May 22, 2013


(Washington DC)— As the U.S. Senate Special Committee on Aging reviews the successful Medicare Part D program, the Pharmaceutical Care Management Association (PCMA) says that greater use of proven pharmacy benefit management tools can reduce costs for the program even further. Part D is the only major federal program that has come in under budget each year since its inception.

“Although PBMs have saved billions in Medicare Part D, even more can be saved if there is the political will to act,” said PCMA President and CEO Mark Merritt.

Below are some ways to reduce pharmacy costs in Part D:

  • Make greater use of preferred and limited pharmacy networks to generate savings. Today, there are more drugstores in the U.S. than McDonald’s, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts combined, creating a highly competitive environment. Greater use of preferred and limited pharmacy networks could save Medicare an additional $35 billion over the next ten years and achieve the savings while meeting Medicare’s pharmacy access standards. A new survey shows that seniors are overwhelmingly satisfied (85%) with their preferred network plan.
  • Allow Plans in Medicare to Negotiate Discounts on Every Brand Drug. Congress should allow price competition among brand drug manufacturers by removing the mandate that “all or substantially all” drugs in Part D’s six protected classes be covered. When manufactures are guaranteed drug coverage, there is no incentive to offer price concessions. This rule has, according the Centers for Medicare and Medicaid Services, increased drug costs by $4.2 billion since the program was enacted.
  • Encourage 90-day Home Delivery Refills for Chronic Medications. Home delivery is popular with patients because its more convenient and less expensive. With mail-service pharmacies, patients can get private counseling over the phone from trained pharmacists seven days a week, 24 hours a day. In a letter to United States Postmaster General, 88 members of the United States House of Representatives touted the value of mail-service pharmacies, saying that “home delivery is the most cost effective way of filling prescriptions for TRICARE beneficiaries, and saves Medicare and Medicaid money as well.”
  • Expedite the Approval of Biogenerics. As costs for expensive biologic drugs increase, so does the urgency to begin the approval pathway for biogenerics. Reducing the number of years a drug company has monopoly pricing power would increase competition and lower costs for payers and consumers. The President’s Budget proposes to limit a biologic’s exclusivity period to seven years. According to the President’s Budget, these changes would result in $3 billion in savings for Medicare and Medicaid.