(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) issued the following statement today regarding H.R. 1956, “The Patient Protection and Innovative Biologic Medicines Act.” PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D:

“Currently, life-savings biologics lack generic competition because there is no clear regulatory pathway for follow-on biologics, or biogenerics. Bipartisan legislation (H.R.1038/S.623) championed by House Government and Oversight Committee Chairman Henry Waxman (D-Calif.), Representatives Frank Pallone (D-NJ), Jo Ann Emerson (R-MO), and Zack Wamp (R-TN), and Senators Charles Schumer (D-NY), Hillary Clinton (D-NY), David Vitter (R-LA), Susan Collins (R-ME), and Norm Coleman R-MN) among others, seeks to remedy this situation.

“Last year the cost of biologics increased 17.5 percent compared with traditional drugs, which increased 10 percent. The large growth in drug trend in this area is why a diverse group of consumer and employer groups, including the AARP, Consumers Union, the AFL-CIO, Families USA, Caterpillar, Inc., Ford, General Motors and Daimler Chrysler, all support H.R.1038 and S.623.

“PCMA believes H.R. 1956 is flawed because it:

Prohibits FDA from designating any follow-on biologic as therapeutically equivalent to its innovator product;

Guarantees innovator biologic manufacturers up to 15 years exclusivity, as compared to only 5 years with chemical compounds under Hatch-Waxman. Even in the European Union, brand manufacturers are permitted only 10 years of exclusivity to recoup costs and make profits;

Requires FDA to issue guidance before a follow-on manufacturer can submit a biologic application. This was not a requirement of small molecule drugs under the original Hatch-Waxman Act; and

Requires clinical trials for all follow-on products, despite not requiring such for innovator biologics or small molecule drugs. The FDA has raised ethical concerns about mandating unnecessary duplicative human clinical trials for follow-on biologics.

“Instead of micromanaging this process, policymakers should work to ensure that FDA has the necessary resources to determine when a generic version can come to market and in turn when it may be exchanged for another biologic.”

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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

CRA Report Cost of Independent Pharmacy Antitrust Exemptions

Weiner-Moran Bill a Key Priority of the Independent Drugstore Lobby

(Washington, DC)—A key legislative priority championed by the independent drugstore lobby, HR 971, that would provide pharmacists with new, sweeping collective bargaining rights could increase prescription drug costs for Medicare and commercial payors by 11.8 percent, or $29.6 billion over five years, according to a new analysis from CRA International and released today by the Pharmaceutical Care Management Association (PCMA). PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.

“The independent drugstore lobby wants a license to collude so that it can demand higher prices from patients and payors and reap more profit for themselves,” said PCMA President Mark Merritt. “Independent pharmacists already have a number of legitimate avenues to negotiate with PBMs. This legislation would instead result in employers reducing health insurance coverage for their employees to compensate for increased prescription drug costs.”

Among the key findings from the CRA International analysis of HR 971, “the Community Pharmacy Fairness Act,” sponsored by Reps. Anthony Weiner (D-N.Y.) and Jerry Moran (R-Kan.):

Direct costs to payers, including commercial payors and Medicare could increase by $29.6 billion over five years, an increase of 11.8 percent of prescription costs at independent pharmacies;

Costs to the Medicare Part D program and its beneficiaries could increase by $6.4 billion over five years as a result of new pharmacy collective bargaining rights; and

Cost increases resulting from collective bargaining would likely be passed on to health insurers, employers, and consumers. As costs increase, employers would likely scale back, reduce, or even eliminate health care coverage for their employees.

Both Medicare and private insurers require pharmacy network access standards for their enrollees that already provide pharmacies—particularly rural pharmacies—extensive negotiating power with PBMs. In addition, most independent pharmacies already belong to large purchasing groups known as Pharmacy Service Administrative Organizations (PSAOs) that enhance their negotiating power.

“Calls for antitrust exemptions to allow independent pharmacies to negotiate collectively are unwarranted,” said Monica Noether of CRA International. “The Federal Trade Commission and Department of Justice monitor competition and provide means of redress for legitimate antitrust complaints. In providing a legislative circumvention of the FTC and DOJ, antitrust exemptions for independent pharmacies would place inflationary pressure on pharmaceutical reimbursements increasing costs for Medicare Part D alone by up to $6.4 billion over five years.”

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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

Urban, Suburban, and Rural Beneficiaries Have on Average Access to 21 Competing Pharmacies Near Independent Pharmacy

(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) issued the following statement today regarding the savings and broad access provided by Medicare prescription drug plans (PDPs) in Part D. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D:

“Proven PBM tools utilized in the Medicare drug benefit have provided millions of seniors with deeper-than-expected savings and increased access on their necessary prescription drugs. A recent study from PricewaterhouseCoopers (PwC) found Medicare 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.

