(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) issued the following statement in response to today’s release from the independent drugstore lobby. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which lower the cost of prescription drugs for more than 200 million Americans with coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare Part D:

“At a time when consumers, large employers, small businesses, labor unions, health insurers, and the Medicare program are all embracing the PBM model as a proven avenue to lower prescription drug costs and improved safety and quality, the independent drugstore lobby continues to march in the opposite direction.

“Regrettably, the drugstore lobby’s mindset — attacking innovation and preaching a return to an unsustainable system â?? underscores a clear disconnect from the real challenges facing the delivery system here and now.

“Since 2003, no less than 8 separate independent, government studies and analyses â?? including those from the Government Accountability Office (GAO), Congressional Budget Office (CBO), Federal Trade Commission (FTC), Department of Justice (DoJ), Centers for Medicare & Medicaid Services (CMS), and Harvard Business School (HBS) â?? have validated the PBM business model and the substantial savings generated by PBMs for consumers and private and public payors. The nation’s most sophisticated purchasers rely on the PBM model because they know it means lower costs, improved safety, more pharmacy choices, and a better way to deliver prescription drugs.

“According to an analysis from PricewaterhouseCoopers, over the next decade PBMs will save consumers and payors more than $1.3 trillion dollars on prescription drug costs. PBMs are the one entity in the drug supply chain working to lower drug costs for consumers and payors. Under the old system, drugmakers and drugstores had free rein to charge consumers as much as they wanted and consumers either paid high prices or did without their prescription drugs. Clearly, that system was not sustainable. PBMs have leveled the playing field for consumers and employers and are driving down the cost of prescription drugs. The contrast with the old system couldn’t more be clear.”

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

Mail-Service Pharmacy Option Provides Cost-Effective Maintenance Medications to Individuals Managing Chronic Illnesses

TRICARE Could Save $1.5 Billion by Expanding Mail-Service Pharmacy Option

(Washington, DC)—The US Senate took an important step forward yesterday in helping more than 9 million TRICARE beneficiaries lower the cost of their maintenance prescription drugs and improving safety by expanding their access to the mail-service pharmacy option, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which work to lower the cost of prescription drugs for more than 200 million Americans with coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare Part D.

“Yesterday, the US Senate sent a clear message that 9 million TRICARE beneficiaries should have expanded access to the mail-service pharmacy option,” said PCMA President Mark Merritt. “Mail-service pharmacies provide deeper discounts than retail pharmacies on maintenance medications for the chronically ill, improve safety and compliance, and have the convenience of home delivery.”

Yesterday, the US Senate approved S. 2766, “the National Defense Authorization Act for FY 2007,” by a vote of 96-0. The $517.7 billion FY07 defense authorization bill includes a wide range of provisions related to national security and military readiness, including a provision expanding TRICARE beneficiaries’ access to the mail-service pharmacy option. TRICARE is the Department of Defense (DoD) agency that administers the health care plan for the 9.2 million eligible beneficiaries worldwide. These beneficiaries include members of the uniformed services, retirees and their families. The House-defense authorization bill also includes provisions expanding access to the mail-service pharmacy option. The two defense authorization measures will now have to be reconciled in conference committee.

The Congressional Budget Office estimates that the DoD will save $1.5 billion from 2007-2016 by moving toward the mail-order pharmacy option. According to a June 9, 2006 analysis, “CBO estimates that the savings from transferring prescriptions from retail pharmacies to the TRICARE mail-order program (TMOP) would be about $54 million in 2007, $593 million over the 2007-2011 period, and $1.5 billion over the 2007-2016 period.”

Other independent and government data also confirm the value of the mail-service pharmacy option. In January 2006, researchers at the Centers for Medicare & Medicaid Services (CMS) identified the mail-service pharmacy option as one of four key factors driving the rate of growth in prescription drug spending to a ten-year historic low and down more than 50 percent since 1999. For its part, the Lewin group has found that mail-order pharmacies could save the US health system as much as $177.9 billion from 2006-2015.

The mail-order pharmacy option is an important tool for individuals managing chronic conditions. While patients with short-term acute-care needs typically receive 30-day prescriptions in the retail pharmacy setting, patients with chronic conditions such as high-blood pressure and high cholesterol can be better served by the 90-day option offered by mail-order pharmacies. The 90-day mail-order pharmacy option offers increased savings and, since medications can be automatically delivered as each fill ends, helps consumers better comply with their prescription regimen. The home-delivery feature of mail-order pharmacies is of particular importance to frail elderly and disabled individuals with limited mobility. Mail-order pharmacies have pharmacists available over the phone 24/7 to assure consumers the ability to ask and get the answers for any questions they may have about their medications.

