(Washington, DC)— The Pharmaceutical Care Management Association (PCMA) issued the following statement applauding Senator Hillary Rodham Clinton’s (D-NY) July 22nd call for a national, uniform electronic prescribing (e-prescribing) standard:

“PCMA strongly supports Senator Hillary Rodham Clinton’s call for legislation
creating a national, uniform e-prescribing standard. Senator Clinton has a
long-standing commitment to expanding the use of information technology
to improve our nation’s health care system, and her support and understanding of the benefits of e-prescribing to reduce costs and improve quality is consistent with that effort.

“America’s pharmacy benefit managers (PBMs) have been at the forefront of
efforts to implement e-prescribing throughout the entire health care system.
E-prescribing can help increase adherence to drug regimens and provide
patients with information about more safe and cost-effective options, including generic drugs and the mail-service pharmacy option. Regrettably, as Senator Clinton herself has noted, a key barrier to implementing e-prescribing lies with a Medicare standard that sometimes conflicts or duplicates 50 separate state e-prescribing laws currently on the books.

“A bipartisan consensus is emerging that a national, uniform e-prescribing
standard is long overdue. This past Thursday, in a landmark report, the
Institute of Medicine (IoM) issued a set of recommendations for
identifying and preventing medication errors, including a call for all prescriptions to be written electronically by 2010. These common-sense reforms have been lauded by policymakers across the political spectrum, including Senate Finance Committee Chairman Charles Grassley (R-Iowa), as well as by the Centers for Medicare & Medicaid Services (CMS).

“Numerous data suggest that e-prescribing can save the health system tens
of billions of dollars. Public and private purchasers — including small
businesses, Fortune 500 employers, federal and state employee-benefit
plans, labor unions and Medicare and Medicaid — all stand to benefit
from the increased use of e-prescribing that would result from a national,
uniform standard.”

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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.

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

PCMA President Mark Merritt’s Testimony (PDF FILE)

Merritt: ‘Policymakers Have Additional Opportunities to Increase Generic Utilization For Consumers and Payors’

Complete Video of Hearing
Clip: Mark Merritt’s testimony
Clip: Senator Clinton remarks and Mark Merritt’s response:

PCMA Analysis Finds Potential Savings of $49 Billion Over Five Years
With 14 Brand-Name Drugs Losing Patent Protection

(Washington, DC)—Testifying today before the Senate Aging Committee, Mark Merritt, President of the Pharmaceutical Care Management Association (PCMA), highlighted pharmacy benefit managers’ role in promoting the use of generic drugs and urged Congress to act in four key areas to expand consumers’ and payors’ access to cost-effective and clinically proven generics drugs. 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 Fortune 500 employers, health insurers, labor unions, and Medicare.

“Regarding generics, PBMs do as much or more than anyone in America to increase generic utilization where appropriate, resulting in prescription drug spending slowing to its lowest growth rate in the past decade,” said PCMA President Mark Merritt. “However, additional opportunities are available, and policymakers should work to eliminate unnecessary barriers that keep generic alternatives from entering the marketplace.”

At the hearing, Mr. Merritt urged policymakers to act in four specific areas to increase generic utilization, including:

Support S. 2300, legislation sponsored by Senators Stabenow (D-Mich.) and Lott (R-Miss.) and close legal loopholes. Specifically, S. 2300 seeks to reform the Citizen Petition process; reduce the entry when patents are challenged in court; and provide an avenue for additional generic antibiotics through its reforms.

Create a legal pathway for generic biologics. Biologics are drugs to treat complex, chronic conditions and are extremely costly and remain so over a long period of time because of the lack of competition in the market. PCMA believes that Congress should address this issue and not wait until the cost of biologic drugs hits critical mass.

Increase funding for the Office of Generic Drugs. With a large backlog of generic drug applications pending, PCMA supports increased funding to resolve the backlog issue that will only worsen in coming years.

Create a national, uniform standard for electronic prescribing (e-prescribing). PBMs promote e-prescribing, which has great potential to improve quality and promote the use of generic alternatives. However, a patchwork of varying state e-prescribing laws — in addition to the new e-prescribing regulations contained in the Medicare Modernization Act â?? have created sometimes conflicting and duplicative rules. PCMA believes that the adoption of a national, uniform standard for e-prescribing laws would greatly encourage compliance by physicians and others and would lead to greater generic drug utilization.
Increased use of generic drugs has the potential to save both Medicare beneficiaries and the entire health system billions of dollars over the next five years. In April 2006, PCMA released an analysis examining the top 100 drugs used by seniors to arrive at a conservative estimate of potential cost-savings to Medicare and the entire health care system. PCMA found that 14 brand-name 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 during the next five years. Seniors and the Medicare Part D program could potentially save, at a minimum, more than $23 billion dollars over the next five years. When these savings are applied to the entire health care system, the potential savings increases to $49 billion over five years.

