Stark Lends Support to Pharmacists’ Suit Against Rx Discount Suit
Rep. Pete Stark (D-Calif.), ranking member of the House Ways and Means Subcommittee on Health, announced yesterday that he will join pharmacy industry groups in their lawsuit against the Bush administration over the proposed prescription drug discount card plan for Medicare beneficiaries, CongressDaily reports (Fulton, CongressDaily, 7/19). Speaking at a Ways and Means health subcommittee hearing yesterday, Stark called the program "all hat and no cattle," adding that it raises "more questions than [it] answers" (Stark release, 7/19). Under the discount card plan, announced last week, the federal government would approve discount cards issued by pharmacy benefit managers, which 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. Seniors, who would pay no more than $25 to join the plan, could choose between various plans and switch their plans up to two times per year. Earlier this week, the National Association of Chain Drug Stores and the National Community Pharmacist Association filed suit in U.S. District Court in Washington, D.C., to block the plan's implementation, claiming that the administration lacks the "authority" to implement the plan without congressional approval (California Healthline, 7/18). The lawsuit also charges that the administration violated the Administrative Procedures Act by working with the PBMs before the plan's unveiling and by granting them "specific powers" without congressional input. The pharmacy groups say that only "large, well-established card providers" could adhere to the program's rules, which require PBMs to have five years of experience, cover two million people and make a $50 million donation to the consortium that will run the program. The groups claim that their profits "will be squeezed" because the plan does not require drug companies or the PBMs to provide the discounts (CongressDaily, 7/19). The PBMs Advance PCS, Express Scripts, Caremark Rx, Merck-Medco and WellPoint have agreed to participate in the program (California Healthline, 7/13).
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Stark said at the subcommittee hearing yesterday that the program was "created in secret" and is "illegal." HHS Secretary Tommy Thompson, who testified before the subcommittee, said he personally had not met with PBM officials before releasing information about the discount program. However, an HHS spokesperson said that several PBMs were consulted by Centers for Medicare and Medicaid Services (formerly HCFA) Administrator Thomas Scully and other officials. The PBMs were told only "broad outlines" in advance and were given specific details on the morning the program was announced, the spokesperson said (CongressDaily, 7/19).