In recent years, a number of large, sophisticated purchasers in the commercial marketplace have embraced the mail-service pharmacy option as a pathway to maintaining a comprehensive, affordable drug benefit for their employees and dependents. A Fall 2004 survey of 11,697 consumers with drug benefits provided through 20 mail-service pharmacies administered by PBMs and retail pharmacies found high satisfaction in excess of 95 percent on a wide range of measures, including the condition of the drugs received; the correct drugs being delivered; and the ease of refilling prescriptions.

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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

New CMS Survey confirms the Top 20 Plans Have Billing Cycles of 15 Days or Less

(Washington, DC)—A new survey released by the Centers for Medicare & Medicaid Services (CMS) finds that Medicare prescription drug plans (PDPs) are paying pharmacists “promptly,” with all of the top 20 PDPs having billing cycles of 15 days or less, while eight reported an even shorter billing cycle of 7-10 days, the Pharmaceutical Care Management Association (PCMA) said today. This study confirms that pharmacists are typically paid in 30 days or less in keeping with the pledge made by PCMA member companies and corresponding to payment schedules of how doctors and hospitals are paid under Medicare Parts A & B, prompt payment laws in 43 states, and the federal employees’ health plan. PCMA member companies sponsor five national prescription drug plans (PDPs) and act as a subcontractor for other PDPs and Medicare Advantage plans.

“These data confirm that pharmacists are being paid promptly in Medicare Part D just as they are in the commercial market. Nonetheless, policymakers should be concerned that this issue has become a Trojan horse for an extremely expensive agenda in which the drugstore lobby wins and consumers lose,” said PCMA President Mark Merritt. “This agenda includes mandating a six-fold increase in generic dispensing fees, expensive changes in Medication Therapy Management programs and other provisions that would cost billions of dollars without offering any corresponding value in return.”

CMS surveyed the top 20 plans, which account for 94 percent of all PDP enrollment. According to the survey:

All of the top 20 PDPs have a billing cycle of 15 days or less, with 8 of the top 20 reporting a billing cycle of 7-10 days;

18 of the top 20 PDPs pay pharmacies within 30 days of receipt of first clean claim in the billing cycle. The other two PDPs have contract terms that generally lead to payment within 30 days, but not necessarily in all cases;

In addition, CMS also stated that, “outside of Medicare, payment within 30 days is largely the industry standard, indicating that the payment timelines in Medicare are comparable to or better than those that exist elsewhere in the health insurance industry.”
PCMA strongly believes CMS’ findings underscore plans’ commitment to paying all claims within 30 days or less of receipt, while also serving to refute charges of the contrary by the drugstore lobby. Through legislative efforts, the drugstore lobby is seeking to impose restrictive claims-payment standards and also mandate ‘one-size-fits-all’ Medication Therapy Management (MTM) programs and excessive generic dispensing fees.

Last month, PCMA released a study from the Moran Company that found the prompt pay and MTM provisions in S. 2563, a proposal sponsored by Senator Thad Cochran (R-Miss.), would increase costs to seniors and the Medicare program by at least $9 billion over ten years. The study was conducted by Steve Lieberman, Partner at the Moran Company, and the former lead health analyst at the Congressional Budget Office (CBO) from 1999-2004. Mr. Lieberman also served as Senior Advisor to the CMS Administrator and helped write the regulations implementing the Medicare Modernization Act. PCMA requested a cost analysis of S. 2563 because the provisions are even less onerous than the other, more extreme measures pending in Congress, including two other bills, HR 5182 and HR 5166 that would increase costs more than $9 billion.
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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

(Washington, DC)—The cost of legislation currently before Congress implementing the drugstore lobby’s special-interest agenda has reached at least $10 billion â?? and is likely to go far higher once the final numbers are tallied, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which drive prescription drug costs lower for more than 200 million Americans with health coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare.

