PBMs’ Dispute With Pharmacies About Medicare Bill Escalates
A "war" between American pharmacies and the pharmacy benefit managers that would administer the drug benefit under the House and Senate Medicare bills (HR 1 and S 1) is "heating up," CongressDaily reports. A study released this week by the consulting firm LECG and funded by the Albertson's, Wal-Mart and Walgreens chains found that allowing PBMs to both administer a drug benefit under Medicare and use their own mail-order houses to supply prescription drugs to beneficiaries could result in a conflict of interest that could raise the cost of a Medicare drug benefit by as much as $29 billion over 10 years. Study author James Langenfeld, an economist and law professor, said the concern is that some large PBMs "have two sources of profits" -- administering drug plans and receiving rebates from drug makers -- "and that creates conflict of interest." The study also found that PBMs that own their own mail-order houses underutilize less expensive generic drugs and encourage customers to use more expensive brand-name drugs for which the PBM receives more money. However, Mark Merritt, president of the PBM trade group the Pharmaceutical Care Management Association, said the study was "laughable -- an 11th-hour rent-a-study that directly contradicts independent government data." Merritt noted that a Senate-passed amendment sponsored by Sen. Maria Cantwell (D-Wash.) that would have created "more equal footing" between pharmacies and PBMs would have raised the price of a final Medicare drug benefit by $40 billion over 10 years, according to Congressional Budget Office estimates. In addition, Merritt said PBMs that own mail-order houses do not have a conflict of interest. "PBMs do not create demand for prescriptions. Physicians -- not PBMs -- write prescriptions, thereby creating demand for products," Merritt said (Rovner, CongressDaily, 9/10).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.