Independent government data have also demonstrated the cost-savings associated with increased generic utilization. This past January, researchers from the Centers for Medicare & Medicaid Services (CMS) found that prescription drug spending in 2004 slowed to its lowest growth rate in the past 10 years, rising 8.2 percent. Two of the chief reasons cited by CMS researchers for the slowdown in prescription-drug spending were increased use of lower-cost generic drugs and mail-service pharmacies.

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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.

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

(Washington, DC)—Recommendations set forth today by the Institute of Medicine (IoM) of the National Academy of Sciences to identify and prevent medication errors â?? including a call for all prescriptions to be written electronically by 2010 â?? are on target and should serve to jumpstart a national debate about how best to promote the safety and efficacy of prescription drugs throughout the entire health care system, the Pharmaceutical Care Management Association (PCMA) said today.

“The IoM’s recommendations are common-sense reforms that can improve all Americans’ quality of life and save the health system tens of billions of dollars,” said PCMA President Mark Merritt. “PBMs have been at the forefront of efforts to improve communication among patients, physicians, pharmacists, and payors. PCMA member companies look forward to helping to advance the IoM’s recommendations and putting them into practice.”

PCMA and its member companies have long advocated a national, uniform e-prescribing standard as a key tool to improving quality, promoting safety, and reducing costs. In the commercial marketplace, PBMs have pioneered the most sophisticated e-prescribing infrastructure and other health-information management tools to help employers, health insurers, and others to improve outcomes, promote safety, and reduce costs. Numerous data have shown that e-prescribing technology can save tens of billions of dollars in unnecessary drug spend. E-prescribing can also help increase adherence to prescription-drug therapies and more easily provide consumers information about safer and more cost-effective options, such as generic drugs and the mail-service pharmacy option.

Mr. Merritt added, “A national, uniform e-prescribing standard that physicians and pharmacists can easily use will go a long way toward reducing medication errors and providing huge savings to the system. As a nation struggling with variations in care and increased costs, we can’t afford not to embrace e-prescribing technology.”

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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.

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

Cost Estimate of H.R. 5182

Berry-Jones Bill Would Dramatically Increase Average Cost of Generic Drugs Dispensed through Retail Pharmacies in Medicare Part D

Merritt: Berry-Jones Bill Would Enrich Drugstores at Expense of Seniors, Taxpayers

(Washington, DC)—Medicare legislation sponsored by Representatives Marion Berry (D-Ark.) and Walter Jones (R-N.C.), HR 5182 or “the Medicare FAST Act,” would increase Medicare costs by $55 billion and, in addition, increase beneficiaries’ premiums, cost-sharing, and out-of-pocket costs by more than $30 billion over ten years, according to a new analysis of HR 5182 conducted by the Moran Company and released today by the Pharmaceutical Care Management Association (PCMA).

“The Berry-Jones bill is a recipe for higher prescription drug costs for seniors and the Medicare program,” said PCMA President Mark Merritt. “By almost doubling the average cost of every generic drug dispensed through retail pharmacies under Medicare Part D, the Berry-Jones bill would undermine the very competitive forces that have resulted in deep discounts and lower-than-expected premiums. This legislation might enrich pharmacies, but it would also force seniors to pay billions of dollars more in higher premiums, cost-sharing, and out-of-pocket costs.”

The cost analysis of HR 5182 was conducted by Steve Lieberman, a Partner at the Moran Company, a health-care policy research firm based in Arlington, Va. Prior to joining the Moran Company, Mr. Lieberman served as a senior advisor to the Administrator at the Centers for Medicare & Medicaid Services (CMS) and helped in drafting the regulations implementing the Medicare Modernization Act (MMA). In addition, from 1999-2004, Mr. Lieberman served as the Executive Associate Director and Assistant Director for Health & Human Services for the Congressional Budget Office (CBO), overseeing a staff of 30 focused on health and human resources issues, and where he led CBO’s team working on the MMA.

“The provisions implementing federal ‘prompt payment,’ MTM requirements, and mandating a minimum generic dispensing fee increase Medicare costs by $55.5 billion in FY 2007-2016,” said Steve Lieberman of the Moran Company. Mr. Lieberman also noted that “beneficiaries would pay an additional $12 billion in higher premiums over this period.”

The Berry-Jones bill is one of the most expansive Medicare Part D proposals pending in the 109th Congress. While the Berry-Jones bill has Medicare prompt-pay requirements and medication therapy management (MTM) mandates similar to other proposals introduced on Capitol Hill, the Berry-Jones bill also contains a provision going much further by mandating a minimum dispensing fee of $14 dollars for every generic drug dispensed through retail pharmacies under Medicare Part D. HR 5182 currently has 144 co-sponsors in the US House of Representatives.

