Could Mean Higher Medicare Premiums for Seniors, Billions in Unnecessary Costs

Washington, DC; 11.17.04 — The Pharmaceutical Care Management Association (PCMA) today kicked off a new print advertising initiative to highlight for policymakers how the drug manufacturers’ agenda regarding the Medicare drug benefit could mean billions of dollars in unnecessary costs and higher Medicare premiums for seniors, the association said today. The ad highlights the drug industry’s strategy to circumvent PBMs’ cost-saving tools in the new drug benefit and asks “Guess Who’s Coming to Dinner” against the backdrop of a photo of a Sumo wrestler. The answer? “The big drug companies who are hungry for more profits.”

PCMA is the national association representing America’s pharmacy benefit managers (PBMs). In the private marketplace, PBMs work on behalf of employers, labor unions, health insurers, and government health programs to negotiate with the drug manufacturers and retail pharmacies for lower drug prices. According to a recent analysis by PricewaterhouseCoopers, PBMs drive down the cost of prescription drugs by an average of 25 percent and will save seniors in both Medicare and employer-sponsored retiree programs nearly $700 billion in prescription drug costs over the next decade. And, by the drug makers’ lobby’s own admission, PBM formularies already provide coverage for all of the top 50 drugs most commonly prescribed to seniors.

“The drug makers’ agenda is to force Medicare to effectively guarantee sales of their most lucrative drugs â?? and all without making them compete against one another to generate savings for the program. This could mean billions of dollars in unnecessary costs and higher premiums for seniors,” said PCMA President Mark Merritt. “This agenda would gut the competitive marketplace the drug makers claim to want and would lead to more expensive drugs for seniors.”

PCMA has launched the new advertising initiative to inform policymakers about the downsides of allowing the drug makers too much sway over the design of the Medicare prescription drug benefit. With the Administration and the US Pharmacopeia working over the next six weeks to finalize model Medicare formulary guidelines, critical decisions are pending that could have a significant impact on the program’s costs, beneficiary premiums and co-payments, and the effectiveness of PBM participation in the new benefit.

Seniors Wary of Pharma Lobby’s Agenda

Last week, PCMA released a new post-election survey of seniors finding they have serious concerns about the role of the drug companies in determining which drugs Medicare should and should not cover. Nearly 70 percent think involving the drug manufacturers in the design of the new drug benefit is a bad idea and only 15 percent think it is a good idea. Eighty-two percent of seniors think that “Medicare should make the drug manufacturers compete with one another to provide discounts on their drugs, which could produce lower Medicare premiums and co-pays,” while only 8 percent think “Medicare should accept the recommendations of the drug manufacturers to pay for as many of their drugs as possible, even though that could lead to higher Medicare premiums and co-pays.” No differences emerge on this question between Bush and Kerry voters. The post-election survey of 800 seniors was conducted by Ayres McHenry & Associates November 3-7, 2004.

A copy of the new PCMA advertisement is below.

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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