Business Leaders Call on Policymakers not to Undermine Proven PBM Tools that Result in Significant Savings

(Washington, DC)— Pharmacy benefit managers (PBMs) are projected to save Texas consumers and businesses $72 billion on prescription drug costs over the course of the next ten years, according to a new analysis conducted by the Perryman Group and released today by the Pharmaceutical Care Management Association (PCMA). The state’s leading employer organization voiced strong concern that those savings could be at risk and called on policymakers to reject proposals that would undermine proven PBM tools.

“For both large and small business owners, maintaining an affordable drug benefit that provides their employees with access to needed medications is vitally important,” said Texas Association of Business (TAB) President and CEO Bill Hammond. “The proven tools utilized by PBMs increase access and reduce prescription drug costs. However, business leaders are concerned that legislative efforts to undermine these tools will jeopardize potential savings.”

In the public and private marketplace, proven PBM tools successfully balance affordability, choice, and access, while generating savings on average of 25 percent for consumers and payors. For example, these tools include: negotiated discounts; the mail-service pharmacy option; generic substitution; and formulary management.

In Texas, $9 billion of prescription drug expenditures are currently managed by PBMs. According to the Perryman Group, this results in tremendous savings for consumers and businesses, including:

In 2006, PBMs will save Texans an estimated $4.8 billion. Over the 2005-2014 period, PBMs will save Texans approximately $71.8 billion;

PBMs will also save the State of Texas an estimated $180.0 million per year on health benefit costs based on 2005 volumes and current contract provisions; and

By freeing up money for consumers and businesses to purchase goods and services other than prescription drugs, PBM savings generated $6.8 billion in economic activity in Texas in 2005.

“These data demonstrate the value of PBMs for consumers and businesses in the state of Texas,” said the study’s author, Dr. Ray Perryman. “Last year alone, the total annual positive effect of PBMs on the state of Texas, including direct savings on prescription costs, associated increases in economic activity, and associated positive fiscal effects associated was estimated at $502.5 million. Over the course of ten years, the savings generated by PBMs is estimated to be almost $72 billion.”

“As this study confirms, PBM tools help to lower the costs and increase access to prescription drugs for consumers and payors,” said PCMA President Mark Merritt. “Texas legislators should be careful that proposals intended to save money don’t inadvertently end up driving health care costs higher for consumers and payors.”

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PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which 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

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