Implications Foreseen for Medicare Model Formulary Guidelines

Washington, DC; 11.10.04 — Seniors voting in last Tuesday’s presidential election favor a Medicare prescription drug benefit that promotes a choice of plans and drives down prices through competition, but also have serious concerns about the drug manufacturers’ role in influencing the design of that new benefit, according to new post-election polling data released today by the Pharmaceutical Care Management Association (PCMA). PCMA is the national association representing America’s pharmacy benefit managers (PBMs).

“Seniors voting in last week’s election clearly want a Medicare drug benefit that promotes a choice of drug plans and lowers costs through competition. This approach is the essence of the PBM model that has worked to drive down costs by an average of 25 percent and expand access in other parts of the system,” said PCMA President Mark Merritt. “For policymakers, seniors are raising a red flag about drug manufacturers’ role in designing the drug benefit. Seniors don’t want drug manufacturers determining what drugs Medicare should pay for, especially if it means higher premiums and co-payments. These data show that approach is a political loser.”

Among the key findings:

More than eight out of ten seniors think Medicare should make drug manufacturers compete with one another to provide discounts on their drugs, rather than accept the recommendations of the drug manufacturers about which drugs should be covered. 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.
Seven out of ten seniors think it is a bad idea to have drug manufacturers helping to determine which of their drugs Medicare should and should not cover. Sixty-nine percent think involving the drug manufacturers in the coverage decision is a bad idea, and only 15 percent think it is a good idea. Sixty-four percent of Bush voters think it is a bad idea, as do 75 percent of Kerry voters.
Seniors think the drug companies are motivated more by increasing their profits than by providing seniors more choices when they work to have Medicare cover as many of their own drugs as possible under the prescription drug benefit. Fifty-four percent think the drug companies are motivated by profits, and 25 percent think they are motivated by providing seniors choices. Bush voters attribute drug company behavior to profits by a margin of 43 to 33 percent, and Kerry voters agree by a margin of 66 to 16 percent.
More than seven out of ten seniors prefer a drug plan like that enjoyed by members of Congress, rather than a plan similar to one used by the Veterans Administration. Seventy-two percent of seniors say “Medicare should offer seniors a drug plan like members of Congress have, which offers a choice of drug plans with at least 120 categories of drugs,” while 11 percent say “Medicare should offer seniors a drug plan like the one used by the Veterans Administration, which offers one national preferred drug list with 34 categories of drugs.”
The 120 categories is 26 fewer than is currently recommended by U.S. Pharmacopeia in its draft guidelines. PCMA has long advocated that USP should build on proven formularies from the commercial marketplace, which typically rely upon 50 to 100 categories of drugs.

These new data regarding senior voters’ views about the structure of the new Medicare drug benefit have important implications as the Administration and the US Pharmacopeia work over the next six weeks to finalize model Medicare formulary guidelines.

“We are a crossroads,” added Mr. Merritt. “With critical decisions pending about the structure of Medicare model formulary guidelines, seniors have sent a clear signal that they don’t want the drug manufacturers involved in determining which drugs Medicare will pay for â?? especially if it means higher premiums and copayments. These data suggest that approach may well engender a senior backlash.”

The post-election survey of 800 voters 60 years of age and older was conducted by Ayres, McHenry & Associates November 3-7, 2004 and has a margin of error of plus or minus 5.24 percent.

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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