DOJ Says Rx Discount Plan Was Crafted Legally
Responding to a suit filed by the National Association of Chain Drug Stores and the National Community Pharmacists Association asking to stop implementation of President Bush's Medicare drug discount plan, the Department of Justice said the proposal to create the plan was "crafted legally" and the groups' claims should be "denied," CongressDaily reports (Fulton, CongressDaily, 8/16). Under Bush's plan, the federal government would approve discount cards issued by pharmacy benefit managers, who would use the purchasing power of Medicare beneficiaries to negotiate with pharmacies and drug makers to reach discounts of between 15% to 25% off of drugs' retail prices. Participating PBMs would direct seniors to specific drugstores, create preferred drug lists, fill prescriptions by mail and operate telephone call centers to answer consumers' questions. To participate in the plan, seniors would pay a one-time enrollment fee not to exceed $25 (California Healthline, 7/13).
Shortly after Bush announced the plan, the industry groups filed suit in the U.S. District Court for the District of Columbia seeking a preliminary injunction to stop the program from taking effect (CongressDaily, 8/17). In their suit, the groups charged that the Bush administration lacked the authority to implement such a plan and that the administration violated federal rules by drafting the plan without open meetings or a public comment period (California Healthline, 7/18). But in a memorandum filed in federal district court late Tuesday, the Justice Department said those claims are "incorrect." The department added that the administration's meetings with PBM executives were "informal and did not rise to the level of meetings subject to the federal regulations" that the industry groups cited. According to the memorandum, "There were only two times that (Centers for Medicare and Medicaid Services Administrator Thomas) Scully or (CMS contractor Jon) Glaudemans even met with more than one PBM executive at a time." Further, the department said that CMS does not need congressional approval before it gives responsibility to private entities such as PBMs. The industry groups will file their response to the memorandum by Aug. 24, and the court is scheduled to hear oral arguments Sept. 6 (CongressDaily, 8/17).