Separate Research Confirms Part D Seniors Also Enjoy Broad Choice of Prescription Drugs

(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) issued the following statement on new budget figures that report the cost of the Medicare drug benefit is lower over the next ten years than was estimated last summer:

“Part D plans are saving money without sacrificing beneficiaries’ choice of prescription drugs. New budget documents show that the overall projected cost of the drug benefit is $117 billion lower than earlier estimates, while a separate analysis released today from the Kaiser Family Foundation finds that overall formulary coverage has remained stable among Part D plans.

“Specifically, Kaiser found across all national Medicare prescription drug plans:

· An average of 98 percent of generic drugs analyzed are covered in 2008; and

· An average of 73 percent of brand name drugs analyzed are covered, with those still under patent more likely to be included on plan formularies.”

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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.

Contact Information:
Charles Coté 202-207-3605

New Congressional Task Force Focuses on E-Prescribing, Other Issues in 2008

(Washington, DC)— As policymakers continue to seek common ground promoting bipartisan health care issues that improve safety and save money, Representatives Allyson Schwartz, (D-Penn.), Lois Capps, (D-Calif.), and Jason Altmire, (D-Penn) today launched the New Democratic Health Care Task Force, which will focus on passing electronic prescribing (e-prescribing) legislation among other heath care initiatives.

“PCMA applauds the determination of Representatives Schwartz, Capps, and Altmire to pass e-prescribing legislation this year,” said PCMA President and CEO Mark Merritt. “2008 is a year in which ‘workable solutions’ like e-prescribing will drive the health care debate.”

The mission of New Democratic Health Care Task Force highlights the growing momentum to require that doctors use e-prescribing in Medicare. In December, the bipartisan “Medicare Electronic Medication and Safety Protection (E-MEDS) Act of 2007″ was introduced by Senate Finance Committee Members John Kerry, (D-Mass.) and John Ensign, (R-Nev.). Companion legislation was introduced in the House by Representatives Schwartz and Jon Porter, (R-Nev.) and is supported by a broad coalition of consumers, unions, businesses, purchaser groups, and other prescription drug stakeholders.

E-prescribing improves safety by alerting a doctor when a drug about to be prescribed could dangerously interact with other medications that a patient is already taking. E-prescribing also eliminates medication errors that result from sloppy handwritten prescriptions that are illegible at the pharmacy counter. In 2006, an Institute of Medicine (IOM) committee recommended that all physicians begin using e-prescribing by 2010 to help reduce the estimated 1.5 million preventable medication errors that occur in the United States annually. However, fewer than one-in-ten physicians currently use 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 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.

Contact Information:
Charles Coté 202-207-3605

(Washington, DC)— The Pharmaceutical Care Management Association (PCMA) issued the following statement in response to a new analysis released by the Congressional Budget Office (CBO) that estimates the costs associated with sweeping antitrust exemptions for independent pharmacies:

“The new CBO analysis confirms that sweeping antitrust exemptions for independent pharmacies would increase costs for Medicare Part D, Medicaid, the Federal Employees Health Benefits (FEHB) program, and as well as for employers and consumers. HR 971 would give independent pharmacies a ‘license to collude’ to raise prescription drug prices, without adding value for consumers or payors.

“CBO found that HR 971 would increase federal costs by $727 million over ten years and that increased drug costs to private health plans, employers, and consumers would result in ‘reductions in the scope or generosity of health insurance benefits, such as increased deductibles or higher copayments.’ CBO’s analysis also contends that cost increases resulting from the legislation would be passed along to workers, reducing ‘both their taxable compensation and other fringe benefits.’

“Two-thirds of independent pharmacies already hire groups called Pharmacy Service Administrative Organizations (PSAOs) to collectively bargain on their behalf for higher payments in Part D and other programs. A recent report from the Office of Inspector General (OIG) found that community pharmacies belonging to group purchasing organizations achieve higher Part D reimbursement rates—a fact that flies in the face of arguments favoring pharmacy antitrust exemptions.”

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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.

Contact Information:
Charles Coté 202-207-3605

OIG Report Undermines Case for Collective Bargaining, ‘Prompt Pay’ Legislation

(Washington, DC)— A new report released by the Office of Inspector General (OIG) on independent pharmacy payments in Medicare Part D will “raise eyebrows” on Capitol Hill and runs counter to claims from the independent drugstore lobby, the Pharmaceutical Care Management Association (PCMA) said today.

“This report will raise eyebrows among policymakers who have been led to believe that independent pharmacists were in dire straits because of the Medicare drug benefit,” said PCMA President and CEO Mark Merritt. “It runs counters to rhetoric from the independent drugstore lobby on the need for costly legislation granting pharmacies special antitrust exemptions and payment cycles that are twice as fast as those received by doctors and hospitals.”.

