(Washington, DC)—Two new research papers posted today on Health Affairs’ website underscore the potential that value-based purchasing and comparative effectiveness can play in promoting health care quality, improving outcomes, and providing cost savings, the Pharmaceutical Care Management Association (PCMA) said today.

PCMA today reiterated its call for a national discussion about how best to advance collaborative private-public partnerships that promote value-based purchasing and provide consumers, clinicians, and payors with data needed to make informed health care decisions.

“PBMs have been at the forefront of promoting value-based purchasing to ensure patients access to cost-effective, clinically proven prescription drugs that promote health and well-being, while reducing costs,” said PCMA President Mark Merritt. “PCMA believes it is critical that we continue building on this model and promote these principles throughout the entire health care delivery system. PCMA today reiterates its call for a broader national discussion in this area.”

PCMA believes strongly that a broad-based consensus is emerging among consumers, clinicians, policymakers, and private and public payors about the need to evaluate competing drug therapies and better utilize scarce resources. PBMs have led the way in these efforts, especially through pharmacy & therapeutics (P&T) committees and a wide range of pharmacy management tools, including multi-tier formularies, step therapy, and prior authorization. PCMA has been supportive of a wide-range of private and public efforts to improve the information available to consumers, clinicians, and payors, including those at the Agency for Healthcare Research and Quality (AHRQ), Consumers Union, and AARP.

The new Health Affairs reports can be found at www.healthaffairs.org.

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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

Medicare Part D: An Assessment of Plan Performance and Potential Savings

PCMA Outlines 2007 Four-Point Plan for Reform that Could Generate Additional Savings

Medicare Part D:An Assessment of Plan Performance and Potential Savings

(Washington, DC)—Medicare prescription drug plans (PDPs) achieved higher-than-expected savings of 29 percent during 2006 and are on track to save Medicare and its beneficiaries $469 billion over the 2006-2015 period if current performance is maintained, according to a new analysis from PricewaterhouseCoopers (PwC) released today by the Pharmaceutical Care Management Association (PCMA). To build on the success of Part D, PCMA also outlined a four-point plan for reforms that could generate additional savings for working families, seniors, and private and public programs.

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.

“We are proud of the significant savings we have achieved in only the first year of Part D and are excited to build on that record of success with projected savings of $469 billion over ten years,” said PCMA President Mark Merritt. “Moving forward, PCMA believes strongly that Congress should act on several common-sense reforms could generate additional savings for working families, seniors, and private and public programs.”

PCMA today outlined a four-point plan, which includes the following reforms:

Creation of a Legal Pathway for Biogenerics, or Follow-on Biologics. PCMA believes strongly that it is critical that Congress create a clear regulatory pathway for follow-on biologics. Expenditures on biologic products—today’s biotech “wonder drugs”—are growing rapidly. In Medicare Part B alone, the creation of a regulatory pathway could potentially save $14 billion dollars over the next ten years, with billions in additional potential savings available in the new Part D program and the commercial sector. In the 109th Congress, Congressman Henry Waxman (D-Calif.) introduced legislation that would enable FDA to approve biogenerics. PCMA strongly believes this approach is a common-sense solution and looks forward to working with policymakers from both sides of the aisle in the new Congress as they seek ways to reduce prescription drug costs for consumers and payors.

Adoption of a National, Uniform Electronic (e)-Prescribing Standard. PCMA believes strongly that e-prescribing has the potential to generate substantial savings and quality improvements by eliminating errors and empowering the doctor-patient relationship. E-prescribing puts real-time safety, cost, and coverage information at the doctor’s fingertips when they need it the most—during the patient office visit. E-prescribing encourages greater collaboration between doctors and patients on prescription options, including lower-cost alternatives like generic drugs and mail-service pharmacies. One key barrier to adoption of e-prescribing lies with 50 different state laws and a separate Medicare standard. PCMA strongly urges the new Congress to work on a bipartisan basis to establish a national, uniform e-prescribing standard.

Removing Barriers and Increasing Access to Generics. A key priority in the new Congress lies with eliminating barriers to market entry for conventional generics. In the last Congress, Senators Debbie Stabenow (D-Mich.) and Trent Lott (R-Miss.) introduced bipartisan legislation, “The Lower PRICED Drugs Act,” which aimed to close loopholes that prevent or delay generic drugs from coming to the market. This legislation enjoys support from a broad range of consumer groups, Fortune 500 employers, insurers, PBMs, and others. PCMA expects similar legislation to be introduced soon in the new Congress and to attract bipartisan support.

Ensuring Value-based Purchasing through Comparative Effectiveness. PCMA also believes that the clinical effectiveness of competing drug therapies is an important tool in promoting value-based purchasing. An increase in private-public partnerships would be an effective avenue to achieving this goal, but that goal will require additional resources. In that effort, PCMA believes The Agency for Healthcare Research and Quality (AHRQ) has been under-funded and that the time is now for a broader discussion about value-based purchasing in health care, including prescription drugs.
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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

Medicare Part D: An Assessment of Plan Performance and Potential Savings

(Washington, DC)— The Pharmaceutical Care Management Association (PCMA) issued the following statement in response to the US House of Representatives approving HR 4:

“In Medicare Part D, seniors want and deserve broad access to needed medicines, lower costs, and choices about their pharmacy options. Just one year into the new benefit, Part D is providing beneficiaries with deeper-than-expected discounts and low premiums. The program has come in 10 percent under budget because of the intense competition among Medicare drug plans. Seniors are increasingly satisfied with the program, with multiple surveys showing 80 percent-plus satisfaction.

