NCPA Supports H.R. 4577 to Benefit Seniors; Rejects Misleading PBM Attacks

ALEXANDRIA, Va. (July 22, 2014) — National Community Pharmacists Association (NCPA) CEO B. Douglas Hoey, RPh, MBA issued the following statement disputing a cost estimate released today by representatives of the pharmacy benefit manager (PBM) industry regarding H.R. 4577, The Ensuring Seniors Access to Local Pharmacies Act:

“This study reflects that PBMs are getting desperate to continue denying convenient access to medication and pharmacy choice for Medicare seniors in medically underserved areas.

“The Centers for Medicare and Medicaid Services (CMS) has heard all of the PBMs’ arguments previously yet continues to reject them and instead expresses continued, strong support for the kind of patient choice protections that are embodied in H.R. 4577. CMS has disputed PBM cost-saving claims of ‘preferred’ network plans as currently structured. CMS has testified to Congress that, ‘some plans with preferred pharmacy networks do not appear to result in savings—instead of passing along savings achieved through economies of scale, these Part D plans instead charge the Part D program higher prices, increasing taxpayer costs.’ In that same testimony, CMS added that ‘expanding access to lower priced drugs’ — as H.R. 4577 would do – ‘also has the potential to reduce government expenditures on Part D.’

“In the agency’s final regulation for the 2015 plan year, CMS stated: ‘We agree with many of the commenters who wrote that beneficiaries should be able to choose where they obtain their pharmacy services, and we are very concerned to hear that the current incentives (and potentially current marketing of pharmacies offering preferred cost sharing) lead many beneficiaries to believe that only those pharmacies offering preferred cost sharing can be used. We are also very concerned by the many comments reporting that beneficiaries are now driving 30 — 60 miles to the nearest pharmacy offering preferred cost sharing, or are feeling forced into using mail-order services, despite a preference to stay with a local pharmacy.’

“The new PBM-sponsored estimate follows a long track record of unreliable PBM-funded cost estimates.

“In addition, an earlier analysis by economist Dr. David Eisenstadt, veteran of the U.S. Department of Justice Antitrust Division and Principal at Microeconomic Consulting and Research Associates (MiCRA), concluded that there is ‘insufficient basis’ for opponents of any willing pharmacy to claim that Medicare drug prices will increase and the policy could even reduce the program’s cost under certain conditions.

“The PBMs’ real motive in opposing H.R. 4577 is to protect their profits by fighting anything that could undermine the market share of PBM-owned mail order pharmacies. Because of poor mail order service — documented by Medicare officials on their website — PBM-owned mail order pharmacies fail to win over many patients voluntarily. PBMs mandate or incentivize mail order by imposing artificial barriers to patient choice – such as telling seniors they must travel 20 miles or more to reach a ‘preferred’ pharmacy unless they opt for mail.

“We commend Reps. Morgan Griffith (R-Va.) and Peter Welch (D-Vt.) for introducing H.R. 4577 and thank the 46 cosponsors of this bipartisan bill. It also has the support of leading national health and consumer advocates including Consumers Union, HealthHIV, Medicare Rights Center, National Grange, National Senior Citizens Law Center and National Rural Health Association. “H.R. 4577 simply gives Medicare seniors in medically underserved areas more choice and access to prescription drugs without the interference of health insurance bureaucrats.”