Among the key findings in the report:

Independent pharmacies are paid an average of 18 percent more by Part D plans than their acquisition costs for medicine.

On average, Part D payments to rural pharmacies exceed payments to urban pharmacies.

Two-thirds of community pharmacies belong to group purchasing organizations that allow them to collectively bargain—and achieve— higher Part D reimbursement rates.

According to a separate analysis by CRA International, pharmacy antitrust exemptions would increase prescription drug costs for Medicare and commercial payors by up to 11.8 percent or $29.6 billion over five years. Legislation that would make Medicare prescription drug plans pay drugstores twice as fast as Medicare pays other providers could cost the program and its beneficiaries at least $3.1 billion over the next decade, according to a recent study from PricewaterhouseCoopers (PwC).

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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.

Contact Information:
Charles Coté 202-207-3605

(Washington, DC)— The Pharmaceutical Care Management Association (PCMA) today released its 2008 policy agenda that promotes pharmacy benefit management (PBM) tools that provide affordability and choice on prescription drugs for consumers and payors.

“We believe that competition and 21st century innovation are the keys to generating savings and access for prescription drugs,” said PCMA President and CEO Mark Merritt. “Issues such as electronic prescribing and biogenerics will continue to gain bipartisan support. Meanwhile, issues which increase the cost of prescription drugs, such as collective bargaining and so-called ‘prompt pay’ bills, will be increasingly difficult for ‘budget hawks’ to support.”

PCMA’s 2008 Policy Agenda

Opposing Bills That Would Increase Prescription Drug Costs. In Medicare Part D, PCMA will continue to promote the utilization of proven PBM tools that have helped lower program costs 30 percent below initial government projections, generated more generic utilization than Medicaid, and provided greater choice of drugs and pharmacies than the Veterans’ Administration program. PCMA will also continue to aggressively oppose bills that would increase prescription drug costs for consumers and payors. Some of these proposals include:

• Mandating “Prompt Pay” of Medicare Claims. PCMA member companies currently pay claims within 30 days, a standard consistent with Medicare Parts A & B, the federal employees’ health plan, and the private sector. Legislation that would make Medicare prescription drug plans (PDPs) pay drugstores twice as fast as Medicare pays other providers could cost the program and its beneficiaries at least $3.1 billion over the next decade. The independent drugstore lobby’s own Medicare prescription drug plan paid in a 30-day cycle. Furthermore, many independent drugstores also hire Pharmacy Service Administrative Organizations (PSAOs), middlemen that serve as billing intermediaries between payors and themselves. Often independent drugstores require payors to send reimbursements to PSAOs—which in turn process and forward payments to pharmacies. This ‘middle step’ could be delaying payments.
• Sweeping Antitrust Exemptions for Independent Pharmacies. PCMA will also continue to combat legislation that would grant ind ependent pharmacies exemptions from antitrust laws, allowing them the right to collude and raise prescription drug prices. The pharmacy antitrust exemptions in HR 971 would increase prescription drug costs for Medicare and commercial payors by up to 11.8 percent or $29.6 billion over five years, according to an analysis from CRA International.
• Electronic Prescribing (E-Prescribing) in Medicare. In 2008, PCMA will continue its campaign to ensure full adoption of e-prescribing in Medicare. PCMA supports the bipartisan “Medicare Electronic Medication and Safety Protection (E-MEDS) Act of 2007″ introduced in December by Senate Finance Committee Members John Kerry (D-Mass.) and John Ensign (R-Nev.). Companion legislation was introduced in the House by Representatives Allyson Schwartz (D-Penn.) and Jon Porter (R-Nev.). This legislation would save lives and money and enjoys support from a broad coalition of consumers, unions, businesses, purchaser groups, and other prescription drug stakeholders.

Fighting for Generic Alternatives.

The Need for Biogeneric Competition. PCMA will once again drive the issue of creating of a clear regulatory pathway for biogenerics. With spending on biologics expected to double from $54 billion to $99 billion by 2010, PCMA strongly believes injecting competition in this space is necessary in order to drive down costs and increase access for consumers and employers.

Fighting Efforts that Prevent Generic Substitution. Generic substitution, as permitted by current state laws, is a well-established, clinically-sound practice. However, brand-name drug manufacturers continue their efforts to prevent generic substitution by adding unnecessary administrative requirements on pharmacists in states across the country. PCMA strongly opposes any unnecessary burdens that would inhibit access to prescription drugs that provide significant cost-savings to consumers, health plans, and e mployers.

