Merritt: ‘Because of PBMs, Seniors & the Disabled Will Be Paying Less for Prescription Drugs’
Vast Majority of Medicare-Sponsored Drug Discounts Cards to Be Offered or Administered by PBMs

Washington, DC; 03.25.04 — With today’s announcement by the US Department of Health & Human Services that the nation’s leading PBMs have been approved to offer and administer Medicare-sponsored prescription drug discount cards, America’s seniors and disabled beneficiaries are a giant step closer to receiving much-needed discounts on the cost of their prescription drugs, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national trade association representing America’s pharmaceutical benefit managers (PBMs).

“Today’s announcement is a watershed moment for seniors, the Medicare program, and PBMs,”said PCMA President & CEO Mark Merritt. “Beginning in June, Medicare beneficiaries can expect to see discounts on average of 10 â??25 percent on the cost of their prescription drugs. For seniors electing the mail-order pharmacy option, discounts are likely to be even deeper. Because of the discounts PBMs extract from drug manufacturers, seniors will be paying significantly less for their prescription drugs.”

Based upon a preliminary PCMA analysis, PCMA estimates that the vast majority of Medicare-sponsored drug discount cards will be offered or administered by PBMs. According to information released today by HHS, a number of PCMA member companies will offer competing national and regional Medicare-sponsored drug discount cards as well as administer cards in partnership with retail pharmacies and MedicareAdvantage health plans.

PBMs rely upon a full range of tools and techniques to drive down the cost of prescription drugs. Small businesses, labor unions, health plans, and state Medicaid programs all rely upon PBMs to deliver safe, effective and affordable prescription drugs to consumers. Numerous government and independent data confirm that PBMs drive down the cost of prescription drugs â??in some cases, as much as 53 percent below what a cash-paying customer at the retail pharmacy counter would pay. Now, with the enactment of the Medicare Modernization Act, seniors and disabled Medicare beneficiaries are poised to reap the savings and quality improvements that PBMs provide to more than 200 million Americans elsewhere in the health care system.

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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; 03.23.04 — With the Medicare Trustees’Report projecting that Medicare’s long-term viability is being endangered by rising health care costs across the program, the Pharmaceutical Care Management Association (PCMA) today called on policymakers to renew their commitment to preserving PBMs’ability to maximize savings on prescription drugs for both seniors and the Medicare program. PCMA is the national trade association representing America’s pharmaceutical benefit managers (PBMs).

“Today’s report by the Medicare Trustees is a sobering reminder to policymakers that the long-term viability of the Medicare program rests with increased choice and competition,”said PCMA President & CEO Mark Merritt. “More than ever, it is critical that policymakers move forward to implement the Medicare Modernization Act consistent with the goals of expanded choice and increased competition. We challenge policymakers from both sides of the political aisle to renew their commitment to preserving PBMs’ability to negotiate discounts and maximize savings on prescription drugs. Without PBMs participating in Medicare, seniors will likely pay more for prescription drugs and the burden to the program will only increase.”

Numerous independent government data and analyses have documented the value that competing PBMs can bring to the Medicare program. The Congressional Budget Office (CBO) has long asserted that PBMs have the potential to save as much as 30 percent in total drug spending relative to unmanaged purchases of prescription drugs where PBMs can use their full range of price discounts and rebates, utilization control tools, and other tools for encouraging appropriate utilization. CBO has also noted that they expect competing drug plans, including PBMs, to negotiate savings for many prescription drugs that are comparable to those obtained by the federal government through direct negotiation.

Other data also support the superior value that PBMs can bring to the system and help to rein in prescription drug costs. According to a January 2003 report by the US General Accounting Office, a comparison of drug pricing found that competing PBMs used by the Federal Employees’Health Benefits Program (FEHBP) saved enrollees more than state Medicaid programs that negotiate drug prices; on average, 7 percent more on the cost of brand-name drugs and 24 percent more on generic drugs when compared to five state Medicaid programs that negotiate drug prices.

