Marketplace Competition will Lower Costs and Increase Access to Biotech Drugs for Consumers and Purchasers

(Washington, DC)— The Pharmaceutical Care Management Association (PCMA) issued the following statement today in support of Representative Henry Waxman’s (D-CA) efforts to create a legal pathway for Food and Drug Administration (FDA) approval of more affordable safe and effective alternatives to high cost biotech drugs:

“America’s Fortune 500 companies, small businesses, government agencies, unions and, most of all, consumers, want to see competition introduced into the biotech drug market because that is the key to lower prices. PCMA applauds Congressman Waxman’s efforts to address these concerns by seeking to create a legal pathway for FDA approval of lower-cost alternatives to biotech drugs.”

“Biotech drug spend is expected to double from $56 billion in 2004 to $105 billion in 2010.[1] A significant portion of that drug spend will be borne by taxpayer-funded federal government programs. A lack of competition drives the high cost of biotech drugs as manufacturers often price according to what the market will bear.[2]

“A recently published report on biotech drugs found that prices for many biotech products actually increased over time â?? often dramatically.[3] This is in sharp contrast to traditional drugs that are subject to generic competition.

“It is imperative that policymakers seek a legislative solution to the lack of competition to innovator products in the biotech drug industry. The time to act is now to enhance competition in the marketplace to lower costs and increase access for consumers and purchasers.”

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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

[1] Belsey, Mark J., Harris, Laura M., et al. “Biosimilars: Initial Excitement Gives Way to Reality”, Nature Reviews/Drug Discovery, Volume 5, July 2006. Available at: http://www.nature.com/nrd/journal/v5/n7/full/nrd2093.html#a1.
[2] Bishop, Tricia. “What price to save a life? High cost of drugs raises ethical issues.” The Baltimore Sun, February 19, 2006.
[3] Monroe, Douglas C., Potter, Lori, et al, “Kaiser Permanente’s Evaluation and Management of Biotech Drugs: Assessing, Measuring, and Affecting Use”, Health Affairs, 25, no. 5 (2006: 1340 â?? 1346).

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

Lewin Study-Mail-Service Pharmacy Savings

Lewin Study-Mail-Service Pharmacy Savings

Lewin Study-Mail-Service Pharmacy Savings

Lewin Study-Mail-Service Pharmacy Savings

Potential Savings Could Double if More Consumers & Public & Private Payors Utilize Benefit

Lewin Study-Mail-Service Pharmacy Savings

(Washington, DC)—The mail-service pharmacy option is projected to save consumers, the Medicare program, and health insurance plans in the commercial marketplace at least $85 billion on prescription drug costs over the next ten years, according to a new study conducted by the Lewin Group and released today by the Pharmaceutical Care Management Association (PCMA).

The data also suggest that consumers, the Medicare program, and private plans are not taking full advantage of the cost savings available through mail-service pharmacies. Currently, about 20 percent of prescription drug expenditures flow through mail-service pharmacies. Lewin estimates that as much as 50 percent of prescription drug expenditures would flow through mail-service pharmacies if they were utilized for all prescriptions used to treat chronic health conditions. If so, the cost-savings potential for consumers, Medicare, and private plans would nearly double over the next ten years to $167 billion.

“Mail-service pharmacies are an important tool providing consumers and payors with increased savings, convenience, and safety,” said PCMA President Mark Merritt. “If utilized to its full potential, the mail-service pharmacy option could save consumers, Medicare, and health plans as much as $167 billion in prescription drug costs by 2016. All consumers—particularly the chronically ill and seniors—should take advantage of this proven cost-saving tool and maximize their prescription drug benefits. Study after study shows high consumer satisfaction with the mail-service pharmacy option.”

The mail-service 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 hypertension, high cholesterol, or heart disease can be better served by the 90-day option offered by mail-service pharmacies. The 90-day mail-service pharmacy option offers increased savings and, since medications can be delivered as each fill ends, helps consumers better comply with their prescription regimen. The home-delivery feature of mail-service pharmacies is of particular importance to frail elderly and disabled individuals with limited mobility. Mail-order pharmacies have pharmacists available over the phone 24 hours a day to assure consumers the ability to ask and get the answers for any questions they may have about their medications.

Among the Lewin study’s key findings:

Prescriptions dispensed through mail-service pharmacies are estimated to cost approximately 10 percent less than equivalent retail pharmacy prescriptions.

At current trends, mail-service pharmacies are projected to save consumers, Medicare, and health insurance plans in the commercial marketplace $85 billion by 2016. These savings figures include $47.9 billion for Medicare and $37.5 billion for private health plans.

If used to their full potential, mail-service pharmacies could save as much as $167 billion for consumers, Medicare, and private health plans by 2016.

Policy proposals that would erode the mail-service pharmacy option will substantially increase costs. Taken together, three policy proposals â?? an “any willing mail-service pharmacy” mandate, uniform cost-sharing requirements, and a 90-day retail requirement â?? would increase costs to consumers, Medicare, and private health plans by 6.1 percent, or $47 billion over the next ten years.

