Independent Drugstore Lobby Agenda Raises Government Costs, Increases Deficit

(Washington, D.C.) — As the independent drugstore lobby descends on Capitol Hill this week to push for costly new government health mandates, the Pharmaceutical Care Management Association (PCMA) continues to highlight how pharmacy benefit managers (PBMs) reduce prescription drug costs and improve benefits for consumers, employers, unions, and public programs.

“The independent drugstore lobby’s agenda is proven to raise costs and increase the deficit,” said PCMA President and CEO Mark Merritt.

The costly independent drugstore lobby agenda includes:

  • Destabilizing Medicare Part D by Imposing Expensive New Mandates: Proposals to require point-of-sale payment of pharmacy price concessions would increase drugstore profits, raise premiums for beneficiaries and increase costs for taxpayers. An analysis by Milliman on direct and indirect remuneration (DIR) in Medicare found that from 2017 through 2026, DIR is projected to save $308.2 billion, and reduce beneficiary premiums by $48.7 billion.The Centers for Medicare & Medicaid Services (CMS) recently found that requiring plans to apply pharmacy price concessions at point of sale would increase government costs by $16.6 billion over 10 years, and increase beneficiary premiums by $5.7 billion. CMS did not impose the mandate in its final Part D rule.
  • Eliminating Lower-Cost Popular Preferred Pharmacy Plans in Medicare: Proposed mandates would increase spending by $21 billion over 10 years, according to research from The Moran Company. The Federal Trade Commission (FTC) wrote a letter to CMS warning that: “Requiring prescription drug plans to contract with any willing pharmacy would reduce the ability of plans to obtain price discounts based on the prospect of increased patient volume and thus impair the ability of prescription drug plans to negotiate the best prices with pharmacies.”Medicare Part D enrollees overwhelmingly favor drug plans featuring lower-cost pharmacies. According to CMS, 99.9% of Part D enrollees are in these plans.
  • Increasing Generic Medication Costs by Gutting the Use of Maximum Allowable Cost (MAC) lists: Legislation would undermine Maximum Allowable Cost (MAC) lists, which are a key cost-savings tool that ensures payers aren’t overpaying pharmacies for generic drugs. Forty-five state Medicaid programs, as well as virtually all Medicare Part D and commercial insurance plans, use MAC lists to reduce costs. The Health and Human Services Office of Inspector General (OIG) touted “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 authored by a former special counsel at the FTC 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.