Business Leaders Call on Policymakers not to Undermine Proven PBM Tools that Result in Significant Savings
(Washington, DC)— Pharmacy benefit managers (PBMs) are projected to save Texas consumers and businesses $72 billion on prescription drug costs over the course of the next ten years, according to a new analysis conducted by the Perryman Group and released today by the Pharmaceutical Care Management Association (PCMA). The state’s leading employer organization voiced strong concern that those savings could be at risk and called on policymakers to reject proposals that would undermine proven PBM tools.
“For both large and small business owners, maintaining an affordable drug benefit that provides their employees with access to needed medications is vitally important,” said Texas Association of Business (TAB) President and CEO Bill Hammond. “The proven tools utilized by PBMs increase access and reduce prescription drug costs. However, business leaders are concerned that legislative efforts to undermine these tools will jeopardize potential savings.”
In the public and private marketplace, proven PBM tools successfully balance affordability, choice, and access, while generating savings on average of 25 percent for consumers and payors. For example, these tools include: negotiated discounts; the mail-service pharmacy option; generic substitution; and formulary management.
In Texas, $9 billion of prescription drug expenditures are currently managed by PBMs. According to the Perryman Group, this results in tremendous savings for consumers and businesses, including:
In 2006, PBMs will save Texans an estimated $4.8 billion. Over the 2005-2014 period, PBMs will save Texans approximately $71.8 billion;
PBMs will also save the State of Texas an estimated $180.0 million per year on health benefit costs based on 2005 volumes and current contract provisions; and
By freeing up money for consumers and businesses to purchase goods and services other than prescription drugs, PBM savings generated $6.8 billion in economic activity in Texas in 2005.
“These data demonstrate the value of PBMs for consumers and businesses in the state of Texas,” said the study’s author, Dr. Ray Perryman. “Last year alone, the total annual positive effect of PBMs on the state of Texas, including direct savings on prescription costs, associated increases in economic activity, and associated positive fiscal effects associated was estimated at $502.5 million. Over the course of ten years, the savings generated by PBMs is estimated to be almost $72 billion.”
“As this study confirms, PBM tools help to lower the costs and increase access to prescription drugs for consumers and payors,” said PCMA President Mark Merritt. “Texas legislators should be careful that proposals intended to save money don’t inadvertently end up driving health care costs higher for consumers and payors.”
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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
Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605
Widespread Adoption by Physicians is the Key to Saving Lives
and Reducing Costs for Consumers and Payors
(Washington, DC)—A new survey published today by Health Affairs finds that less than one in ten physicians utilize electronic (e)- prescribing as part of electronic health record (EHR) systems. This underscores the fact that more must be done to encourage the widespread adoption of e-prescribing by physicians. Congress should act quickly to create a national, uniform e-prescribing standard that will save lives and reduce costs for consumers and payors, the Pharmaceutical Care Management Association (PCMA) said today.
“Physicians aren’t using e-prescribing technology, in part because of the myriad of state laws and the new Medicare standard make it complicated to use. The fact that physicians have to conform to multiple e-prescribing standards is a hindrance to adoption,” said PCMA President Mark Merritt. “For example, a physician in Washington, DC would have to comply with DC, Virginia, Maryland, and Medicare standards to meet all their patients’ needs. These findings confirm that Congress must adopt a national e-prescribing standard that will encourage widespread adoption by physicians, resulting in greater quality, safety and reduced costs.”
The benefits of e-prescribing are well documented and include a reduction in medical errors that result in serious illness and hospitalizations. In addition, e-prescribing increases adherence to drug regimens, educates physicians and patients to lower-cost and effective alternative treatments, and drives generic utilization and the mail-service pharmacy option.
A national, uniform standard is supported by a wide-range of organizations representing more than 240 million Americans with prescription drug benefits provided through public and private payors, including the U.S. Chamber of Commerce, AARP, the AFL-CIO, and Consumers Union.
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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
Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605
(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) released the following statement in response to yet another attack from the drugstore lobby on affordable prescription drugs for seniors and the disabled:
“The tools and techniques pioneered by pharmacy benefit managers (PBMs) are projected to save consumers and private and public payors at least $1.3 trillion on drug spending by 2014. These savings mean that working families have more money to spend on groceries, rent, and other necessities. For employers, these savings help the US economy remain more competitive and allow them to create new jobs and continue to offer health benefits to their workers.
“For seniors and the disabled in Medicare Part D, PBM tools and techniques mean lower premiums and drug costs. Prior to Medicare Part D, seniors and the uninsured paid some of the highest drug prices of all at the retail pharmacy counter. With the advent of Medicare Part D, individual seniors now have the protection of drug plans negotiating on their behalf against the $174 billion drugstore industry. Seniors are seeing deep discounts averaging 27 percent, lower-than-expected premiums, and are increasingly satisfied with the new drug benefit.
“Since 2002, no less than 10 studies from independent researchers and government agencies â?? including the Government Accountability Office, Congressional Budget Office, Centers for Medicare & Medicaid Services, and the Federal Trade Commission â?? have documented the savings that PBMs provide to consumers, payors, and the system at large.
“These savings have come at a time when the $174 billion drugstore industry is thriving. In 2006, a new pharmacy is projected to open every 12 hours. Average pharmacist salaries are nearing $100,000 and closing in on the average lawyer’s pay. Independent pharmacies continue to grow and their owners rank among the nation’s top four-percent wage earners. A recent report from the US Department of Labor’s Bureau of Labor Statistics (BLS) found that pharmacy employment 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.”
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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
Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605
Largest PBM in Brazil Inaugurates International Membership Category
(Washington, DC)—Vidalink, the largest pharmacy benefit manager (PBM) in Brazil serving more than 3.5 million consumers, is the newest member company of the Pharmaceutical Care Management Association (PCMA), the association announced today. In doing so, Vidalink inaugurates a new International membership category for the association.
“PCMA is proud to have Vidalink as not only our association’s newest member, but also our first international member,” said PCMA President Mark Merritt. “As the largest PBM in Brazil providing more than three million Brazilian consumers with the most technically advanced services in the region, Vidalink’s membership grants PCMA a unique international perspective that further diversifies our advocacy efforts on behalf of the industry.”
“Vidalink is excited to join PCMA as its first international member,” said Luis GonzÃ?¡lez, Vidalink Co-Chief Executive Officer. “We look forward to providing our expertise to an association that serves as a strong advocate in public policy circles on the important, bedrock PBM principles: working to lower costs and increasing access to prescription drugs for consumers and payors.”
Vidalink, the largest PBM in Brazil and in Latin America, provides services to leading private-sector employers as well as health insurers, HMOs, medical cooperatives, and government agencies. Vidalink contracts with the leading pharmacy chains in the country and offers the most comprehensive formulary in Brazil, consisting of products from top multinational and national pharmaceutical manufacturers. The company’s founders identified Brazil as the largest potential PBM market outside of the United States based on the fact that the country has the second largest private healthcare market in the world. Vidalink was founded in January 2000 after extensive analysis of the U.S. PBM industry and adaptation of the business model to the needs of the Brazilian healthcare sector.
Vidalink received a minority investment from Caremark Rx, Inc. in September of 2005. In addition, the two companies entered into a strategic alliance agreement in which Caremark will assist Vidalink in developing additional PBM services and solutions for its clients in Brazil. Of the Fortune 500, 197 corporations have direct investments in Brazil, maintaining plants, offices and over 300,000 employees.
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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
Contact Information:
Phil Blando, 202-207-3614
Charles Coté 202-207-3605