Council to Develop Industry Policy on Drug Safety & Tracking; Generic Biologics; Reimbursement

Washington, DC; 02.16.05 — Recognizing the unique and growing role of specialty pharmacy providers in the drug delivery system, the Pharmaceutical Care Management Association (PCMA) has launched a new Specialty Pharmacy Council, the association said today.

Comprised of industry leaders from PBMs, health insurers, and independent specialty pharmacy providers, the new Specialty Pharmacy Council will provide the first-ever national forum allowing the industry to speak with one voice before policymakers, opinion leaders, and others. Council members include:

Caremark Rx, Inc.
Cigna Pharmacy Management
CuraScript Biotech Solutions/Express Scripts
McKesson Specialty Solutions
Medco Health Solutions, Inc.
Option Care
Prescription Solutions
Wellpoint Pharmacy Management

In the coming year, PCMA’s Specialty Pharmacy Council will embark on an ambitious agenda focused on addressing key policy opportunities and challenges in Washington, including:

Effective and safe drug use through clinical management;
Generic biologics;
Drug tracking systems; and
Specialty pharmaceutical reimbursement, including developing an industry
approach to Medicare’s Competitive Acquisition Program
“Specialty pharmacy management is moving to the forefront of pharmacy. By working collaboratively with patients, clinicians, and PBMs, specialty pharmacy providers are providing a model of drug delivery for individuals managing complex conditions through the use of advanced pharmaceuticals,” said PCMA President Mark Merritt. “With PCMA’s new Specialty Pharmacy Council, specialty pharmacy providers have their first-ever national representation that will allow them to speak with one voice in the public policy arena.”

Increasingly, PBMs, insurers, and specialty pharmacy providers are working together in an effort to provide an integrated and seamless pharmacy benefit to consumers and purchasers. As demand for new and costly specialty pharmaceuticals grows rapidly, specialty pharmacy providers are essential to providing tailored pharmacy management, promoting quality, and reining in costs for over thirty different complex medical conditions, such as HIV/AIDS, multiple sclerosis, hemophilia, and rheumatoid arthritis. Specialty pharmaceuticals, including injectibles and biologics, cost as much as $35 billion a year â?? and are growing at double the rate of traditional drug therapies due to expanding development and growing utilization. For private and public payers, including Medicare and Medicaid, the cost and appropriate management of these therapies present an ongoing challenge that serves to underscore the need for effective specialty pharmacy management services.

PCMA will continue to recruit new Council members throughout 2005. PCMA will also host a Specialty Pharmacy Symposium June 6-7, 2005 in New York, NY., as well as the first annual PCMA Specialty Pharmacy Annual Meeting October 24-25, 2005 in Indian Wells, CA.

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

Contact Information:
Phil Blando
202-207-3614

Mail-Service Pharmacy Savings: A Ten-Year Outlook for Public and Private Purchasers

Mail-Service Pharmacy Savings: A Ten-Year Outlook for Public and Private Purchasers

Federal Injunction against Maine PBM Fiduciary Law Remains Fully Intact

If Allowed to Take Effect, Law would Increase Mainers’ Drug Costs by 10 Percent

Washington, DC; 02.03.05 — A federal injunction blocking Maine’s PBM fiduciary-disclosure law remains fully intact and the Pharmaceutical Care Management Association (PCMA) will seek a complete review by the Judge of the federal US District Court of Maine regarding yesterday’s non-binding recommended decision by a Magistrate that the law be enforced, the association said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“Yesterday’s recommended decision conflicts with two prior federal court decisions preliminarily blocking state PBM fiduciary and disclosure laws from taking effect,” said PCMA Counsel John Aromando. “PCMA intends to seek a complete review of this non-binding recommendation by a federal district court judge in Maine.”

Two jurisdictions â?? Maine and the District of Columbia â?? have approved PBM fiduciary-disclosure laws. Federal court decisions in Maine and the District of Columbia have preliminarily blocked these laws from taking effect on the grounds that they violate federal ERISA law and/or represent an illegal takings of proprietary trade secret information. In 2004, ten states rejected similar legislation, including California, New York, Florida, Washington State, Maryland, Minnesota, Mississippi, Kansas, Iowa, and Vermont. In addition, South Dakota approved a disclosure law that does not designate PBMs as fiduciaries.

Numerous data have indicated that PBM disclosure-fiduciary proposals would increase prescription drug costs for consumers, employers, and government. According to PricewaterhouseCoopers, Maine’s fiduciary-disclosure law would increase prescription drug costs for Maine consumers and employers by 10.2 percent over the next ten years â?? or $1.7 billion dollars. Similarly, in 2003, during the Medicare prescription drug debate, Congress rejected a disclosure proposal after the Congressional Budget Office estimated it would increase the cost of the Medicare drug benefit by $40 billion dollars over ten years and increase seniors Medicare part D premiums by more than five percent in 2006 alone.