PCMA has serious concerns that the drugstore lobby’s agenda on Capitol Hill would result in working families, seniors, military personnel, and taxpayers paying far more for prescription drugs with no corresponding benefit. On just a handful of key issues â?? supporting prompt pay and medication therapy management legislation and opposing Medicaid reform and the mail-order pharmacy option, the cost to consumers and the federal government would top $10 billion:

1. Supporting Medicare Prompt Pay/Medication Therapy Management Mandate. Cost: At least $9.4 billion. A key priority of the drugstore lobby is to implement legislation mandating unprecedented timeframes for payment of pharmacy claims in Medicare Part D and rigid and inflexible rules on how Part D plans structure their medication therapy management (MTM) programs. According to an analysis of a proposal sponsored by Senator Thad Cochran (R-Miss.) and conducted by Steve Lieberman at the Moran Company, this proposal would increase costs to seniors and the Medicare program by at least $9.4 billion over ten years, representing $7.7 billion in higher costs to the federal government and $1.7 billion in higher beneficiary premiums. Mr. Lieberman is the former lead health analyst at the Congressional Budget Office.

2. Opposing the Administration’s Proposed Adjustment of Medicaid Overpayments to Pharmacies. Cost: At Least $1.3 billion. Medicaid overpayments to pharmacies are well-documented. According to a June 2005 report from the HHS Office of Inspector General, Medicaid has overpaid pharmacies by an average of 47 percent. In its budget proposal, the Administration has proposed adjusting for these overpayments to pharmacists and saving taxpayers $1.3 billion. The drugstore lobby has vowed to defeat efforts aimed at adjusting for Medicaid overpayments to pharmacies.

3. Opposing the Mail-Order Pharmacy Option in TRICARE. Cost: $1.5 billion. The Congressional Budget Office (CBO) estimates that the Department of Defense will save $1.5 billion from 2007-2016 by moving toward the mail-order pharmacy option in the TRICARE program. According to a June 9, 2006 analysis, “CBO estimates that the savings from transferring prescriptions from retail pharmacies to the TRICARE mail-order program (TMOP) would be about $54 million in 2007, $593 million over the 2007-2011 period, and $1.5 billion over the 2007-2016 period.” Regrettably, the drugstore lobby is fighting to keep drugs costs higher for the nation’s military, dependents, and retirees.

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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

Mercer Survey Finds Demand for Pharmacists ‘Skyrocketing’
(Washington, DC)—An aging population, growing numbers of retail pharmacies, and new medications are driving a “skyrocketing” demand for pharmacists, according to a new survey released yesterday by Mercer Human Resource Consulting. These data are the latest to suggest a robust job market over the next ten years for pharmacists in chain drugstores, supermarkets, independent pharmacies, hospitals, and mail-service pharmacies, the Pharmaceutical Care Management Association (PCMA) said today.

“There’s no doubt about it — pharmacy is one of the nation’s hottest professions,” said PCMA President Mark Merritt. “All pharmacies â?? chains, independents, and mail-services pharmacies â?? are competing hard to fill open positions and entice pharmacists to join their ranks. With an aging population, ever-expanding numbers of drugstores, and increased reliance on prescription drugs, the long-term growth prospects for pharmacists are robust and strong.”

The new survey, 2006 Pharmacy Compensation Survey—Spring Edition, found that the strong demand for pharmacists and related professions is driving income levels higher as pharmacies compete to fill positions. According to the survey, the expected 2006 median total cash compensation for a staff pharmacist is $98,300 compared to $93,300 in 2005, an increase of 5.4 percent. Similar increases were also seen for other related pharmacy professions, including pharmacy operations managers, pharmacy team managers, clinical pharmacists and technicians, and recent pharmacy graduates. Since 2004, the average total cash compensation for staff pharmacists has increased by nearly $10,000. The Mercer survey contains detailed information on pay levels and pay practices for pharmacy personnel reported in more than 380 metropolitan areas across the United States.

Numerous other data and reports suggest that the pharmacy profession is a growth opportunity:

Bureau of Labor Statistics. A recent report from the US Department of Labor’s Bureau of Labor Statistics (BLS) found that pharmacists enjoy “high salaries and good job prospects,” and that employment of pharmacists is expected to grow “faster than average through 2014,” due in part to “coverage of prescription drugs by a greater number of health insurance plans and Medicare.”[1]

Money Magazine/Salary.com Survey. In April 2006, Money magazine and Salary.com released their annual list of Best Jobs in America and ranked “pharmacist” at number 9. According to the report, the pharmacist profession can expect ten-year job growth prospects of 25 percent. In addition, it notes that “demand for pharmacists is exploding as the population ages and new medications are developed. By 2010 the number of prescriptions filled is expected to rise 27 percent to 4.1 billion.” The report added that “Pharmacists are in such demand that graduates today can expect multiple job offers, signing bonuses and $90K-plus salaries.”[2]

NCPA â?? More Drugstores, Higher Sales. While the Mercer survey examined growth in the job market for retail pharmacies, recent data confirms this robust growth is also being experienced by independent pharmacies. According to the National Community Pharmacists Association (NCPA), prescription volume and sales are up at independent pharmacies, and the number of independent pharmacy stores is on the rise.[3] Independent pharmacy owners earn more than $200,000 per year in discretionary profit per store, with many independent pharmacists owning several stores.

