Higher Costs, Fewer Choices Likely Result of Medicare Direct Negotiation

PCMA Survey of 25 Drugs Most Often Prescribed to Seniors Finds PBMs Negotiating Discounts Of 31 Percent at Retail, 45 Percent through Mail-Service Pharmacies

(Washington, DC)—Charging that Families USA’s new report on Medicare drug prices “doesn’t add up,” the Pharmaceutical Care Management Association (PCMA) today issued a competing report finding that Families USA’s report fails to disclose that replicating a Veterans Administration-style approach to Medicare drug pricing would lead to higher costs for working families, unions, and small businesses in other parts of the system and limit seniors’ access to covered drugs and pharmacies. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for 200 million Americans.

In sharp contrast to the limited choices and higher costs associated with Families USA’s approach, PCMA’s own recent survey of the 25 drugs most commonly prescribed to seniors finds PBMs are negotiating deep discounts in Medicare part D. PDPs will save the Medicare program and its beneficiaries an average of 31 percent on medications purchased at retail pharmacies and 45 percent on medications purchased at mail-service pharmacies compared to the usual and customary prices that retail pharmacies charge to seniors with no drug coverage.

These findings are included in a new PCMA report, Higher Costs, Fewer Choices: What Families USA’s New Report on Medicare Drug Prices Isn’t Telling America’s Seniors & Disabled.

“Families USA’s report on Medicare drug prices doesn’t add up,” said PCMA President Mark Merritt. “Families USA is presenting a false choice. Medicare beneficiaries would never accept a drug benefit with sharply reduced drug choices and very limited access to pharmacies. Policymakers recognized this political reality and devised a program providing seniors with choice and competition. For these reasons, seniors enrolling in Medicare part D are finding a choice of plans providing meaningful discounts and wide access to the drugs they need.”

Four Reasons Why the Families USA Report Doesn’t Add Up:

PCMA believes the Families USA report fails the credibility test on a number of fronts:

The Families USA report endorses government-price controls over private-market competition as a means to lowering drug costs, but fails to reveal that GAO and others have cautioned this approach could actually lead to increased prescription drugs costs for hundreds of millions of Americans in Medicare and the commercial marketplace.

The Families USA report fails to mention that Medicare beneficiaries would see sharply reduced drug choices if Medicare replicated VA-style direct purchasing.

The Families USA report also omits limitations inherent in the VA system, such as limited access to retail pharmacies, that make replicating it in the Medicare program impossible.

Medicare part D plans are providing seniors with an average of 31 percent on medications purchased at retail pharmacies and 45 percent on medications purchased at mail-service pharmacies. PBMs Negotiate Significant Savings for Medicare Part D

###

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