Federal Injunction against Maine PBM Fiduciary Law Remains Fully Intact

If Allowed to Take Effect, Law would Increase Mainers’ Drug Costs by 10 Percent

Washington, DC; 02.03.05 — A federal injunction blocking Maine’s PBM fiduciary-disclosure law remains fully intact and the Pharmaceutical Care Management Association (PCMA) will seek a complete review by the Judge of the federal US District Court of Maine regarding yesterday’s non-binding recommended decision by a Magistrate that the law be enforced, the association said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“Yesterday’s recommended decision conflicts with two prior federal court decisions preliminarily blocking state PBM fiduciary and disclosure laws from taking effect,” said PCMA Counsel John Aromando. “PCMA intends to seek a complete review of this non-binding recommendation by a federal district court judge in Maine.”

Two jurisdictions â?? Maine and the District of Columbia â?? have approved PBM fiduciary-disclosure laws. Federal court decisions in Maine and the District of Columbia have preliminarily blocked these laws from taking effect on the grounds that they violate federal ERISA law and/or represent an illegal takings of proprietary trade secret information. In 2004, ten states rejected similar legislation, including California, New York, Florida, Washington State, Maryland, Minnesota, Mississippi, Kansas, Iowa, and Vermont. In addition, South Dakota approved a disclosure law that does not designate PBMs as fiduciaries.

Numerous data have indicated that PBM disclosure-fiduciary proposals would increase prescription drug costs for consumers, employers, and government. According to PricewaterhouseCoopers, Maine’s fiduciary-disclosure law would increase prescription drug costs for Maine consumers and employers by 10.2 percent over the next ten years â?? or $1.7 billion dollars. Similarly, in 2003, during the Medicare prescription drug debate, Congress rejected a disclosure proposal after the Congressional Budget Office estimated it would increase the cost of the Medicare drug benefit by $40 billion dollars over ten years and increase seniors Medicare part D premiums by more than five percent in 2006 alone.

PBMs administer prescription drug plans for more than 200 million Americans with prescription drug coverage provided through the nation’s small and large employers, Taft-Hartley union plans, health insurers, state and federal-employee benefit plans, and Medicare Advantage health plans. PBMs help drive down the cost of prescription drugs for consumers and plan sponsors â?? on average by 25 percent â?? by negotiating discounts with drug manufacturers and retail pharmacies. These savings are, in turn, passed on to consumers. PBMs also provide consumers with important quality protections, such as disease management and physician and patient education. PricewaterhouseCoopers estimates that PBMs will save consumers and employers $1.3 trillion dollars on prescription drug costs over the next decade.

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.

Contact Information:
Phil Blando
202-207-3614