US Deficit panel told: how to save $100B-plus on Rx drugs over 10 years

Pharmacy benefit managers (PBMs) have told the US Joint Select Committee on Deficit Reduction how the nation can save more than $100 billion in prescription drug costs over the next 10 years.

As the 12-member bipartisan Congressional panel - widely known as the Supercommittee - examines options to reduce the US deficit by $1.5 billion over a ten-year period, the Pharmaceutical Care Management Association (PCMA), which represents PBMs, has written to the members with proposals which, it says, would not only save more than $100 billion over the period but also improve and increase access to prescription drug benefits.

The first option put forward by the PCMA is to modernise pharmacy benefits provided by Medicaid - the state/federal health programme for people on low incomes. Currently, Medicaid uses fewer generic drugs and pays drugstores more than double the dispensing fees paid by private insurers or Medicare - the federal health insurance programme for seniors and some disabled people. However, the PCMA says that by modernising Medicaid pharmacy, the federal government could save $21 billion over the next decade without cutting benefits or payments to doctors and hospitals. 

The Association also calls for generic and therapeutic substitution in Medicare's prescription drug benefit (known as Part D) to be maximised, to shift spending "from the most expensive single-source drugs to equally-effective lower-cost options."

The PCMA calls for plans offering Medicare Part D cover to be allowed to negotiate greater discounts on all drugs. Removing the existing mandate that "all, or substantially all" drugs in six protected classes must be covered would increase price competition among brand-name drugmakers, as those currently with a guarantee that their drug is covered have no incentive to offer a discount to Part D plans or beneficiaries, it says.

The Association also recommends to the Joint Select Committee that: 

- the approval of biogenerics should be expedited. Reducing the number of years during which a drugmaker has monopoly pricing power (exclusivity) for biologic drugs will increase competition and, as the number and costs of biologics drastically increases, so does the urgency to begin the approval pathway for biogenerics as quickly as possible, it says; 

- the tax deduction for direct-to-consumer (DTC) drug advertising should be banned. "While the First Amendment allows for such advertising, it does not require taxpayers to subsidise promoting the most expensive treatments," the PCMA tells the legislators;

- pay-for-delay drug settlements should also be outlawed, thus facilitating faster access to lower-cost generics; and

- chronic care pharmacy and home delivery should be encouraged. While home delivery is popular with patients on grounds of cost and convenience, current restrictions in Medicare Part D mean that beneficiaries in private-sector retiree plans use home delivery four times more often than those in Part D plans. Removing Medicare's restrictions and encouraging beneficiaries to obtain their maintenance medications by mail could improve drug adherence and save Medicare hospital and physician costs, the Association tells the Supercommittee.