Coalition pushes for limit on PBMs' role under Medicare

July 16, 2001

Pharmacy coalition would ban formularies manufacturer rebates to PBMs under Medicare

 

GOVERNMENT and LAW

Coalition pushes for limit on PBMs' role under Medicare

No formularies for Medicare" is pharmacy's new battle cry as the debate heats up over providing senior citizens with prescription drug coverage. Another could be: "Rebates for Medicare, not PBMs." The messages sum up model legislation that a band of pharmacy groups is drafting to counter the prominent roles proposed for pharmacy benefit managers under various pieces of Medicare legislation.

Earlier, in a rare show of unanimity, eight pharmacy-related associations agreed on a "unified agenda for American pharmacy'' for Congress and the Bush Administration to consider. Major points included the need for a pharmacy benefit—not a drug benefit—and appropriate payments for prescription drugs, professional services, and medication therapy management programs.

Calling themselves the Pharmacy Benefits All Coalition, they expressed "serious reservations" about tasks being assigned to PBMs under different Medicare bills. They said those proposed assignments included managing care, developing formularies, increasing generic drug use, negotiating discounts with drugmakers, and placing price controls on pharmacies—in short, the standard tools PBMs use in the private sector. The coalition asserted that PBMs should handle only administrative tasks and pharmacies would provide patient care and service.

Less than three weeks after signing on to the agenda, the Academy of Managed Care Pharmacy bailed out. "We are dismayed that the [coalition's draft] proposals impose strict prohibitions on the use of proven managed care pharmacy tools," said AMCP, which represents 4,800 R.Ph.s and others who work for PBMs and health insurers. "Such an approach is both unnecessary and counterproductive and will almost certainly undermine the financial viability of the program."

The other original coalition members are the American College of Clinical Pharmacy, American Pharmaceutical Association, American Society of Consultant Pharmacists, ASHP, National Association of Chain Drug Stores, National Community Pharmacists Association, and National Council of State Pharmacy Association Executives. The Food Marketing Institute is a recent addition.

Under the legislation the groups are attempting to forge, drug manufacturers would be required to negotiate rebate agreements with the Department of Health & Human Services if they wanted their products covered by Medicare. PBMs could not establish formularies, set reimbursement rates to pharmacies, or determine pharmacy eligibility, the coalition's wish list continues.

PBMs, however, see their roles in a much different light. "It is essential that the program not simply help pay for the cost of drugs but that it also includes pharmacy benefit management services to make certain that seniors obtain, and remain compliant with, clinically appropriate and cost-effective drug therapy," the Pharmaceutical Care Management Association said in a letter last month to Congressional health leaders. The letter went on to say the legislation should include "cost and clinical management tools common in the private sector ... including tiered copayments."

Later last month, a quite different message was being personally delivered to more than 100 lawmakers and their staffs by officials of 25 pharmacy chains under the auspices of NACDS. In a briefing for reporters in Washington, D.C., Craig Fuller, CEO of NACDS, said the officials were fanning out on Capitol Hill not to "slam" PBMs, but rather to convince Congress that some of the PBMs' cost-containment approaches are not "in the best interest of patients." PBMs, said Fuller, "never touch the product, never touch the patient."

Alan Levin, chairman of the NACDS board and CEO of Delaware-based Happy Harry's, nodded in agreement. "Everyone should play their proper roles," he said, and PBMs should be "administrators; that's all they should be."

In a full-page ad in the Capitol Hill newspaper Roll Call that coincided with the lobbying visits, NACDS said, "Allowing PBMs to come between patients, physicians, and pharmacists is no way to improve the quality of health care." Fuller suggested that RxHub, the $60 million electronic prescribing project AdvancePCS, Express Scripts, and Merck-Medco are forming, would do just that. He said NACDS' concern was about "placing a step between the patient/physician decision" and transmitting the prescription to the pharmacy. He also expressed some skepticism that the joint venture would work. "I'm not sure it's an entirely viable business concept," he said.

Michael F. Conlan

 



Mike Conlan. Coalition pushes for limit on PBMs' role under Medicare.

Drug Topics

2001;14:26.