Proposed US state legislation which would allow patients to choose where to buy their prescription drugs would in fact reduce competition, leading to higher costs and, potentially, reduced consumer access to medicines, says the Federal Trade Commission (FTC).
The FTC’s warnings are made in an opinion issued, at the request of New York State Senator James Seward, on New York’s Assembly Bill 5502-B – the Anti-Mandatory Mail Order Pharmacy Bill. This bipartisan legislation seeks to limit a health plan’s ability to “require or encourage” the use of a lower-cost mail-order pharmacy by placing restrictions on all health policies and insurers that provide prescription drug coverage.
In particular, Bill 5502-B would not allow policies to require patients to fill long-term maintenance prescriptions at mail-order pharmacies, nor could they offer patients incentives such as lower co-payments or deductibles for using a mail-order pharmacy.
Bill 5502-B has already passed unanimously in the New York State Assembly and, in a 60-2 vote, in the state Senate, and the National Community Pharmacists Association (NCPA) is urging State Governor Andrew Cuomo to sign it into law.
New York’s 2,200 independent community pharmacies provide patients with personalised care that helps improve health outcomes and reduce costs, says NCPA chief executive B Douglas Hoey, but allowing health plans to restrict patients’ choice of pharmacy “undercuts effective medication adherence based on face-to-face interaction, sends tax dollars out of state in a struggling economy and threatens local pharmacy jobs.”
The requirement to use mail-order pharmacies has already resulted in over $5 billion worth of pharmacy business leaving New York State every year, he adds.
However, the FTC opinion warns that Bill 5502-B’s enactment “would have the unintended consequence of harming consumers.”
By undercutting mail-order pharmacies’ incentives to bid aggressively for a share of a health plan’s business, “this legislation likely will raise prices for, and reduce access to, prescription drugs, which are an increasingly important component of medical care,” says the Commission. “Some cost increases could result in higher out-of-pocket prices for beneficiaries and, in some cases, plans might reduce the scope of, or eliminate, prescription drug coverage,” it suggests.
Although the Bill “may seek to enhance consumers’ ability to fill prescriptions at pharmacies of their choice, it would impede a fundamental element of consumer choice: healthy competition between retail and mail-order pharmacies, which constrains costs and maximises access to prescription drugs,” the FTC tells Sen Seward, adding: “for these reasons, we urge the Legislature and the Governor to seek alternative means to preserve consumer choice in the purchase of prescription drugs.”
The FTC’s opinion has been welcomed by the Pharmaceutical Care Management Association (PCMA), which represents pharmacy benefit managers (PBMs). “Gov Cuomo should veto this prescription drug tax on small business. It pads drugstore profits and sticks employers with the tab,” says PMCA chief executive Mark Merritt.
“Home delivery is popular with patients because it offers lower-cost 90-day prescriptions for long-term, chronic conditions and is more convenient than driving to the drugstore every 30 days. With mail-service pharmacies, patients can get private counselling over the phone from trained pharmacists seven days a week, 24 hours a day,” says Mr Merritt.
“Numerous government and peer-reviewed studies have confirmed the increased savings, safety and adherence provided by mail-service pharmacies,” he adds.