“Regrettably, HR 4 would take the Medicare drug benefit in the wrong direction and potentially shift additional costs to private and public payors, including Medicaid and the Veterans Administration.

“As this debate moves to the US Senate, PCMA looks forward to working constructively with both sides of the aisle to increase awareness about what is working here and now in Part D. PCMA welcomes the opportunity to explore how best to assure seniors broad access to affordable prescriptions, including expanding access to generic drugs and the mail-service pharmacy option.”

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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

Prescription Drug Spending Growth Rate Down by 68 Percent Since 1999, Lowest Level in Over a Decade

Merritt: Data are ‘Proof Positive’ PBM Efforts Are Working

(Washington, DC)—Increased use of pharmacy benefit management (PBM) tools â?? including formularies, rebates, generic drugs, and mail-service pharmacy â?? in private and public health programs helped reduce the rate of growth in prescription drug spending in 2005 to the lowest level in over a decade to just 5.8 percent, according to new data released today from researchers at the Centers for Medicare and Medicaid Services (CMS).

“PBMs have a played a huge role in helping to drive prescription drug trend to an historic low,” said PCMA President Mark Merritt. “These data are the result of a sustained effort by PBMs to help consumers, clinicians, and payors change the way they think about prescription drugs, particularly with formularies and increased use of generic drugs and mail-service pharmacies. This approach is proof-positive that the prescription-drug cost challenge can be addressed without sacrificing access to needed drugs.”

The Pharmaceutical Care Management Association (PCMA) is the national association representing America’s pharmacy benefit managers (PBMs). PBMs help drive prescription drugs cost lower for more than 200 million Americans with health coverage provided through large and small businesses, health insurers, labor unions, and Medicare.

The new prescription drug data are contained in a report, “National Health Spending in 2005: the Slowdown Continues,” authored by researchers from the Centers for Medicare & Medicaid Services and published in the new edition of Health Affairs. Among the key findings:

Prescription drug-spending growth rate in 2005 slowed to its lowest growth rate in over a decade, rising just 5.8 percent. The 5.8 percent prescription-drug growth rate in 2005 represents a 33 percent reduction from the 2004 growth rate of 8.6 percent and a dramatic decline from 1999 when drug trend was running at 18.2 percent.

The authors cite numerous reasons for the historic slowdown in prescription drug spending:
· Tiered copayment benefit plans and formularies;
· Decreased number of new drug introductions;
· Reduced consumption associated with drug withdrawals;
· A continued shift to use of generic drugs; and
· Continued strong growth in mail-service pharmacy, which helped increase the use of generics.
· The rate of growth of drugs in private health insurance spending fell to 5.8 percent in 2005, much lower than the annual average rate of 16.7 percent rate seen from 1994-2004.

Spending on prescription drugs in Medicaid slowed dramatically in 2005 to just 2.8 percent. As the researchers note, this slowdown in Medicaid prescription drug spending was driven as “states continued to undertake aggressive cost control initiatives, successfully secured higher rebates resulting from increased use of multistate purchasing pools, and changed their formularies to shift beneficiaries to drugs that offered higher rebates.” All of these tools have been pioneered by PBMs in private health plans.

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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

Generic Alternatives Proven Avenue to Lowering Drug Costs
For Consumers & Private, Public Payors

(Washington, DC)—If Congress were to create a clear regulatory pathway for follow-on biologics, the Medicare Part B program could save, conservatively, an estimated $14 billion on prescription drug costs over the next ten years, according to an analysis conducted by Engel & Novitt and released today by the Pharmaceutical Care Management Association (PCMA). 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.

Life-saving and enhancing biologics can cost tens or even hundreds of thousands of dollars per patient per year so introducing as much competition as possible is vital to making these treatments more accessible to consumers. Unlike conventional drug products where generic competition is robust, the FDA lacks a clear regulatory pathway to approve follow-on biologics, or “biogenerics.”

“It is vitally important that the new Congress create a legal pathway for FDA to approve lower-cost follow-on biologic products,” said PCMA President Mark Merritt. “In Medicare Part B, the creation of a regulatory pathway would save $14 billion dollars, with billions in additional savings opportunities available in the new Part D program and the commercial sector. Everyday, millions of lives are positively impacted by revolutionary biologic drugs. The time to act is now for policymakers in creating a pathway for lower-cost alternatives to these drugs in order to increase options and competition for consumers and payors.”

Among the key findings:

Expenditures on biologics are substantial and increasing rapidly. In 2006, the Medicare Part B program spent more than $5 billion on biologics, one of the fastest growing segments of Medicare expenditures.

Medicare must continue to pay higher costs—even on older, off-patent biologics—because the FDA lacks a clear regulatory pathway for approving “biogenerics.” Medicare is a significant payer for biologics, but currently pays high costs even on older, off-patent biologics. The enactment of legislation introduced in the 109th Congress (H.R. 6257/S. 4016), would enable FDA to approve follow-on biologics.

Follow-on biologics would save Medicare billions of dollars. If follow-on biologics became available, the Medicare Part B program could save an estimated $14 billion over the next 10 years. Additional savings would also accrue to Medicare Part D and other government programs.

Follow-on biologics would substantially reduce costs for employers and consumers. The availability of follow-on biologics would allow PBMs to more effectively manage expenditures on high-cost biologics and thereby reduce health insurance costs for employers and out-of-pocket expenditures for consumers.

Study Summary

Engel & Novitt Follow-on Biologics Paper

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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

Engel & Novitt Follow-on Biologics Paper