Merritt: America’s PBMs Pledge to Advance Access, Quality Agenda in ‘04; Reject Trial Bar, Retail Pharmacy Lobby Special-Interest Schemes

Washington, DC; 01.21.04 — Mark Merritt, President & CEO of the Pharmaceutical Care Management Association (PCMA) released the following statement on President Bush’s State of the Union address. PCMA is the national trade association representing pharmaceutical benefit managers (PBMs):

“Last evening, President Bush set forth an ambitious health care agenda for 2004 focused on expanding senior and disabled beneficiaries’access to prescription drugs through a Medicare drug discount card; expanding access to coverage for the uninsured; improving health care quality and outcomes through enhanced information systems; and eliminating frivolous lawsuits.

In identifying these health care priorities, President Bush has set the stage for a vigorous national debate about how to expand working families’and seniors’access to quality health coverage and important benefits, including prescription drugs, and how best to stem the tide of rising health care costs.

During the coming year, PCMA and its member companies pledge to work with the Bush Administration, Members of Congress, consumers, employers, and others in helping to advance an agenda that builds on the very best that the private sector has to offer.

As equally important, we will be vigilant in guarding against special-interest proposals that serve only to advance the political agenda of the trial bar, big drug makers, and retail pharmacy lobby and that do nothing to improve access to prescription drugs or improve health care quality.”

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614

NCPA-funded ’study’looks at only six local pharmacies

Merritt: ‘Study is Obvious Attempt to Deflect Attention Away from Retail Pharmacies’ Contribution To Higher Drug Prices’

Washington, DC; 01.16.04 — Still reeling from passage of a Medicare prescription drug bill they opposed, the National Community Pharmacists Association (NCPA) is continuing its effort to try and convince America to do away with the cost-savings tools offered by pharmaceutical benefit managers (PBMs), the Pharmaceutical Care Management Association (PCMA) said today. Their latest salvo: a new “study”published in the Journal of American Pharmacists Association alleging that PBMs actually drive prescription drug prices higher.

“This study is an obvious attempt to deflect attention away from retail pharmacies’contribution to higher drug prices,” said PCMA President & CEO Mark Merritt in commenting on the new research. “The reason that PBMs are at the heart of administering the new Medicare drug benefit is because the nation’s policymakers and health experts know PBMs offer the best, most affordable way for consumers, including seniors, to get prescription drugs. The retail pharmacy lobby would better off to accept this fact and find ways of their own to make drugs more affordable. Funding these studies adds nothing to the debate and only works to undermine their own credibility.”

The new “research,”based upon data from a mere six local pharmacies and 129 prescriptions, claims that PBMs actually increase the cost of prescription drugs â??an assertion the retail pharmacy lobby tried unsuccessfully to sell to policymakers and reporters during the recent Medicare prescription drug debate. This argument has failed to gain traction for two key reasons:

1) Independent government data documents the savings provided to consumers by PBMs:

According to a January 2003 report by the General Accounting Office, PBMs protect federal workers from paying higher drug prices at the retail pharmacy counter. For drugs dispensed at the retail pharmacy counter, PBMs negotiated discounts of 18 percent below what consumers would pay in cash at the retail pharmacy counter for 14 brand name drugs and 47 percent below what consumers would pay for 4 select generic drugs. Mail-order pharmacy savings were even greater. 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.
The retail pharmacy’s key goal during Medicare â??the enactment of the so-called Cantwell “transparency”amendment â??would have added $40 billion dollars to the cost of a Medicare prescription drug benefit, according to the Congressional Budget Office.
2) Overwhelming evidence documents retail pharmacy’s role in making drugs more expensive:

