The Independent Drugstore Lobby Agenda: Higher Drug Prices, Fewer Choices in Medicare

Tuesday, May 24, 2016 Drug News
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New National Campaign Highlights How PBMs Reduce Costs, Improve Pharmacy Benefits

WASHINGTON, May 24, 2016 /PRNewswire-USNewswire/ -- As the independent drugstore lobby descends on Capitol Hill this

week to push an agenda that would increase costs and reduce access for Medicare enrollees, the Pharmaceutical Care Management Association (PCMA) is promoting a national campaign, called That's What PBMs Do, to highlight how pharmacy benefit managers (PBMs) reduce prescription drug costs and improve benefits for consumers, employers, unions, and government programs.

"PBMs will save consumers, employers, unions, and government programs $654 billion over the next decade," said PCMA President and CEO Mark Merritt. "Unfortunately, the independent drugstore lobby agenda would raise costs for seniors, employers, and programs like Medicare Part D." 

PBMs reduce drug costs by:

  • Offering Amazon-style home delivery of medications;
  • Creating discount pharmacy networks;
  • Promoting generics and less expensive brand options; 
  • Negotiating discounts, rebates and other price concessions from drugmakers and drugstores; and
  • Managing high-cost specialty medications.

Click here to learn more about PCMA's That's What PBMs Do campaign.

The independent drugstore lobby wants Congress to pursue so-called "Any Willing Pharmacy" mandates (H.R. 793/S. 1190) that would eliminate the popular "preferred pharmacy" plans in Medicare. These mandates would increase spending by $21 billion over 10 years, according to research from The Moran Company examining the same legislation introduced previously.

Research and polling highlight the value of preferred pharmacies in Medicare, including:

  • A survey of seniors in preferred pharmacy plans shows that nine out of 10 seniors from urban, suburban, small town and rural areas have convenient access to these preferred pharmacies in Part D.
  • An analysis of CMS Part D 2016 enrollment data found that 75 percent of Medicare beneficiaries chose preferred pharmacy plans that offer convenient access and extra discounts at certain pharmacies.
  • The Federal Trade Commission (FTC) wrote a letter to Centers for Medicare and Medicaid Services on "Any Willing Pharmacy" provisions included in the agency's proposed Medicare Part D rule and warned that: "Requiring prescription drug plans to contract with any willing pharmacy would reduce the ability of plans to obtain price discounts based on the prospect of increased patient volume and thus impair the ability of prescription drug plans to negotiate the best prices with pharmacies."

Another drugstore lobby mandate (HR 244) would gut a key cost-control tool—the use of Maximum Allowable Cost (MAC) lists—which ensure payers aren't overpaying pharmacies for generic drugs. Forty-five state Medicaid programs now use MAC lists to reduce costs.

The Health and Human Services Office of Inspector General (OIG) touted "the significant value MAC programs have in containing Medicaid drug costs." The OIG also recommended that states strengthen MAC programs, not weaken them. Likewise, a white paper authored by David Hyman, a former Special Counsel at the FTC, notes that "legislative or regulatory measures that limit, restrict, or interfere with MACs are likely to have several unintended adverse consequences," including higher prices and tacit collusion among pharmacies.

The independent drugstore lobby also opposes patient safety legislation to curb prescription drug abuse in Medicare, known as "Safe Pharmacy" or "Lock-In." Creating this program in Part D for controlled substances would allow health plans to require at-risk beneficiaries to work with their plans to choose a single pharmacy to dispense controlled substances.

The independent drugstore lobby's argument for new mandates is undermined by their own research. According to a Drug Channels analysis of the 2015 National Community Pharmacists Association (NCPA) Digest, the number of independent pharmacies continues to hold steady and profit margins remain stable.

PCMA is the national association representing America's pharmacy benefit managers (PBMs).  PBMs administer prescription drug plans for more than 266 million Americans who have health insurance from a variety of sponsors including:  commercial health plans, self-insured employer plans, union plans, Medicare Part D plans, the Federal Employees Health Benefits Program (FEHBP), state government employee plans, managed Medicaid plans, and others.


To view the original version on PR Newswire, visit:

SOURCE Pharmaceutical Care Management Association

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