Pharmacy groups oppose House drug benefit bill

Pharmacy benefit managers would control program

The U.S. House of Representatives has finally approved a Medicare prescription drug bill, but pharmacy organizations are not pleased.

"While our concerns may have been considered, they have certainly not been responded to in the House Republican bill," wrote the Pharmacy Benefits All Coalition, a pharmacy advocacy group that represents every aspect of pharmacy, in a recent press release. "We acknowledge that this legislation seeks to remedy significant concerns, but it does so at the expense of the millions of people who benefit from the care and counseling they receive in their neighborhood pharmacy."

The House approved the Medicare Modernization and Prescription Drug Act of 2002 (HR 4954) on June 28. The legislation passed largely along party lines.

The Pharmacy Benefits All Coalition says it opposes the bill for the following reasons:

  • The bill offers no coverage until after the 2004 elections.
  • It would place control of the Medicare-related prescription drug program in the hands of unlicensed and unregulated pharmacy benefit managers (PBMs).
  • It would encourage seniors to use mail order, where prescription costs are higher and generic use is lower.
  • It would restrict the beneficiary’s choice of pharmacy or require increased payment to use certain pharmacies.
  • It would seriously restrict the medications available to patients.
  • It provides no meaningful program for pharmacies to provide professional services to seniors at an adequate reimbursement rate.
  • It pre-empts many state consumer protection and pharmacy benefit laws that are designed to protect patients.
  • It includes legislative authority for the Centers for Medicare and Medicaid Services to establish a Medicare-endorsed prescription discount card. The discount card program would allow PBMs to force pharmacies to discount their prices to seniors without requiring any defined contribution from the drug manufacturer to actually lower the prescription price.

A study conducted by Kenneth E. Thorpe, PhD, chairman of Health Policy and Management in the Rollins School of Public Health at Emory University in Atlanta, found that even with the plan, Medicare beneficiaries would still have to pay 70% of the costs of their prescription drugs. Thorpe is a health policy analyst who served as deputy assistant secretary for health policy in the U.S. Department of Health and Human Services from 1993 to 1995. His study also found that 6.8 million of the Americans who receive Medicare benefits would have to pay the full catastrophic limit of $3,700 a year for prescription drugs.

Furthermore, 11.7 million Medicare recipients would have to pay an average of $2,200 per year under the House-approved plan, Thorpe says. He used Congressional Budget Office projections for the year 2005, when the plan would go into effect.

"Many Medicare beneficiaries who incur high drug expenses may expect that the House-passed bill will reduce substantially their out-of-pocket spending," he says. "Yet, as the analysis reveals, this is not likely to be the case."

The Pharmacy Benefits All Coalition now turns its attention to the Senate, which was expected to take up prescription drug legislation by mid-July. The bill that the Senate passes will have to be reconciled with the House version in conference committee.