(Washington, DC)—The Pharmaceutical Care Management Association (PCMA) released the following statement. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which drive down the cost of prescription drugs for 200 million Americans with drug coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare:

“Since 2003, four separate, independent studies conducted by federal government agencies â?? the Federal Trade Commission, the Government Accountability Office, the Centers for Medicare & Medicaid Services, and the Congressional Budget Office â?? have concluded that PBM mail-service pharmacies provide deeper savings than retail pharmacies; broad access to generic drugs; and are helping to drive overall prescription drug expenditures lower for consumers and public and private payors. For those lobbying groups and others who may not be familiar with or choose to ignore these studies, PCMA is pleased to reiterate them yet again:

Ã?· The Federal Trade Commission (FTC) has found that mail-order pharmacies provide more savings than retail pharmacies and dispense lower-cost generic drugs at roughly the same rate as retail pharmacies. In a direct rebuttal to one of the drugstore lobby’s longstanding attacks on mail-order pharmacies, in August 2005, the FTC released a report finding that “prescription drug plan sponsors generally paid lower prices for drugs purchased through PBM-owned mail-order pharmacies than for drugs purchased through mail-order or retail pharmacies not owned by PBMs.” The FTC report flatly calls “without merit” the retail pharmacy industry’s charge that PBMs are engaging in “self-dealing” when they both administer the pharmacy benefits for a client as well as sell drugs to the client’s members via the PBM’s own mail-order pharmacy. [1]

Ã?· The Government Accountability Office (GAO) has found that mail-order pharmacies in the Federal Employees Health Benefits Program (FEHBP) offer substantial savings, especially when compared to retail pharmacies. According to January 2003 GAO report examining cost savings with mail-order pharmacies under FEHBP, the average mail-order pharmacy price for prescription drugs was 27 percent lower for brand name drugs and 53 percent lower for generic drugs than the price paid to retail pharmacies by cash-paying customers. According to GAO, “Enrollees in the plans reviewed had wide access to retail pharmacies, coverage of most drugs, and benefited from cost savings generated by the PBMs. Enrollees typically paid lower out-of-pocket costs for prescriptions filled through mail-order pharmacies and benefited from other savings that reduced plans’ costs and therefore helped to lessen rising premiums.”[2]

�· The Centers for Medicare & Medicaid Services (CMS) has found that expanded use of mail-order pharmacies and generic drugs has driven the rate of growth in prescription-drug spending to a ten-year historic low. In January 2006, CMS researchers released new data finding that the rate of growth in prescription drug spending in 2004 fell to a ten-year historic low of 8.2 percent and has been reduced by over 50 percent since 1999 alone. CMS researchers identified four key factors driving the rate of growth in drug spending down: 1) rapid growth in the use of lower-price generic drugs; 2) increased use of over-the-counter medications; 3) a shift toward greater mail-order dispensing; and 4) reduced consumption of certain drugs over safety concerns.[3]

Ã?· The Congressional Budget Office (CBO) estimates that the Department of Defense will save $1.5 billion from 2007-2016 by moving toward the mail-order pharmacy option. The Senate’s version of the National Defense Authorization Act contains a provision encouraging the expanded use of mail-service pharmacies. According to a June 9, 2006 analysis, “CBO estimates that the savings from transferring prescriptions from retail pharmacies to the TRICARE mail-order program (TMOP) would be about $54 million in 2007, $593 million over the 2007-2011 period, and $1.5 billion over the 2007-2016 period.”[4]

###

[1] US Federal Trade Commission, “Pharmacy Benefit Managers: Ownership of Mail-Order Pharmacies: A Federal Trade Commission Report,” August 2005. Available at http://www.ftc.gov/opa/2005/09/pharmbenefit.htm

[2] Government Accountability Office, “Federal Employee’s Health Benefits: Effects of Using Pharmacy Benefit Managers on Health Plans, Enrollees and Pharmacies,” GAO-03-196, January 2003, Available at http://www.gao.gov/new.items/d03196.pdf

[3] Smith, Cowan, Heffler, et al, National Health Accounts team, Centers for Medicare & Medicaid Services (CMS), “National Health Accounts in 2004: Recent Slowdown Led by Prescription Drug Spending,” Health Affairs, 25, no. 1, (2006: 186-196). Available at www.healthaffairs.org

[4] Congressional Budget Office Cost Estimate of S 2766, National Defense Authorization Act of FY 2007 as reported by the Senate Armed Services Committee on May 9, 2006, page 25, published June 9, 2006. Available at http://www.cbo.gov/ftpdocs/72xx/doc7281/s2766.pdf. CBO did acknowledge that transitioning maintenance prescriptions to mail-order pharmacies from military treatment facilities (MTFs) would result in higher costs of $1.3 billion over ten years. The cost of prescriptions available at MTFs are not subject to the Federal Supply Schedule (FSS) and are not reflective of market-based pricing.

###

PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for more than 200 million Americans with health coverage provided through small businesses, Fortune 500 employers, health insurers, labor unions, and Medicare Part D.

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