Supporting Comparative Effectiveness. PCMA also believes that comparing the clinical effectiveness of competing drug therapies is an important tool to promote value-based purchasing. PCMA supports funding for the Agency for Healthcare Research and Quality (AHRQ) and believes that policy makers should explore collaborative opportunities in the public and private arenas where comparative effectiveness can successfully be implemented.

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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.

Contact Information:
Charles Coté 202-207-3605

Pharmacy Benefit Management Tools “Helped Restrain Drug Spending Growth in 2006″

(Washington, DC)—While expanded access and use of prescription drugs among Medicare seniors drove drug trend higher in 2006, greater use of generic medicines “helped restrain drug spending growth in 2006,” according a new report from researchers from the Centers for Medicare & Medicaid Services (CMS). CMS notes that during 2006, generic dispensing increased to 63 percent of prescriptions, up sharply from 56 percent of prescriptions in 2005 and that pharmacy benefit management (PBM) tools such as tiered copayment structures, copayment waivers, and step therapy were among the primary factors encouraging the use of generic drugs.

“Pharmacy benefit managers are helping to keep prescription drug prices stable, while also expanding access,” said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. “The report shows that proven pharmacy benefit management tools like tiered copayment structures, copayment waivers, and step therapy are major factors helping to hold down drug trend.”

The new prescription drug data are contained in a report, “National Health Spending in 2006: A Year of Change for Prescription Drugs” authored by researchers from CMS. Key findings include:

• Increased drug use and other “non price” factors were the primary drivers influencing the prescription drug expenditure trend. At 8.7 percent, prescription drug expenditure growth rate in 2006 was far below the 13.4 percent average growth rate experienced between 1994 and 2004.
• Increased drug use and other “non price” factors were the primary drivers influencing the prescription drug expenditure trend. At 8.7 percent, prescription drug expenditure growth rate in 2006 was far below the 13.4 percent average growth rate experienced between 1994 and 2004.

The generic dispensing rate in 2006 was 63 percent, up from 56 percent a year earlier. Researchers found that increased generic utilization was as a result of:

• Continued use of tiered copyament structures, waivers, and step therapy;
• More generics coming to market as a result of the loss of patent protection for a number of brand-name prescription drugs; and
• Lack of new blockbuster drugs.

Specifically, CMS researchers state in the report that, “This increased use of generic drugs, which on average have a much lower price than similar brand-name drugs, helped restrain drug spending growth in 2006.”

PBMs have been pioneers in the effort to increase the use of generics as a proven avenue to lowering costs and increasing access. These efforts have included advocating for a clear regulatory pathway for the creation of biogenerics and requiring that doctors in Medicare use electronic prescribing (e-prescribing). Both of these issues would save consumers and payors billions. E-prescribing alone reduces drug costs by an estimated 4 percent by encouraging the use of less costly generic and brand drug alternatives whenever clinically appropriate, according to the Gorman Health 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 210 million Americans with health coverage provided through Fortune 500 employers, health insurance plans, labor unions, and Medicare Part D.

Contact Information:
Charles Coté 202-207-3605

Washington, DC)—Prime Therapeutics, a leading pharmacy benefit manager (PBM) with a client base that includes Blue Cross and Blue Shield plans, employer and unions groups and third party administrators, is the newest member of the Pharmaceutical Care Management Association (PCMA).

“As a PBM that covers more than 14.6 million Americans in both the public and private sector, Prime Therapeutics will provide PCMA with insight into important industry innovations that are designed to increase access and lower prescription drug costs for consumers and payers,” said PCMA President and CEO Mark Merritt.

“We’re excited about the opportunity to join PCMA and work in conjunction with the association’s efforts to demonstrate to policymakers, the news media, and others the value proven PBM tools provide unions, consumers, employers, and the Medicare Part D program,” said Prime Therapeutics President and CEO Tim Dickman.

PCMA’s membership features stand-alone, retail, and health insurer-affiliated PBMs. The association’s membership includes: Aetna, CVS/Caremark, CIGNA, Express Scripts, MC-21 Corporation, Medco Health Solutions, Scriptrax, UnitedHealth Group, US Script, and WellPoint.

Prime Therapeutics LLC is a pharmacy benefit management company dedicated to providing innovative, clinically based, cost-effective pharmacy solutions for clients and members. Providing pharmacy benefit services nationwide to approximately 14.6 million covered lives, its client base includes Blue Cross and Blue Shield Plans, employer and union groups, and third-party administrators. Headquartered in St. Paul, Minnesota, Prime Therapeutics is collectively owned by 10 Blue Cross and Blue Shield Plans, subsidiaries or affiliates of those Plans. Learn more at www.primetherapeutics.com.

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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.

Contact Information:
Charles Coté 202-207-3605