“In addition to obtaining tremendous savings, beneficiaries in Part D also have the option of shopping for their prescription medicines at a number of different pharmacies in an increasingly competitive marketplace. Researchers from SK&A Information Services yesterday reported that consumers have broad access to pharmacy choices in urban, suburban, and rural areas, as an average of 21 pharmacies are located and compete near independent pharmacies throughout the United States. Consumers shopping at these various pharmacies also have the protection provided by a PBM in negotiating deep discounts since nearly all pharmacies are part of a PBM network.

“While PBMs are increasing savings and access for beneficiaries, the independent drugstore lobby continues to push an agenda that only increases costs for the program and seniors. The mandating of ‘prompt pay’ standards and other self-interested provisions would increase Medicare costs by tens of billions of dollars, while also increasing beneficiaries’ premiums, cost-sharing, and out-of-pocket costs.

“Policymakers should take note of the clear differences between the benefits provided by PBMs in the drug benefit and the very costly measures the independent drugstore lobby is seeking.”

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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

SK&A Research Consumer Access to Pharmacies

Average of 21 Pharmacies Compete with Each Independent Pharmacy

(Washington, DC)— Consumers have broad access to pharmacy choices in urban, suburban, and rural areas, as an average of 21 pharmacies are located and compete near independent pharmacies throughout the United States, according to an analysis conducted by SK&A Information Services and released today by the Pharmaceutical Care Management Association (PCMA).

“These data confirm that consumers have widespread access to a variety of pharmacy options in urban, suburban, and rural areas,” said PCMA President Mark Merritt. “On average, consumers have access to twenty-one competing pharmacies located near their current pharmacy. Since nearly all pharmacies are part of PBM networks, this competitive pharmacy marketplace provides consumers with a number of options when purchasing their prescription drugs.”

Key findings from SK&A include:

American consumers currently have access to nearly 59,000 retail pharmacies widely dispersed in urban, suburban, and rural areas throughout the country. Supermarket pharmacies: 797
About 38 percent of pharmacies nationwide are independently owned. More than 70 percent of independent pharmacies are located in urban areas.
On average, a consumer patronizing an independent pharmacy in the United States has access to 21 competing pharmacies located near their current pharmacy. These competitors include chain pharmacies, supermarket pharmacies, mass merchant pharmacies, and other independent pharmacies:
Ã?Ë? In urban areas—where most independent pharmacies are located—consumers patronizing independents have access to 30 competing pharmacies within two miles of their current pharmacy.

Ã?Ë? In suburban areas, independent pharmacy consumers have access to 7 competing pharmacies located within 5 miles of their current pharmacy.

Ã?Ë? Independent pharmacy consumers in rural areas typically have access to 14 competing pharmacies located with 15 miles of their current pharmacy.

SK&A used Medicare’s pharmacy access standards in Medicare Part D as a guide to calculate consumers’ access to pharmacies. The Medicare Part D/TRICARE pharmacy standards for urban, suburban, and rural areas are:

Urban Areas: At least 90 percent of beneficiaries in the plan’s service area, on average, live within 2 miles of a participating retail pharmacy. Urban areas include zip codes in which the population density is greater than 3,000 individuals per square mile.
Suburban Areas: At least 90 percent of beneficiaries in the plan’s service area, on average, live within 5 miles of a participating retail pharmacy. Suburban areas include zip codes in which the population density is between 1,000 and 3,000 individuals per square mile.
Rural Areas: At least 70 percent of beneficiaries in the plan’s service area, on average, live within 15 miles of a participating retail pharmacy. Rural areas include zip codes in which the population density is less than 1,000 individuals per square mile.
In addition to having a number of pharmacy options in Medicare Part D, beneficiaries are also seeing significant savings in the program. According to PricewaterhouseCoopers (PwC), 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.

About PCMA

PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.

About SK&A Information Services, Inc.

Celebrating its 25th anniversary, SK&A Information Services is a leading provider of healthcare information solutions. The firm researches and maintains contact and profiling information for over 2 million healthcare providers, including 617,000 practicing physicians and 223,000 pharmacy contacts. Their information supports client initiatives for: physician directories, continuing medical education, pharmaceuticals, managed healthcare, medical devices, publishing, research and more. SK&A is headquartered at 2601 Main Street, 6th Floor, Irvine, CA 92614. Visit www.skainfo.com or call 1-800-752-5478 for more information.

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