At Least 14 Brand-Name Drugs Commonly Used by Seniors Anticipated to Be Available in Generic Form by 2009

Potential Savings at Risk with Special-Interest Efforts to Undermine Generic Alternatives

(Washington, DC)—Seniors and the Medicare Part D program could potentially save, at a minimum, more than $23 billion dollars over the next five years as at least 14 major brand-name drugs commonly used by seniors are slated to become available in generic form, according to a new analysis released today by the Pharmaceutical Care Management Association (PCMA). However, PCMA also warned that these savings are at risk in the coming years as some special interest groups continue efforts aimed at undermining generic alternatives, both in public programs and the commercial marketplace.

“PBMs are America’s lead drivers in the effort to increase generic utilization, which helps improve quality and lower drug costs for patients and payors,” said PCMA President Mark Merritt. “Our analysis shows that in Medicare, increased access to generics has the potential to save, at a minimum, $23 billion dollars through 2010.”

With great attention being given to drugs going off patent or losing exclusivity, PCMA examined the top 100 drugs used by seniors to arrive at a conservative estimate of potential Medicare cost-savings. Over the next five years, 14 brand-name drugs of the top 100 drugs commonly used by seniors to treat conditions such as high cholesterol, depression, heart disease, and hypertension are anticipated to go off patent or lose exclusivity. As soon as drugs become available in generic form, health plans and PBMs work collaboratively with patients, physicians, pharmacists, and payors to increase awareness about generic alternatives and potential cost-savings. Among the key findings of PCMA’s analysis:

Seniors and the Medicare program stand potentially to save at least $23 billion dollars over the next five years as 14 major brand-name drugs commonly used by seniors are expected to become available in generic form. If PCMA’s analysis were expanded beyond the top 100 drugs used by seniors, the savings would be even greater.

For the remainder of 2006, four drugs commonly used by seniors â?? Zoloft (depression), Zocor (cholesterol), Pravachol (cholesterol), and Proscar (prostititis) â?? are expected to go off patent or lose exclusivity and face generic competition. PCMA estimates the potential Medicare savings from using generic versions of these products at approximately $1.5 billion in 2006 and $13 billion over the entire 2006-2010 period.

In 2007, seven drugs commonly used by seniors â?? Norvasc (heart disease), Ambien (sleep disorder), Zyrtec (allergies), Lotrel (heart disease), Coreg (hypertension), Lamisil (fungal infection), and Tequin (antibiotic) â?? are expected to go generic. PCMA estimates the potential savings in 2007 alone at nearly $700 million and about $7 billion over the 2007-2010 period

PBMs Leading the Way in Encouraging Use of Generic Drugs
PBMs work collaboratively with patients, physicians, pharmacists, employers, and health plans to improve quality and lower costs, including through expanded use of generic drugs. CMS researchers recently cited increased use of generics as one of four key factors in driving the rate of growth in drug spend in 2004 to a ten-year historic low. PBMs are at the forefront of innovative efforts to encourage the use of generics, including:

Using tiered formularies that place generic medicines on the lowest cost tier, making them the most affordable option for seniors taking these medicines;

Educating patients on the affordability, safety and efficacy of generic medications in letters to patients and other direct outreach;

Generic drug physician-sampling programs to increase physician awareness of generic drugs;

Waiving co-pays and deductibles when generics are used instead of brands; and

Use of step therapy to ensure that, when clinically appropriate, generics are the first line therapy before more expensive brand medications are used â?? a principle used in other parts of the health system.

Special-Interest Efforts to Undermine Access to Generics
While the savings potential associated with increased access to generics for seniors and the Medicare Part D program are substantial, PCMA warns that these gains could be at risk if some special-interest groups â?? including the brand-name drugmakers’ lobby â?? have their way. These groups are working hard to undermine increased access to generics, both in public programs and in the commercial marketplace, and their push could lead to higher premiums, copayments, and deductibles for beneficiaries. Their efforts include:

Opposing legislation, such as the bipartisan “Lower PRICED Drugs Act,” sponsored by Senators Debbie Stabenow (D-Mich.) and Trent Lott (R-Miss.) that would speed up generics’ market entry. The Stabenow-Lott bill has the support of a broad-based group of organizations, including AARP, Consumers Union, General Motors, and the Coalition for a Competitive Pharmaceutical Marketplace, which represents employers, insurers, and others;
Supporting mandated across-the-board preferred coverage of brand-name drugs in Medicare Part D, regardless of their effectiveness or the availability of clinically equivalent generics;
Supporting the use of legislation and litigation to extend patent protections on brand-name drugs scheduled to go off patent and prevent generics from coming to market as scheduled;
Opposing the use of comparative effectiveness measures to ensure value-based purchasing; and
Opposing generic substitution laws in state Medicaid programs.
In addition, recent news reports have indicated that the Food and Drug Administration’s Office of Generic Drugs, which reviews applications for generic drugs, is facing a backlog of more than 800 applications.

