Mail-Service Pharmacy Option Provides Cost-Effective Maintenance Medications to Individuals Managing Chronic Illnesses

TRICARE Could Save $1.5 Billion by Expanding Mail-Service Pharmacy Option

(Washington, DC)—The US Senate took an important step forward yesterday in helping more than 9 million TRICARE beneficiaries lower the cost of their maintenance prescription drugs and improving safety by expanding their access to the mail-service pharmacy option, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which work to lower the cost of prescription drugs for more than 200 million Americans with coverage provided through Fortune 500 employers, health insurers, labor unions, and Medicare Part D.

“Yesterday, the US Senate sent a clear message that 9 million TRICARE beneficiaries should have expanded access to the mail-service pharmacy option,” said PCMA President Mark Merritt. “Mail-service pharmacies provide deeper discounts than retail pharmacies on maintenance medications for the chronically ill, improve safety and compliance, and have the convenience of home delivery.”

Yesterday, the US Senate approved S. 2766, “the National Defense Authorization Act for FY 2007,” by a vote of 96-0. The $517.7 billion FY07 defense authorization bill includes a wide range of provisions related to national security and military readiness, including a provision expanding TRICARE beneficiaries’ access to the mail-service pharmacy option. TRICARE is the Department of Defense (DoD) agency that administers the health care plan for the 9.2 million eligible beneficiaries worldwide. These beneficiaries include members of the uniformed services, retirees and their families. The House-defense authorization bill also includes provisions expanding access to the mail-service pharmacy option. The two defense authorization measures will now have to be reconciled in conference committee.

The Congressional Budget Office estimates that the DoD will save $1.5 billion from 2007-2016 by moving toward the mail-order pharmacy option. 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.”

Other independent and government data also confirm the value of the mail-service pharmacy option. In January 2006, researchers at the Centers for Medicare & Medicaid Services (CMS) identified the mail-service pharmacy option as one of four key factors driving the rate of growth in prescription drug spending to a ten-year historic low and down more than 50 percent since 1999. For its part, the Lewin group has found that mail-order pharmacies could save the US health system as much as $177.9 billion from 2006-2015.

The mail-order pharmacy option is an important tool for individuals managing chronic conditions. While patients with short-term acute-care needs typically receive 30-day prescriptions in the retail pharmacy setting, patients with chronic conditions such as high-blood pressure and high cholesterol can be better served by the 90-day option offered by mail-order pharmacies. The 90-day mail-order pharmacy option offers increased savings and, since medications can be automatically delivered as each fill ends, helps consumers better comply with their prescription regimen. The home-delivery feature of mail-order pharmacies is of particular importance to frail elderly and disabled individuals with limited mobility. Mail-order pharmacies have pharmacists available over the phone 24/7 to assure consumers the ability to ask and get the answers for any questions they may have about their medications.

In recent years, a number of large, sophisticated purchasers in the commercial marketplace have embraced the mail-service pharmacy option as a pathway to maintaining a comprehensive, affordable drug benefit for their employees and dependents. A Fall 2004 survey of 11,697 consumers with drug benefits provided through 20 mail-service pharmacies administered by PBMs and retail pharmacies found high satisfaction in excess of 95 percent on a wide range of measures, including the condition of the drugs received; the correct drugs being delivered; and the ease of refilling prescriptions.

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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