Pharmacists, HHS continue standoff on drug card plan

October 7, 2002

HHS issues final rule on Medicare-endorsed drug card program

 

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Pharmacists, HHS continue standoff on drug card plan

Although the Department of Health & Human Services has issued a final rule stating that a Medicare-endorsed prescription discount card program is to take effect on Nov. 4, many questions must be worked out before it becomes a reality. Not the least of which is whether the feds have the statutory authority to go ahead with the plan, which the National Association of Chain Drug Stores and the National Community Pharmacists Association have been fighting in court.

Teresa DeCaro, a spokeswoman for HHS, told Drug Topics, "We believe we have the legal authority for this program. We spelled this out in great detail in the final rule. We hope the plaintiffs will examine the rule and find we've addressed their issues. We think this initiative is really important. If we do get stopped by the courts, we hope Congress will provide an explicit opportunity for us to go forward."

The decision by NACDS and NCPA to sue to stop the plan won't deter AdvancePCS from participating in the program. "We will proceed as if the program will be implemented unless the court rules otherwise," said a spokesman for the pharmacy benefit manager. AdvancePCS said it plans to submit two applications to offer seniors a choice of plans. But this is predicated on the request for proposal, which HHS has yet to release.

DeCaro said HHS plans to have a solicitation for applications ready this fall. Other steps still to be taken include reviewing the applications, organizing a consortium to administer the program, establishing a Web site for drug price comparisons, and putting in place marketing guidelines for card sponsors, she said.

Indeed, the 70-page final rule, published in the Federal Register on Sept. 4, delineates an intricate regulatory scheme for the plan. On the minus side for prospective card sponsors, such as PBMs, chains, and insurers, are the many criteria to be met before they achieve Medicare endorsement. On the plus side, HHS has made some concessions to the parties involved.

For instance, for community pharmacies, HHS took pains to make sure that card sponsors cannot bypass them and offer only mail order to patients. In fact, improved access to community pharmacies must be provided in both rural and urban areas. Also, discounts cannot be borne only by pharmacies. Manufacturers and pharmacies must share the burden .

For seniors, HHS stipulated that card sponsors must provide drug prices in dollars, not abstruse average wholesale price discounts, to encourage informed decision-making.

For card sponsors, HHS loosened the qualifying criteria, allowing more companies to participate. Each sponsor can also submit two applications, something certain PBMs had requested. Considering that HHS had received 28 applications when it first proposed the card program and each company can now apply for two cards, it's conceivable seniors could end up with 60 to choose from.

To help seniors select from this wide array, HHS plans to come out with a Gold Star designation policy. Card sponsors that can secure the greatest discounts or rebates and pass them along to beneficiaries would earn a Gold Star. Steve Schondelmeyer, director of the PRIME Institute at the University of Minnesota College of Pharmacy, has some concerns about this policy. He said the highest rebates are not the right criterion for awarding a gold star; lowest net price should be. The highest rebates are usually associated with the highest priced drugs. "If you want to single out good performance, let's use the appropriate criterion," he maintained.

Besides striving to derail the HHS final rule through the courts, the pharmacy community is watching for any discount card authorizing legislation that might be sneaked through this Congress. R.Ph.s are afraid legislation could be attached to a provider giveback bill, the odds of which have improved considerably now that passage of a Medicare drug benefit doesn't seem likely this year. For this reason, pharmacy groups have been rallying R.Ph.s to contact their Congressional representatives and register opposition to any such legislation.

Judy Chi

 

Judy Chi. Pharmacists, HHS continue standoff on drug card plan. Drug Topics 2002;19:22.