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 200 million Americans with health coverage provided through small businesses, Fortune 500 employers, health insurers, labor unions, and Medicare Part D.

Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605

Specialty Pharmacy Trends & Management Strategies

Seniors, Medicare Program Could Save at Least $23 Billion through 2010 with New Generic Drugs

Seniors, Medicare Program Could Save at Least $23 Billion through 2010 with New Generic Drugs

Seniors, Medicare Program Could Save at Least $23 Billion through 2010 with New Generic Drugs

Drug Benefit Offers Beneficiaries Cost-Savings, Important Consumer Protections

Merritt: ‘As May 15th Deadline Approaches, Beneficiaries Should Enroll & Start Saving Now’

(Washington, DC)—With little less than 40 days remaining for seniors and the disabled to enroll in the Medicare prescription drug benefit, the Pharmaceutical Care Management Association (PCMA) today urged senior groups, pharmacists, drugstores, policymakers, Medicare drug plans, and others to work collaboratively in a final effort to enroll as many beneficiaries as possible and allow them to take advantage of the substantial cost-savings and consumer protections available under Medicare Part D.

“During the first 90 days of the drug benefit, nearly 27 million beneficiaries have seen deeper-than-expected discounts on their prescription drugs and lower Part D premiums,” said PCMA President Mark Merritt. “Now is the time for senior groups, pharmacists, Medicare drug plans, and policymakers to build on this progress and work together for one final push to ensure as many seniors as possible take advantage of this benefit. As we close in on the May 15th enrollment deadline, beneficiaries should enroll and start saving now.”

The Medicare prescription drug benefit is providing seniors and the disabled with substantial cost-savings and important consumer protections. According to a PCMA analysis, Medicare drug plans are saving beneficiaries an average of 35 percent on prescriptions purchased at retail pharmacies and 46 percent for drugs dispensed through mail-service pharmacies.

In addition to providing cost-savings for seniors, the Medicare prescription drug benefit also provides important consumer protections:

Pharmacy management tools. Pharmacy management tools â?? including increased access to generics, mail-service pharmacies, prior authorization, quantity limits, and other techniques â?? help reduce the real dangers of misuse, overuse, or underuse inherent in an unmanaged drug benefit. These tools are not unique to Medicare and are being used, to varying degrees, in other parts of the system, including Medicaid, the Veterans’ Administration, Members of Congress’ own health plan, and commercial plans.

Exceptions & Appeals Process. Under the Medicare Modernization Act, the Centers for Medicare & Medicaid Services reviews and approves all Medicare drug plans’ formularies. Beneficiaries are empowered to choose a plan whose premiums, deductibles, copayments, and formulary best meet their individual needs. Patients have the ability to receive coverage for any medically necessary drug, whether it is included on a plan formulary or not. If the drug is not included on a plan formulary, the patient can appeal to have the drug covered by their Medicare drug plan. Specifically:

If the drug is not on a Medicare Advantage drug plan (MA) or a Medicare drug plan’s (PDP) formulary, the patient can appeal to their plan for coverage, based on a physician’s determination of medical necessity.

Similarly, a patient may appeal a covered drug’s formulary placement to a lower cost-sharing tier.

If the plan determines that a drug is not medically necessary or is in an appropriate formulary tier, the patient can appeal to an Independent Review Entity.

If necessary, a patient can further request a hearing in front of an Administrative Law Judge and request a review by the Medicare Appeals Council. Medicare requires that appeals must be resolved within 72 hours for standard coverage determinations or within 24 hours in an emergency or life-threatening situation.

Once the drug is determined through the appeal to be medically necessary, the plan must provide coverage for that drug.

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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
Charles Coté 202-207-3605

Seniors, Medicare Program Could Save at Least $23 Billion through 2010 with New Generic Drugs

Specialty Pharmacy Trends & Management Strategies

The Pharmaceutical Care Management Association (PCMA) issued the following statement in response to comments made today by the independent pharmacy lobby, the Association of Community Pharmacists Congressional Network:

“Job number one in Part D for Medicare drug plans, drugstores, and other stakeholders is to save money for seniors and make sure they have access to the drugs seniors need. On that score, we are making significant progress.

“In other parts of the system, drugstores have been overpaid for drugs â?? most notably in the Medicaid program. According to the government’s own data from the HHS Office of Inspector General, Medicaid has been shown to overpay pharmacists for prescription drugs by billions of dollars. The federal government is now trying to avoid making the same mistakes in Medicare.

“So far, it’s working. Medicare drug plans are saving beneficiaries an average of 35 percent on medications purchased at retail pharmacies and 46 percent for drugs dispensed through mail-service pharmacies. Studies conducted by the Government Accountability Office, the Federal Trade Commission, the Congressional Budget Office, PricewaterhouseCoopers, the Lewin Group, and others confirm that pharmacy management tools are helping consumers save big on prescription drug costs.

“We cannot comment on drugstores profits other than to say that making sure they are sufficiently high is not a goal of the Medicare Part D program.”

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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
Charles Coté 202-207-3605