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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

New Polling Data Also Finds Michigan Employers See Mail-Order Pharmacies as ‘Good Idea;’
52 Percent Would Raise Premiums, 18 Percent Would Reduce Benefits if Rx Costs Increase

Washington, DC; 03.22.04 — Legislation that would effectively eliminate the mail-order pharmacy option in the State of Michigan will increase the cost of prescription drugs for Michigan consumers by nearly 10 percent and a new poll of Michigan employers found 52 percent would increase premiums as a result, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national trade association representing America’s pharmaceutical benefit managers (PBMs).

“The human and economic cost of the retail pharmacy lobby agenda is too high a price for Michigan consumers to pay,”said PCMA President & CEO Mark Merritt. “At a time when consumers, employers, and PBMs are working together to drive down the cost of prescription drugs, the retail pharmacy lobby agenda would increase the cost of prescription drugs in Michigan by nearly 10 percent. These proposals are a hidden tax on Michigan’s working families and small businesses.”

The new research was released today by the Michigan Health Purchaser Coalition. The Michigan Health Purchaser Coalition represents consumers, labor unions, small businesses, and manufacturers who are concerned about maintaining access to affordable prescription drugs. The Milliman analysis examined Michigan House Bills 4987, 5437 and 5438 â??the core of the retail pharmacy lobby agenda. Michigan consumers currently have the ability to fill prescriptions both at the retail pharmacy and through the mail-order pharmacy option. Regrettably, these proposals would harm Michigan residents by eliminating the mail-order pharmacy option and increasing pharmacists’reimbursement at the expense of affordable medicines for consumers.

Among the key findings Milliman found in analyzing Michigan House Bills 4987, 5437 & 5438:

The proposals are estimated to increase prescription drug costs for Michigan purchasers by $124 million or 9.5 percent more.
The proposals are estimated to increase prescription drug costs by $36 dollars per person.
In addition to the Milliman analysis, PCMA released new polling data of Michigan employers. PCMA commissioned Ayres, McHenry & Associates to conduct 300 surveys with corporate benefit managers throughout Michigan from March 1-5 to March 8-11, 2004. Three key findings emerged from the survey:

PCMA: Eliminating Mail-Order Pharmacy Option in Michigan Would Increase Costs

Corporate benefit managers overwhelmingly think pharmaceutical benefit managers are a good idea. By a margin of 55 to 21 percent, corporate benefit managers think PBMs are a good idea because they “negotiate lower drug prices from drug companies, thereby saving employers and their employees money on drug costs,” rather than a bad idea because they “just add another middle man between drug companies and employers and their employees.”

By an even more overwhelming margin, corporate benefit managers think mail order pharmacies are a good idea. By a margin of 85 to 11 percent, corporate benefit managers think mail order pharmacies are a good idea because “they allow employees to get drugs conveniently in larger quantities and at a lower cost than at a retail store,” rather than a bad idea because they “hurt retail pharmacies and thereby limit the service and options available to employees.”

If state legislatures require PBMs to make changes that have the effect of raising drug prices by ten percent, most corporate benefit managers say their companies would raise premiums to cover the increase. Fifty-two percent say their companies would raise premiums, 18 percent say they would reduce benefits, and 20 percent say they would just absorb the increased costs.

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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

Court Enjoins Maine Law Based on PCMA’s Arguments

LD 554 Conflicts with Federal ERISA Law, Constitutes Unfair ‘Taking’ of PBM Trade Secrets

Washington, DC; 03.10.04 — Yesterday’s decision by the US District Court in Bangor, Maine to block a new sweeping Maine prescription drug law — LD 554 — from taking effect recognizes the central role PBMs play in delivering affordable prescription drug benefits to consumers and is a reminder to other states considering similar proposals, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmaceutical benefit managers (PBMs).