For Medicare beneficiaries, the mail-service pharmacy option could be particularly helpful in lowering drug costs and expanding access. Fully 85 percent of seniors regularly take prescription drugs to treat an on-going health condition, with more than two-thirds of them taking three or more drugs on a daily basis. A PCMA analysis recently found that increased use of generic drugs and the mail-service pharmacy option can delay beneficiaries’ entry into the Medicare Part D “donut hole” coverage gap by an average of 74 days â?? or even help them avoid it altogether.

“Placing requirements or other limitations on drug benefit design limits the ability of plan sponsors to encourage consumers to utilize mail-service pharmacies to their full potential and will likely increase prescription drug costs,” said Dorothy Moller-Tiger, Vice President, the Lewin Group.

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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

Average Beneficiary Total Out-of-Pocket Savings of 38 Percent, or $1,200, Forecast for ‘06

PCMA Analysis Medicare Part D Coverage Gapa

(Washington, DC)—Increased use of generic drugs and mail-service pharmacies has the potential to delay â?? or avoid altogether â?? Medicare beneficiaries’ entry into the Medicare Part D “donut hole” coverage gap by an average of 74 days, according to a new analysis released today by the Pharmaceutical Care Management Association (PCMA).

PCMA is the national association representing America’s pharmacy benefit managers (PBMs). PBMs administer prescription drug benefits for more than 200 million Americans with health coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare Part D. PBMs typically save consumers and payors an average of 25 percent on prescription drug costs compared to unmanaged expenditures. PBMs employ a wide range of tools and techniques to drive down the cost of prescription drugs and expand access, including generic drugs and mail-service pharmacies.

“While most seniors this year will avoid the Medicare Part D coverage gap altogether, for those seniors at risk in ‘06 there are two proven tools ready-made within their Medicare drug plans to help them: generic drugs and mail-service pharmacies,” said PCMA President Mark Merritt. “Regrettably, too many beneficiaries are not taking full advantage of the cost-saving tools within their Medicare drug plans. All stakeholders need to work together to make beneficiaries better aware of how to maximize their Medicare prescription drug coverage, including increased use of generics and mail-service pharmacies.”

In 2006, most Medicare beneficiaries will avoid the Medicare Part D coverage gap altogether. According to an August 2006 report from the Centers for Medicare & Medicaid Services (CMS), 72 percent of Medicare beneficiaries with prescription drug coverage are enrolled in plans that do not have a Part D coverage gap. CMS estimates that 28 percent of individuals with Medicare drug coverage are in plans that do have a coverage gap, although not all of these beneficiaries will actually enter the coverage gap.

For those seniors at risk of entering the Medicare Part D coverage gap, PCMA examined the effect that increased use of generics and mail-service pharmacies would have on delaying entry into the coverage gap. Specifically, PCMA assembled five patient profiles comprised of both brand-name and generic drugs used to treat five primary conditions and assorted related conditions: high-blood pressure; diabetes; heart disease; chronic obstructive pulmonary disease; and Alzheimer’s disease. PCMA examined four national Medicare prescription drug plans providing coverage to more than 50 percent of all PDP beneficiaries. Among the key findings of PCMA’s analysis:

Beneficiaries can save a total of about 38 percent â?? or more than $1,200 in 2006 â?? in out-of-pocket costs through the increased use of generic drugs and mail-service pharmacies.

For patients with high-blood pressure and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 61 days of Part D drug coverage by delaying entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $1,226 or about 36 percent.

For patients with diabetes and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 157 days of Part D drug coverage by delaying entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $2,081 or about 57 percent.

For patients with heart disease and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 76 days of Part D drug coverage. For this profile, seniors would avoid entering the Medicare Part D coverage gap altogether. The total out-of-pocket savings would be $1,221 or about 57 percent.

For patients with chronic obstructive pulmonary disease and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 65 days of Part D drug coverage by delaying entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $1,504 or about 42 percent.

For patients with Alzheimer’s disease and other related conditions, increased use of generics and mail-service pharmacies can potentially provide an additional 13 days of Medicare Part D coverage and delay entry into the Medicare Part D coverage gap. The total out-of-pocket savings would be $38 or about 1 percent. The drugs contained within this profile contained very few generic alternatives.

In January 2006, researchers at the Centers for Medicare & Medicaid Services (CMS) announced that the rate of growth in prescription drug spending in 2004 fell to a ten-year historic low of 8.2 percent. As recently as 1999, the rate of growth had been more than twice that level. CMS researchers identified four key factors driving the rate of growth in drug spending down, including an increased use of 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

PCMA Generics Donut Hole Analysis

Lewin Group Study: Mail-Service Pharmacy Savings and the Cost of Proposed Limitations in Medicare and the Commercial Sector

PCMA Generics Donut Hole Analysis