AACP. According to the American Association of Colleges of Pharmacy (AACP), the US could face an estimated shortage of 157,000 pharmacists by 2020. However, the AACP also notes that interest in the pharmacy profession continues to grow, with record numbers of candidates graduating with a doctor of pharmacy degree in 2004.[4]
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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.

[1] Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2006-07 Edition, Pharmacists, available at http://www.bls.gov/oco/ocos079.htm

[2] “Money Magazine and Salary.com Announce the Best Jobs in America,”
April 12, 2006. Available at http://money.cnn.com/magazines/moneymag/bestjobs/?cnn=yes

[3] National Community Pharmacists Association, “Number of Independent Pharmacies on the Rise,” April 28, 2006, on the Internet at http://www.ncpanet.org/news_press/press_releases/2006/
number_of_independent_pharmacies_on_the_04-28-2006.shtml

[4] American Association of Colleges of Pharmacy (AACP), “New Report Reveals Interest in Pharmacy Remains as Enrollment Continues to Grow,” Press Release, March 14, 2005. Available at http://www.aacp.org/site/tertiary.asp?TRACKID=&VID=2&CID=1192&DID=6879

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

PCMA President Mark Merritt’s Testimony

Merritt: ‘Medicare Drug Plans Are Providing High Quality, Cost-effective Drug Coverage’

Plans Achieving Deeper-than-Expected Average Discounts of 27 percent

Cautions Committee about Policy Options That Could Undermine an Affordable Drug Benefit

(Washington, DC)—Testifying today before the House Ways and Means Committee on the Medicare prescription drug benefit, Pharmaceutical Care Management Association (PCMA) President Mark Merritt reported how Medicare drug plans have resolved early implementation challenges and are achieving better-than-expected premiums and discounts in Part D, the association said today. Mr. Merritt also cautioned the Committee about policy options that could undermine Medicare’s ability to maintain an affordable benefit.

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.

“Despite early challenges associated with the largest expansion in Medicare in more than forty years, the proven PBM tools utilized by Medicare drug plans are providing high quality, cost-effective drug coverage to almost 40 million Medicare beneficiaries,” said Mr. Merritt. “The vigorous competition between Part D plans is driving deeper-than-expected discounts of 27 percent for America’s seniors.”

While meeting and exceeding the challenges in Medicare Part D, Mr. Merritt also cautioned the Committee about policy options that could undermine Medicare’s ability to maintain an affordable benefit for beneficiaries, including:

Access to Generic Drugs. A recent PCMA analysis found that over the next five years, seniors and the Medicare Part D program could potentially save, at a minimum, more than $23 billion as at least 14 major brand-name drugs commonly used by seniors are slated to become available in generic form. However, these savings are at risk as special interest groups continue efforts aimed at undermining generic alternatives coming to market.

Mail-Service Pharmacy. The mail-service pharmacy option is an important tool for individuals managing chronic conditions and offers increased savings and patient compliance. According to an August 2005 report from the Lewin Group, mail-order pharmacies provide savings of an additional 10 percentage points compared to retail pharmacies and will save the system at least $78 billion through 2015. PCMA strongly encourages policymakers to resist efforts to erode this important cost-saving option for beneficiaries in Medicare Part D.

Drugstore Lobby Agenda. After initially opposing the new prescription drug benefit, the drugstore lobby is now pushing a legislation that would increase costs to the Medicare program and to beneficiaries, an agenda that includes:
Prompt Pay/MTM/Dispensing Fees. Legislation that would mandate increased generic fees, require pharmacy payment within 14 days or less; and place new “one-size-fits-all” restrictions on Medication Therapy Management (MTM) programs. This legislation would result in at least $9.4 billion in added costs to the Medicare program and to beneficiaries;

Collective Bargaining Rights for Independent Pharmacies. The independent pharmacy lobby is also pushing HR 1671, legislation that would provide independent pharmacies with unprecedented and sweeping collective bargaining rights both in Medicare and the commercial marketplace. This proposal is one of the most anti-consumer proposals introduced in this Congress and would provide pharmacists a license to collude to raise prescription drug prices in Part D and elsewhere in the system.

