Puts Funding of Other Medicare Providers at Risk

(Washington, DC)— 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 $3.3 billion over the next decade according to a new study by PricewaterhouseCoopers (PwC) that was commissioned by the Pharmaceutical Care Management Association (PCMA).

“The increased cost of making Medicare PDPs pay retailers twice as fast as doctors and hospitals are paid will almost certainly be financed at the expense of Medicare providers and beneficiaries,” said PCMA President and CEO Mark Merritt. “In a pay-go world, this would essentially be a wealth transfer from rural providers, Medicare Advantage plans, Skilled Nursing Facilities, beneficiaries, and others to independent drugstores.”

Currently, Medicare PDPs pay pharmacy claims within 30 days, a standard consistent with Medicare Parts A & B, the federal employees’ health plan, and the private sector. The 30-day payment standard allows plans to batch claims for administrative efficiency and conduct audits to detect fraud and abuse.

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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

PwC: Impact of “Prompt Payment” Legislation on Medicare Costs

Why 30-Day Pharmacy Payment Cycles Lower Costs and Prevent Fraud

New Survey Shows Increasing Use of Tiered Copayments, Generics, And the Mail-Service Pharmacy Option to Control Costs

(Washington, DC)— A new survey of employers that finds the utilization of pharmacy benefit management tools has helped to slow the cost of prescription drug benefits highlights the value of proven pharmacy benefit manager (PBM) tools in increasing savings and access for payors and consumers, the Pharmaceutical Care Management Association (PCMA) said today.

The survey, from the consulting firm Mercer, LLC, finds that prescription drug costs increased an average of 9.3 percent in 2007, approximately half the annual rate of increase in prescription costs in 2000. According to Mercer, the rate of increase in prescription drug spending has slowed each year since 2000 “as employers and their pharmacy benefit managers have made changes to drug benefit design.”

“These latest data confirm what numerous other government and independent studies have also determined: utilization of proven PBM tools—tiered copayment structures, generics, and the mail-service pharmacy option—drive down prescription drug costs for payors,” said PCMA President & CEO Mark Merritt.

The survey also shows that PBMs increasingly offer the choice of “transparent” and “pass-through” models to their clients, although only one-in-five employers plan to choose these options. The survey found employers are increasingly focused on finding innovative ways to manage specialty and biotech spending. To this end, PCMA strongly supports the development a clear regulatory pathway for biogenerics to facilitate competition and therefore lower costs for employers and consumers.

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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 today regarding various comparative effectiveness proposals that are being debated in Congress:

“PCMA believes comparing the clinical effectiveness of competing drug therapies is an important tool in promoting value-based purchasing. Pharmacy benefit managers have led the way with Pharmacy & Therapeutics (P&T) committees and a wide range of proven utilization tools—including multi-tier formularies and step therapy—to ensure patients have access to cost-effective and clinically proven prescription drugs.

“PCMA urges policy makers to 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

PCMA: Competition Necessary to Drive Down Costs

(Washington, DC)— A new Medicare Payment Advisory Committee (MedPAC) report that says “having an abbreviated biogenerics approval process is urgently needed because many of the most innovative and costly products entering the market are biologics” signals the growing support for creating a clear regulatory pathway for biogenerics, the Pharmaceutical Care Management Association (PCMA) said today.

“Introducing much-needed competition into the biologics space in order to lower costs and increase access is now seen in Washington as a ‘common-sense’ health care solution,” said PCMA President and CEO Mark Merritt. “The latest MedPAC report reinforces the need for policymakers to develop a clear regulatory pathway for biogenerics.”

Unlike conventional drugs, there is no established regulatory process where biogenerics can be approved by the FDA. Last year, PCMA was joined by a number of influential consumer, employer, and insurer groups who endorsed the “Access to Life Saving Medicine Act of 2007,” bipartisan legislation that seeks to create a clear regulatory pathway for biogenerics.

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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