The National Association of Chain Drug Stores commended Democratic and Republican lawmakers for sponsoring legislation examining practices of pharmacy benefit managers (PBMs).

National Association of Chain Drug Stores, PBM, pharmacy benefit managers, Mark Pryor, Cathy McMorris Rodgers, pharmacy, pharmacy patient care, Pharmacy Competition and Consumer Choice Act, PBM tactics, prescription drug, National Community Pharmacists Association, NCPA, Express Scripts, Medco, House of Representatives Ways and Means Subcommittee on Health, Health Care Industry Consolidation

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NACDS applauds legislation scrutinizing PBMs

September 14th, 2011

ALEXANDRIA, Va. – The National Association of Chain Drug Stores commended Democratic and Republican lawmakers for sponsoring legislation examining practices of pharmacy benefit managers (PBMs).

NACDS said Wednesday it has sent letters to Sen. Mark Pryor (D., Ark.) and Rep. Cathy McMorris Rodgers (R., Wash.) for introducing companion bills that the pharmacy group contends will "preserve pharmacy choice for patients and take additional steps to prevent threats to pharmacy patient care."

The Pharmacy Competition and Consumer Choice Act (H.R. 1971 and S. 1058) aims to address broad concerns about some PBM tactics and includes provisions related to transparency, the frequency of updating maximum allowable cost (MAC) pricing, networks, audits, use of data, and mandated mail-order pharmacy use, according to NACDS.

"This legislation will protect American consumers and the pharmacies that serve them from corporate middlemen known as PBMs. Despite their claims to the contrary, PBMs drive up prescription drug costs, restrict consumers' choice of pharmacy, use gimmicks to delay payments to pharmacies," NACDS stated in its letter.

"The PBMs' anticompetitive and abusive practices are key components of skyrocketing health care costs ... such as switching patients to more expensive drugs in order to reap huge 'rebates' from drug makers. PBMs favor brand-name drugs over generics for the same reason; in fact. PBM mail-order pharmacies dispense cost-saving generics much less often than neighborhood pharmacies," the letter explained.

On Friday, NACDS and the National Community Pharmacists Association raised questions about competitive leverage by PBMs when they provided comments to the House of Representatives Ways and Means Subcommittee on Health to underscore their opposition to the proposed merger of PBMs Express Scripts and Medco Health Solutions. Their statements were for a House panel hearing titled "Health Care Industry Consolidation."

In its comments, NACDS outlined its concerns about the merger deal should it go through, including reduced PBM competition, anticompetitive concentration in the PBM market and lack of choice for patients to obtain their prescription drugs and other pharmacy services. The letter also questioned claims that PBMs reduce costs in the health care system.

"This proposed merger, if allowed, would have grave consequences for consumers and the nation's community pharmacies that serve them, as well as for health plans and employers that utilize PBM services including Medicare Part D, specialty pharmacy services, and mail-order pharmacy services," NACDS stated in its comments. "In fact, just last week the FTC issued a 'second request' to Express Scripts and Medco to gather more data on the merger. Clearly, this proposed merger should be subject to a high level of scrutiny."

NCPA, in its comments to the subcommittee, noted that consolidation has pervaded the PBM market in recent years and has generally led to "higher drug costs, decreased patient access to pharmaceutical care and lower quality of care." The association also took aim at the Express Scripts-Medco merger.

"The resulting merger will harm patients by reducing choice, decreasing access to pharmacy services and ultimately leading to higher prescription drug costs paid by plan sponsors and consumers," NCPA stated. "As community pharmacists whose primary concern is patient-well-being, NCPA fervently opposes the proposed merger and asks Congress to do the same."