Initiative Builds Upon Proven Strategies Pioneered by PBMs for 200 Million Americans

Washington, DC; 12.09.04 — Building upon strategies pioneered by pharmacy benefit managers for 200 million Americans, a new educational initiative unveiled today by Consumer Reports to compare the clinical and cost-effectiveness of brand-name and generic drugs for a variety of conditions is an important step forward in the ongoing broader effort to provide consumers and their physicians with information they value and in stretching scarce health care dollars, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“Today’s initiative builds on the strategies pioneered by PBMs that have worked to provide 200 million Americans an average savings of 25 percent on prescription drug costs,” said PCMA President Mark Merritt. “PCMA applauds Consumer Reports for shining a spotlight on an issue of critical importance to consumers, physicians, employers, government purchasers, PBMs, and others. PBMs have been at the forefront of efforts to help expand consumers’ access to clinically proven and cost-effective prescription drug options, including generics and mail-service pharmacies.”

PBMs administer prescription drug plans for 200 million Americans with drug coverage provided through labor unions, employers, health insurers, federal and state employee benefit plans, Medicare Advantage plans, and state Medicaid programs. By requiring drug manufacturers and retail pharmacies to compete based cost and quality, PBMs are able to drive down the cost of prescription drugs by an average of 25 percent. According to an analysis by PricewaterhouseCoopers, PBMs will save consumers and employers $1.3 trillion dollars on prescription drug costs over the next decade.

While the Consumer Union analysis compares prices paid by cash-paying consumers for prescriptions dispensed through retail pharmacies, it is important to note that consumers with PBM coverage typically pay far less — in some cases more than 50 percent less â?? than the price charged to the uninsured or cash-paying consumer at a retail pharmacy counter. Numerous data, including those from the Government Accountability Office and the Congressional Budget Office, have found that PBMs offer substantial discounts to consumers on both brand-name and generic drugs compared to cash-paying customers at retail pharmacy counters.

These issues also hold important implications for the Medicare and Medicaid programs. In the Medicare program, policymakers have sought to build on proven PBM strategies â?? including multi-tier formularies, mail-service pharmacies, and generic alternatives â?? in providing seniors and the disabled with an affordable, high-quality prescription drug benefit. Recently, Congress appropriated $15 million to the Agency for Healthcare Research and Quality to examine clinical effectiveness of prescription drugs and other medical services. In the Medicaid program, at a time of increased costs, states have barely begun to scratch the surface in leveraging PBMs tools â?? including examining the comparative cost and efficacy of prescription drugs â?? in helping to hold the line on prescription drug spending.

“As policymakers confront the challenge of delivering prescription drug benefits to Medicare and Medicaid beneficiaries, it is critical that they rely upon scientific evidence and cost-effective options,” Mr. Merritt added. “Without effective PBM participation, prescription drug costs will soar with no corresponding benefit to beneficiaries.”

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The Pharmaceutical Care Management Association (PCMA) is the national trade association representing America’s pharmaceutical benefit managers (PBMs). PCMA member companies provide pharmaceutical care management services to more than 200 million Americans.

Contact Information:
Phil Blando
202-207-3614