Among the key findings from the Moran Company’s analysis of HR 5182:

The Berry-Jones bill would raise Medicare costs by more than $55 billion over the next ten years.

The Berry-Jones bill would increase Medicare beneficiaries’ premiums, cost-sharing, and out-of-pocket costs by more than $30 billion over ten years. The Berry-Jones bill would increase the average annual premium paid by individual Medicare beneficiaries generally by more than $50 per year during the next 10 years.

The Berry-Jones bill would mandate a minimum $14 dollar dispensing fee for every generic drug dispensed through retail pharmacies under Medicare Part D. This mandate alone would result in $58.1 billion in added costs to prescription drug plans, which translates into higher costs to Medicare and higher beneficiary premiums. More than one-half of all prescriptions dispensed under Medicare Part D are generic drugs.

The Berry-Jones bill would institute new timeframes for payment of Medicare Part D pharmacy claims and rigid one-size-fits-all rules for medication therapy management (MTM) programs that would add an additional $9.4 billion in costs to beneficiaries and Medicare during the same ten-year period.

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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.

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

Despite Bold Predictions, 20 States Have Now Effectively Rejected PBM Fiduciary and/or Disclosure Bills in 2006

Consumers, Employers, and Insurers Join Fight Against Bills That Would Drive Prescription Drug Costs Higher

(Washington, DC)—New York, Rhode Island, and Delaware are the latest states to effectively reject PBM fiduciary and/or disclosure laws in 2006, the Pharmaceutical Care Management Association (PCMA) said today. Despite boastful predictions from the National Legislative Association on Prescription Drug Prices (NLARx) and others that anti-PBM legislation would be a slam dunk in the 2006 legislative cycle, thus far 20 states have now rejected PBM fiduciary and/or disclosure bills in the first six months of the year. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“When policymakers realize these ‘one-size-fits-all’ measures increase costs by 10 percent without providing any corresponding benefit, they routinely and soundly reject them,” said PCMA President Mark Merritt. “In states across the country—20 so far this year alone—coalitions made up of consumer, employer, and insurer groups have joined the fight to defeat legislation that would only drive prescription drug costs higher.”

2006 State Update

PBMs are subject to extensive regulation at the state and federal levels. While introducing legislation at the state level to expand PBM regulation is easy to do, history shows PBM proposals are very difficult to enact once policymakers examine the cost-impact these proposals would have on consumers, small businesses, and government programs. Since 2003, numerous bills have been introduced in states to further regulate PBMs. Exactly two bills of strong concern â?? in Maine and the District of Columbia â?? have been enacted since 2003. However, the District of Columbia PBM law has been blocked from taking effect by the US District Court and is currently being litigated.

Twenty States â?? Alabama, Colorado, Connecticut, Delaware, Hawaii, Iowa, Maryland, Minnesota, Mississippi, Missouri, New Hampshire, New York, Oklahoma, Rhode Island, South Carolina, Tennessee, Vermont, Virginia, Washington State, and West Virginia â?? have rejected proposals imposing fiduciary and/or “disclosure” requirements on PBMs.

Nine States â?? Colorado, Connecticut, Delaware, Missouri, New York, Oklahoma, Rhode Island, Tennessee and Washington State â?? have rejected legislation requiring Maine-style fiduciary - disclosure.-Proposals are still pending in New Jersey and Pennsylvania.

Only two states have passed PBM-related bills â?? Mississippi passed a prompt-pay law and Kansas passed a law requiring PBMs, not already licensed as third party administrators, to register with the state’s Commissioner of Insurance.
Legal Update

Since 2003, only two jurisdictions—Maine and the District of Columbia—have enacted any meaningful PBM regulation.

Maine. In April 2005, PCMA petitioned the US Supreme Court to review the First Circuit’s November 2005 ruling upholding a 2003 Maine law designating PBMs as fiduciaries under ERISA and imposing onerous public disclosure requirements. Underscoring the widespread concerns about increased costs associated with the Maine law, four national employer and insurance organizations â?? Business Roundtable, US Chamber of Commerce, American Benefits Council, and America’s Health Insurance Plans â?? filed an amicus brief asking the Court to review the law as well. The US Supreme Court has declined at this time to review the First Circuit’s November 2005 ruling, but could revisit the ruling within the next year in light of pending litigation before the US District Court for the District of Columbia.

District of Columbia. The December 2004 DC District Court injunction blocking the DC’s fiduciary-disclosure law from being enforced currently remains in effect while the merits of the law are litigated. A substantive ruling on PCMA’s motion for summary judgment could be handed down perhaps in late 2006. If a ruling from the US District Court for the District of Columbia conflicts with the First Circuit’s decision, this conflict would afford the US Supreme Court a fresh opportunity to review both the Maine and DC statutes.
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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