prices and tacit collusion among pharmacies.
- A Visante analysis of more than 800 drugs likely to be impacted by legislation restricting the use of MACs found that MAC legislation could increase costs by 31% to 56% for affected generic prescriptions.