National Public Radio recently looked at the issue of retail pharmacy generic drug pricing. According to the transcript, “Last week, our local CVS Pharmacy here in Washington, DC, cited us a price on 100 tablets of generic Prozac, $135.99. At an Eckerd’s drugstore, it was a bit higher, $140.19. At Rite Aid, though, a hundred tablets of generic Prozac cost a lot less, 46.99. It was even lower at Costco, 28.69, and lower still at Sam’s Club, $27.57–excuse me, 54 cents. That’s a difference of $112.65. We checked this out after we saw a story out of a Houston news station, KHOU, which found similar variances there. The results begged the question: Why?”*
Huge generic mark-ups by retail pharmacies have led to wide disparities in prices between retail pharmacies, even within the same city. A study conducted by a New York Assemblyman found that individuals living in largely minority neighborhoods in New York City paid higher drug prices than their counterparts in more affluent neighborhoods. The cost of prescription drugs sold at major chain stores across the city varies as much as 20 percent, with the highest rates charged in the poorest neighborhoods, state Assemblyman Jeff Klein revealed yesterday.**
An ABC News affiliate’s investigation of Detroit-area pharmacies revealed that some area pharmacies were inflating the price of a generic prescription that costs $2 to as much as $100. These huge markups by retail pharmacies amounted to more than 4000 percent in some cases. ***
More than 1 million Wisconsin residents with no prescription drug coverage face prices on popular drugs that can vary up to 51 percent from store to store, a statewide pricing survey shows. The pricing survey of 23 drugstores across the state, conducted by AARP of Wisconsin and Wisconsin Citizen Action, showed substantial disparity in retail prices for five common prescription drugs: Lipitor, Norvasc, Prilosec, Plavix and Celebrex. On average, the five drugs varied by more than 34 percent between the most and least expensive prices in the survey. ****
According to a study by the Office of Inspector General of the Department of Health and Human Services, pharmacies typically receive discounts of 44 percent or more on the wholesale cost of generic drugs. In some cases, pharmacies acquire generic drugs for as much as a 72 percent discount. *****
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* “Talk of the Nation: Prescription drug pricing,”National Public Radio, January 13, 2004
** “Rx Chain Pain$,”New York Post, June 9, 2003
*** Wilson, Steven, Investigation: Prescription Drugs, ABC 7 Detroit Now, September 2002
**** “Huge variation found in drug prices,”Milwaukee Journal Sentinel, March 7, 2002
***** US Department of Health and Human Services Office of Inspector General, “Medicaid Pharmacy: Actual Acquisition Cost of Generic Prescription Drug Products,”March 2002

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614

Merritt: Data Are ‘Sobering Reminder to Policymakers to Preserve PBM Tools’

Washington, DC; 01.08.04 — New government data released today finds that pharmaceutical benefit managers’(PBMs) tools and techniques helped lower the rate of growth in prescription drug spending in 2002 and provides a fresh reminder to policymakers to preserve PBMs’ability to lower consumers’and purchasers’prescription drug costs, the Pharmaceutical Care Management Association (PCMA) said today.

The new data is contained in a report released today by researchers from the Centers for Medicare and Medicaid Services (CMS) and published in the current issue of Health Affairs.

“Today’s data provide fresh evidence that PBMs’tools and techniques have helped to lower the growth rate in prescription drug spending,”said PCMA President Mark Merritt. “While it may be tempting to some politicians to play election-year politics with health care, including PBMs, these data are a sobering reminder to policymakers to preserve PBMs’ability to lower prescription drug costs for working families and small businesses.”

The report finds that the growth rate for prescription drugs decelerated for the second consecutive year. In 2000, the growth rate in prescription drug spending was 17.1 percent. In 2001, it declined to 15.9 percent. In 2002, it decelerated further to 15.3 percent.

The report also finds that state Medicaid programs and private purchasers made greater use of PBM techniques â??including preferred drug lists, prior authorization for select drugs, step therapy, and flexibility and innovation in drug benefit design â??thereby contributing to a decline in the rate of growth.

“PBMs are the one proven avenue in the private sector to lower prescription drug prices,”added Mr. Merritt. “Without PBMs, consumers would be paying more and the nation’s drug spending tab would be far higher.”

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614

GAO Report on Effects of Using Pharmacy Benefit Managers on Health Plans, Enrollees, and Pharmacies