Washington, DC; 02.25.04 — Policymakers seeking to undermine the newly-enacted Medicare prescription drug benefit risk engendering a backlash among seniors who want and value a choice of competing health plans providing prescription drug coverage, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national trade association representing pharmaceutical benefit managers (PBMs).

“Seniors deserve a modernized Medicare program that builds upon the proven success of PBMs in delivering high-quality, affordable prescription drug benefits,”said PCMA President & CEO Mark Merritt. “Regrettably, there has been a rush to judgment by some. Let’s give the program time to work. We challenge policymakers on both sides of the aisle to work collaboratively to ensure the smooth implementation of the Medicare prescription drug benefit and expand the choices available to seniors.”

The Medicare Modernization Act relies on the proven tools and techniques that PBMs have pioneered in other parts of the delivery system. Unions, health plans, small businesses, large employers, state and federal employee benefit plans, and state Medicaid programs all rely upon PBMs to expand access to quality, affordable prescription drug plans. Now, Medicare too is poised to avail itself of PBMs.

Numerous independent government data document the value PBMs bring to the system:

A January 2004 analysis by the Congressional Budget Office found that the savings provided by private plans is comparable to direct government price controls and that “private plans will have strong incentives to negotiate price discounts.”

According to a recent analysis by the Centers for Medicare and Medicaid Services (CMS), the rate of growth in private-sector prescription drug spending is projected to decelerate in 2003 to 13.4 percent â??the fifth consecutive year of decline in the growth rate. CMS projects the rate of growth in prescription drug spending to decline even further by 2005 to 12.4 percent. Taken together, CMS projects that the rate of growth in prescription drug spending will decline by 37 percent from 1999 to 2005. CMS attributes this decline to a variety of factors, including multi-tier formularies, therapeutic interchange, and increased competition in the marketplace.

In January 2003, the General Accounting Office (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. 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.

According to a September 2003 GAO report, prescription drug discount cards administered by PBMs provide consumers â??including Medicare beneficiaries â??comprehensive access to medications and significant savings, as much as 44 percent less than what consumers would otherwise pay at the retail pharmacy counter without a discount card.
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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

Washington, DC; 02.11.04 — Government health data released this morning is a direct challenge to policymakers to preserve PBMs’proven techniques as they work to implement the new Medicare drug benefit, the Pharmaceutical Care Management Association (PCMA) said today.

The data projections were provided by researchers from the Centers for Medicare and Medicaid Services (CMS) and posted on the Health Affairs website. PCMA is the national trade association representing America’s pharmaceutical benefit managers (PBMs).

“PBMs are clearly working to help turn the tide on the rate of growth in private-sector prescription drug spending,”said PCMA President & CEO Mark Merritt. “With the advent of a Medicare prescription drug benefit, policymakers need PBMs more than ever. The challenge now before policymakers as they implement the new drug benefit is to ensure that they preserve in Medicare the same tools and techniques that have helped private purchasers and other public purchasers to lower their drug spending growth rate.”

According to CMS, the rate of growth in private-sector prescription drug spending is projected to decelerate in 2003 to 13.4 percent â??the fifth consecutive year of decline in the growth rate. CMS projects the rate of growth in prescription drug spending to decline even further by 2005 to 12.4 percent. Taken together, CMS projects that the rate of growth in prescription drug spending will decline by 37 percent from 1999 to 2005. CMS attributes this decline to a variety of factors, including multi-tier formularies, therapeutic interchange, and increased competition in the marketplace.

Significantly, the CMS projections do not include projections on the spending associated with a Medicare prescription drug benefit. However, the authors project increased prescription drug utilization in Medicare once the full benefit is available to seniors â??particularly those with no drug coverage now â??in 2006. PBMs will be critical to helping Medicare provide an affordable, sustainable benefit to America’s seniors and disabled beneficiaries.

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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