Elimination of the late enrollment penalty. As 2006 is a transition year, PCMA recognizes the flexibility from all stakeholders in Part D is critical. While not opposing elimination of the penalty in 2006, eliminating the penalty in coming years could be problematic.

Pharmacy Management Tools. As evidenced already in the benefit, pharmacy management tools are a proven avenue to lower drug costs and expanded access. The less flexibility given to Pharmacy and Therapeutics (P&T) committees in designing formularies and utilizing other proven tools, the less effective the formulary will be with respect to quality improvement and cost-savings.

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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

(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) released the following statement. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which drive down the cost of prescription drugs for 200 million Americans with drug coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare:

“Since 2003, four separate, independent studies conducted by federal government agencies â?? the Federal Trade Commission, the Government Accountability Office, the Centers for Medicare & Medicaid Services, and the Congressional Budget Office â?? have concluded that PBM mail-service pharmacies provide deeper savings than retail pharmacies; broad access to generic drugs; and are helping to drive overall prescription drug expenditures lower for consumers and public and private payors. For those lobbying groups and others who may not be familiar with or choose to ignore these studies, PCMA is pleased to reiterate them yet again:

Ã?· The Federal Trade Commission (FTC) has found that mail-order pharmacies provide more savings than retail pharmacies and dispense lower-cost generic drugs at roughly the same rate as retail pharmacies. In a direct rebuttal to one of the drugstore lobby’s longstanding attacks on mail-order pharmacies, in August 2005, the FTC released a report finding that “prescription drug plan sponsors generally paid lower prices for drugs purchased through PBM-owned mail-order pharmacies than for drugs purchased through mail-order or retail pharmacies not owned by PBMs.” The FTC report flatly calls “without merit” the retail pharmacy industry’s charge that PBMs are engaging in “self-dealing” when they both administer the pharmacy benefits for a client as well as sell drugs to the client’s members via the PBM’s own mail-order pharmacy. [1]

Ã?· The Government Accountability Office (GAO) has found that mail-order pharmacies in the Federal Employees Health Benefits Program (FEHBP) offer substantial savings, especially when compared to retail pharmacies. According to January 2003 GAO report examining cost savings with mail-order pharmacies under FEHBP, the average mail-order pharmacy price for prescription drugs was 27 percent lower for brand name drugs and 53 percent lower for generic drugs than the price paid to retail pharmacies by cash-paying customers. According to GAO, “Enrollees in the plans reviewed had wide access to retail pharmacies, coverage of most drugs, and benefited from cost savings generated by the PBMs. Enrollees typically paid lower out-of-pocket costs for prescriptions filled through mail-order pharmacies and benefited from other savings that reduced plans’ costs and therefore helped to lessen rising premiums.”[2]

�· The Centers for Medicare & Medicaid Services (CMS) has found that expanded use of mail-order pharmacies and generic drugs has driven the rate of growth in prescription-drug spending to a ten-year historic low. In January 2006, CMS researchers released new data finding that the rate of growth in prescription drug spending in 2004 fell to a ten-year historic low of 8.2 percent and has been reduced by over 50 percent since 1999 alone. CMS researchers identified four key factors driving the rate of growth in drug spending down: 1) rapid growth in the use of lower-price generic drugs; 2) increased use of over-the-counter medications; 3) a shift toward greater mail-order dispensing; and 4) reduced consumption of certain drugs over safety concerns.[3]

Ã?· The Congressional Budget Office (CBO) estimates that the Department of Defense will save $1.5 billion from 2007-2016 by moving toward the mail-order pharmacy option. The Senate’s version of the National Defense Authorization Act contains a provision encouraging the expanded use of mail-service pharmacies. According to a June 9, 2006 analysis, “CBO estimates that the savings from transferring prescriptions from retail pharmacies to the TRICARE mail-order program (TMOP) would be about $54 million in 2007, $593 million over the 2007-2011 period, and $1.5 billion over the 2007-2016 period.”[4]

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[1] US Federal Trade Commission, “Pharmacy Benefit Managers: Ownership of Mail-Order Pharmacies: A Federal Trade Commission Report,” August 2005. Available at http://www.ftc.gov/opa/2005/09/pharmbenefit.htm