PBMs administer prescription drug plans for more than 200 million Americans with prescription drug coverage provided through the nation’s small and large employers, Taft-Hartley union plans, health insurers, state and federal-employee benefit plans, and Medicare Advantage health plans. PBMs help drive down the cost of prescription drugs for consumers and plan sponsors â?? on average by 25 percent â?? by negotiating discounts with drug manufacturers and retail pharmacies. These savings are, in turn, passed on to consumers. PBMs also provide consumers with important quality protections, such as disease management and physician and patient education. PricewaterhouseCoopers estimates that PBMs will save consumers and employers $1.3 trillion dollars on prescription drug costs over the next decade.

The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmacy 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; 02.01.05 — Requiring the federal government to directly negotiate prescription drug prices in the new Medicare prescription drug benefit would likely result in reduced prescription-drug choices for seniors and higher drug costs for tens of millions of consumers and employers in the commercial marketplace, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“In the private marketplace, PBMs drive down the cost of prescription drugs by an average of 25 percent for consumers and employers, while providing access to a wide choice of drugs,” said PCMA President Mark Merritt. “Requiring the federal government to directly negotiate prescription drug prices will take away drug choices from seniors and require massive cost-shifting to consumers and employers in the private marketplace. ‘Direct negotiation’ is simply short-hand for higher costs and fewer choices.”

PCMA believes strongly that choice and competition are the best avenues to reining in prescription drug costs throughout the entire health care system and in providing seniors with a high-quality, affordable drug benefit. PBMs administer prescription drug plans for more than 200 million Americans with prescription drug coverage provided through the nation’s small and large employers, Taft-Hartley union plans, health insurers, state and federal-employee benefit plans, and Medicare Advantage health plans.

PBMs help drive down the cost of prescription drugs for consumers and plan sponsors â?? on average by 25 percent â?? by negotiating discounts with drug manufacturers and retail pharmacies. According to PricewaterhouseCoopers, over the next ten years, PBMs will save Medicare beneficiaries and retirees with employer-sponsored coverage nearly $700 billion on the cost of prescription drugs. In 2005 alone, these savings translate to $937 per Medicare beneficiary in private plans.

Seniors have also been clear that they want more choice and competition in Medicare. According to a November 2004 post-election survey of 800 seniors, 72 percent of seniors believe Medicare should offer seniors a choice of drug plans like Members of Congress have. In contrast, just 11 percent of seniors want a drug plan like the one used by the Veterans’ Administration. The poll was conducted by Ayres McHenry & Associates of Alexandria, Va, November 3-7, 2004.

In advocating direct negotiation of prescription drug prices in Medicare, advocates often point to the Veterans’ Administration as a model for the Medicare prescription drug benefit. In a 2000 report examining the viability of moving Medicare to the VA model, the non-partisan US General Accounting Office concluded that this approach would raise prescription drug prices and shift costs to other parts of the system. Specifically, the GAO noted that “mandating that federal prices for outpatient prescription drugs [such as the VA model] be extended to a large group of purchasers, such as Medicare beneficiaries, could lower the prices they pay, but raise prices for others.”

PCMA believes strongly that replicating the VA model in the Medicare prescription drug benefit would yield a program that would lead to fewer drug choices for seniors and higher costs for the commercial marketplace:

The VA model would lead to fewer choices for seniors. The VA national formulary requires access to prescription drugs in 34 classes. By contrast, commercial formularies typically cover drugs in 50 to 100 categories and classes. The new Medicare prescription drug benefit would require coverage for about 146 categories and classes and the current Medicare drug discount card program requires discounts for 209 categories and classes of drugs.
The VA model relies upon a one-size-fits-all national formulary. The VA model relies upon a national formulary, delivering prescription drugs via VA-owned hospitals and pharmacies. The VA acts as the sole purchaser and the only distributor of prescription drugs; participating physicians are required to follow the one national formulary.

The VA model would lead to massive cost-shifting to other parts of the health care system, including the private marketplace. VA drug spending represents about one percent of all prescription drug spending. Medicare beneficiaries, by contrast, are estimated to account for about 40 percent of prescription drug spending. Because the VA drug spending represents only one percent of drug spending, cost shifting is kept to a minimum. Moreover, the VA pays fixed prices for drugs that are established by law. For example, brand-name drugs listed on the Federal Supply Schedule (FSS) are automatically provided to the VA at a 24 percent lower price than average private-sector price. Pulling 40 percent of all drug spending under the VA-style umbrella â?? and requiring an automatic 24 percent discount for brand-name drugs under the FSS â?? would represent a massive disruption in the marketplace and lead to billions of dollars of higher drug costs in other parts of the system.

The VA’s P&T committee structure would raise questions in Medicare. The VA’s pharmacy & therapeutic committee (P&T) representatives â?? the very individuals charged with designing the VA’s formulary â?? are employed directly by the VA. In contrast, private-sector P&T committees â?? including those envisioned to participate in the new Medicare drug benefit through PBMs â?? are comprised of physicians, pharmacists, and other parties with no financial interest in formulary recommendations and make their recommendations based solely upon clinical data. Replicating the VA model in the Medicare program would raise questions about whether Medicare was putting cost considerations ahead of clinical data.
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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmacy benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614