“In recognizing the central role PBMs play in making prescription drugs more affordable, the Court has put the brakes on Maine’s head-long rush to legislation,”said PCMA President & CEO Mark Merritt. “Given that the Maine law would result in higher prescription drug costs for consumers by giving more power to drug manufacturers, the Court’s decision is both prudent and right on target.”

In the opinion, the Court notes “the centrality of the [PBM] industry in the delivery and cost of health care benefits.” The US District Court’s opinion effectively nullifying LD 554 (”The Act Against Unfair Prescription Drug Practices”) rests on two key findings:

The Court found sufficient grounds that LD 554 conflicts with the federal Employee Retirement Income Security Act (ERISA) by designating PBMs as fiduciaries. Since its inception in 1974, ERISA has been an important avenue for both small businesses and large employers to sponsor health care benefits for their employees and dependents. By imposing additional rules and requirements on ERISA plans, LD 554 conflicts with congressional intent to preserve the uniformity ERISA provides to make health care benefits including prescription drugs more affordable.
The Court found sufficient grounds that by imposing sweeping and unprecedented disclosure of PBMs’ proprietary pricing arrangements, LD 554 represents a “taking” of PBMs’ trade secrets. The ability of a business to protect its trade secrets is a well-established principle in law.
LD 554 — the first of its kind by any State in the Union — was signed into law by the Governor of Maine on June 13, 2003. On September 3, 2003, PCMA filed a motion in the US District Court to stay the law. A hearing was heard before the District Court in early November 2003. Yesterday’s decision by the Court was in response to the November hearing.

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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 Expects PBMs to Negotiate ‘Meaningful’ Savings for Seniors, Foresees Robust PBM Participation in New Discount Card Program

Washington, DC; 03.09.04 — Testifying today before the Senate Aging Committee on Medicare-endorsed prescription drug discount cards, PCMA President Mark Merritt predicted America’s senior and disabled beneficiaries will see “substantial”savings with a choice of competing discount cards when the program becomes operational in June 2004. The program sunsets in January 2006 when the full permanent Medicare drug benefit kicks in. The Pharmaceutical Care Management Association, or PCMA, is the national association representing America’s pharmaceutical benefit manager (PBMs).

“We expect strong and robust participation by PBMs in the new Medicare drug discount card,”PCMA President Mark Merritt told the Committee. “Because of the savings PBMs will be able to negotiate for beneficiaries, we are confident that seniors will see savings, on average, of 10 to 25 percent. For seniors choosing the mail-service pharmacy option, the savings will be even deeper.”

Data from the US General Accounting Office (GAO) and private researchers provide a preview of what seniors should expect with Medicare-endorsed drug discount cards. According to GAO, PBM-administered drug-discount cards enroll about 17 million consumers and save them hundreds of dollars per year, with average savings of 18 percent. In a report published in March 2003, researchers at Brandeis University’s Schneider Institute for Health Policy analyzed more than 3 million pharmacy claims from eight national drug discount card programs for individuals aged 65 and older. For seniors with no supplemental drug coverage â??who pay some of the highest prescription drug prices of all at the retail pharmacy counter — Brandeis found that the total average savings for all prescriptions with a PBM-administered drug discount card was 15.3 percent.

“The Medicare drug discount card represents many beneficiaries’first experience with PBMs â??and we’re optimistic they will like what they see,”added Mr. Merritt. “Seniors will have access to a broad network of pharmacies in urban, suburban and rural settings. Most importantly, because of the drug card, seniors â??including those low-income individuals eligible for $600 in transitional assistance â??will be paying less for their medicines.”

Related Links:
A copy of Mr. Merritt’s testimony

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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

Milliman USA Study On Anti-Mail Service Legislation in Michigan

Milliman USA Study On Anti-Mail Service Legislation in Michigan

Milliman USA Study On Anti-Mail Service Legislation in Michigan

Milliman USA Study On Anti-Mail Service Legislation in Michigan

Milliman USA Study On Anti-Mail Service Legislation in Michigan