[2] Government Accountability Office, “Federal Employee’s Health Benefits: Effects of Using Pharmacy Benefit Managers on Health Plans, Enrollees and Pharmacies,” GAO-03-196, January 2003, Available at http://www.gao.gov/new.items/d03196.pdf

[3] Smith, Cowan, Heffler, et al, National Health Accounts team, Centers for Medicare & Medicaid Services (CMS), “National Health Accounts in 2004: Recent Slowdown Led by Prescription Drug Spending,” Health Affairs, 25, no. 1, (2006: 186-196). Available at www.healthaffairs.org

[4] Congressional Budget Office Cost Estimate of S 2766, National Defense Authorization Act of FY 2007 as reported by the Senate Armed Services Committee on May 9, 2006, page 25, published June 9, 2006. Available at http://www.cbo.gov/ftpdocs/72xx/doc7281/s2766.pdf. CBO did acknowledge that transitioning maintenance prescriptions to mail-order pharmacies from military treatment facilities (MTFs) would result in higher costs of $1.3 billion over ten years. The cost of prescriptions available at MTFs are not subject to the Federal Supply Schedule (FSS) and are not reflective of market-based pricing.

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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

New Study Finds Drugstore Lobby Agenda Would Increase Costs to Seniors & Medicare Program by $9 Billion over Ten Years

(Washington, DC) Testifying today before the House Energy and Commerces Subcommittee on Health, Pharmaceutical Care Management Association (PCMA) President Mark Merritt reiterated Medicare drug plans commitment to working collaboratively with pharmacists in the new Medicare prescription drug benefit and to pay Medicare pharmacy claims within 30 days, the association said today. At the same time, Mr. Merritt warned against legislative proposals that would impose shorter payment cycles and other new rules on drug plans, noting that a new study from the Moran Company has found that a Senate proposal, S. 2563, would increase costs to seniors and the Medicare program by at least $9 billion over ten years.

PCMA is the national association representing Americas 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. PCMA member companies are sponsors of five of the 10 national Medicare prescription drug plans and administer Part D for many other plans.

Medicare drug plans are committed to working collaboratively with pharmacists, doctors, CMS, and others to ensure beneficiaries have access to the drugs they need at an affordable cost, said Mr. Merritt. Medicare drug plans have taken numerous steps to resolve challenges for beneficiaries and pharmacies, including the industry’s pledge to pay clean Medicare pharmacy claims within 30 days.

In his testimony, Mr. Merritt reiterated the industry’s pledge to pay Medicare pharmacy claims promptly. Specifically, PCMA member companies have pledged to pay pharmacies submitting clean electronic Part D claims within 30 days. A 30-day standard is consistent with how doctors and hospitals are paid under Medicare Parts A & B, prompt payment laws in 43 states, and the federal employees health plan. PCMA member companies process tens of millions of pharmacy claims every month. A 30-day standard helps improve quality, ensure accuracy of payments, and combat fraud and abuse.

At the same time, Mr. Merritt expressed strong concern about legislative proposals that would go far beyond industry claims-payment standards and impose one-size-fits-all rules for medication therapy management (MTM) programs. Yesterday, PCMA released a study from the Moran Company finding that prompt pay and MTM provisions in S. 2563 would increase costs to seniors and the Medicare program by at least $9 billion over ten years. The study was conducted by Steve Lieberman, Partner at the Moran Company, and the former lead health analyst at the Congressional Budget Office (CBO) from 1999-2004. Mr. Lieberman also served as Senior Advisor to the CMS Administrator and helped write the regulations implementing the Medicare Modernization Act.

While S. 2563 would add substantial costs to the Medicare program, PCMA requested an examination of this proposal because it appears to be less onerous than the other, more extreme measures pending in Congress, including two other bills, HR 5182 and HR 5166. PCMA believes strongly that both these bills would increase costs even more than the Senate measure and that the $9 billion in added costs is the minimum cost of the various drugstore lobby proposals. For example, HR 5182 would mandate a dispensing fee of $14 for every generic prescription dispensed under Medicare and HR 5166 would require 10-day payment cycles for Medicare pharmacy claims.

The drugstore lobby’s Medicare agenda would increase costs to seniors and the Medicare program by at least $9 billion, with no corresponding benefit, added Mr. Merritt.

A link to the Moran Company cost-estimate study of S. 2563 can be found at The Moran Company Study

Milliman Study on Anti-Mail Legislation in Pennsylvania

Milliman Study on Anti-Mail Legislation in Pennsylvania