PBMs Generate Discounts of 31% at Retail Pharmacies and 45% at Mail-Service Pharmacies

(Washington, DC)—As enrollment begins tomorrow in Medicare’s new prescription drug benefit, the Pharmaceutical Care Management Association (PCMA) will launch a new advertising initiative to call attention to the significant drug price discounts negotiated by America’s pharmacy benefit managers (PBMs) for the Medicare program. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“PBMs are getting the job done in Medicare by driving down drug prices while improving quality and choice for Medicare’s senior and disabled beneficiaries,” said PCMA President Mark Merritt in announcing the campaign.

PCMA’s new ad, which refers to an analysis of drug prices listed on Medicare’s “Prescription Drug Plan Finder” website, shows that PBMs will save beneficiaries who enroll in Part D an average of 31 percent on medications they purchase at retail pharmacies and 45 percent on medications they purchase at mail-service pharmacies. These savings are based on comparing Medicare drug prices to the prices that drug stores charge seniors with no drug coverage. While seniors enrolling in Part D will typically pay only a small co-payment for the medicines they purchase, those paying down a deductible or in the so-called “donut-hole” will pay the negotiated price generated by a PBM or the plan sponsor.

“The degree to which Medicare empowers the use of PBM tools like mail-service, formulary management, retail pharmacy networks, and e-prescribing will be the degree to which savings and quality improvements will be generated for Medicare,” notes Merritt.

###

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:
Tim Brogan
(202) 207-3610

Opinion is Limited in Scope; Affirms that PBMs are Not ERISA Fiduciaries

Law Will Increase Drug Costs for Maine Consumers

(Washington, DC)—In response to today’s ruling by the U.S. First Circuit Court of Appeals affirming a lower court’s decision to uphold Maine’s PBM fiduciary-disclosure law, the Pharmaceutical Care Management Association (PCMA) released the following statement. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“PCMA will continue to vigorously oppose enactment of this kind of legislation,” said Mark Merritt, PCMA’s President and CEO. He noted that “to date only Maine and the District of Columbia have passed such laws while more than dozen other states have rejected similar legislation once they learned that it would increase, not decrease, drug prices for consumers.”

PCMA has already obtained a federal injunction preventing similar fiduciary legislation from going into effect in the District of Columbia on the grounds that it violated the constitutional rights of PBMs. This case is scheduled to be heard by the D.C. Circuit Court in January of 2006.

“Since Maine passed its law in 2003, a number of developments have confirmed the anti-consumer nature of such state micromanagement. In fact, a 2004 analysis by PricewaterhouseCoopers predicted that such legislation would raise drug prices for consumers in Maine by 10% or $1.7 billion over the next decade.

“Also, the U.S. Federal Trade Commission has issued numerous opinions emphasizing that this kind of legislation is anti-competitive and inevitably raises prices with no corresponding benefit to consumers. In fact the FTC has noted that this kind of regulation has “the unintended consequences of limiting competition, thus increasing the costs of pharmaceuticals and ultimately decreasing the number of Americans with insurance coverage for pharmaceuticals.”

In the case of Maine, the Circuit Court opinion was careful to note that the scope of the opinion is limited, in that it applies only to contracts entered into in Maine with respect to PBM customers, or “covered entities” in Maine. In addition the opinion makes clear that PBMs are not ERISA fiduciaries, but rather that their relationship with their customers is a contractual one.

“In its challenge to D.C.’s fiduciary law and in other states that may consider enacting similar legislation, PCMA will continue to assert that PBMs are integral to the administration of ERISA benefit plans and that states cannot legislate in a field solely regulated by federal law.”

###

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:
Tim Brogan
(202) 207-3610

(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) released the following statement on the announcement by the Centers for Medicare and Medicaid Services (CMS) of refinements to the competitive acquisition program (CAP) for drugs administered by physicians. PCMA is the national association representing America’s pharmacy benefit managers (PBMs):

“The latest revisions to the CAP rules represent a step forward towards a more viable voluntary program intended to make it easier and more cost-effective for doctors to administer drug products reimbursed under Medicare Part B.

“A significant improvement is that the price negotiated by CAP vendors with manufacturers will not be factored into the calculation of the average sales price (ASP) reimbursement benchmark. This improvement will encourage price competition among CAP vendors and eliminate the possibility of artificial price floors tied to ASP.

“PCMA will continue to work with CMS to find new ways to provide the incentives, safeguards, and guidelines to encourage participation by specialty pharmacies and other vendors in the CAP program. A successful program will enhance marketplace competition and help ensure that Medicare beneficiaries have access to advanced specialty drug products

###

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:
Tim Brogan
(202) 207-3610

New Standards Will Help PBMs Enhance Savings, Safety, and Provider Adoption

(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) released the following statement on the adoption of electronic prescribing standards for drugs that will be covered under Medicare’s new prescription drug benefit. PCMA is the national association representing America’s pharmacy benefit managers (PBMs):

“By putting forward a uniform standard for e-prescribing in Medicare, the Centers for Medicare and Medicaid Services (CMS) has laid the foundation upon which the private sector can put in place an advanced electronic system that promises to bring the prescribing process into the 21st century.

“We commend CMS for adopting new regulations that will establish one uniform
e-prescribing standard for Medicare, and in doing so, preempting a 50-state patchwork approach. We also want to recognize the leadership of Health and Human Services Secretary Leavitt on this important issue.

“By strengthening a uniform standards approach, these new regulations represent a significant improvement over draft e-prescribing regulations issued by CMS in February.

Patient safety, cost-efficiency, the privacy of medical information, and the adoption of technology by physicians will all be enhanced through Medicare’s uniform standard. By simplifying and speeding the adoption of e-prescribing technology, a uniform standard in Medicare brings the ultimate goal of a single national e-prescribing standard for all payers closer to reality.

“PBMs are leaders in e-prescribing technology and will be prepared to implement Medicare’s standards when the new drug benefit takes effect in January 2006. Using the innovative approaches to e-prescribing they have pioneered in the private marketplace—such as RxHub—PBMs will continue to push e-prescribing to its full potential. By expanding a 21st century technological infrastructure to the prescribing process, PBMs are putting critical information at the fingertips of physicians and helping make medical errors due to poorly written paper prescriptions a thing of the past for America’s seniors.

###

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:
Tim Brogan
(202) 207-3610