A group of congressmen have asked the Centers for Medicare & Medicaid Services (CMS) to take a closer look at the impact of "preferred pharmacy" drug benefit plans for Medicare Part D.

National Community Pharmacists Association, NCPA, preferred pharmacy, drug benefit plans, Medicare, Medicare Part D, B. Douglas Hoey, Centers for Medicare & Medicaid Services, CMS, independent pharmacies, H. Morgan Griffith, Peter Welch, Jerry Moran, lowest advertised co-pays, prescription drug plans, Marilyn Tavenner, Medicare's Plan Finder

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Congressmen question preferred pharmacy plans

March 22nd, 2013

ALEXANDRIA, Va. – A group of congressmen have asked the Centers for Medicare & Medicaid Services (CMS) to take a closer look at the impact of "preferred pharmacy" drug benefit plans for Medicare Part D.

The National Community Pharmacists Association said 31 members of the House of Representatives expressed concern in a letter to CMS that Part D plans with preferred pharmacies may limit access to pharmacy services for Medicare beneficiaries in some communities, especially rural areas.

An analysis by NCPA also indicated that preferred pharmacy plans may actually be more expensive for the Part D program and consumers.

"We have been hearing increasing concern from Medicare beneficiaries and small-business owners regarding Medicare Part D plans that feature preferred pharmacy networks," wrote Reps. H. Morgan Griffith (R., Va.), Peter Welch (D., Vt.) and 29 other representatives. "We fear these networks could lead to a decrease in access to quality care and threaten the survival of community pharmacies," they added.

Under preferred pharmacy drug benefit plans, most pharmacies can participate as network pharmacies to meet Medicare's geographic access requirements, yet only a limited number of pharmacies are designated as "preferred" pharmacies and are authorized to offer the plan's lowest advertised co-pays, according to NCPA. 

The association noted that most plans don't allow independent pharmacies to participate as a preferred pharmacy in their network, and the rising number of preferred pharmacy plans is especially challenging for seniors in rural areas, where independent or regional pharmacies are often the closest pharmacy and the nearest preferred pharmacy may be 20 miles or more away.

"We would also like to know if CMS plans to expand opportunities for independent pharmacies to join and compete with the Part D preferred networks on a level playing field," the letter from Morgan, Welch and the other representatives stated.

The lawmakers also questioned the usefulness of the Medicare Plan Finder website and the fact that some plans may require seniors to travel long distances to reach a preferred pharmacy. They asked Marilyn Tavenner, acting CMS administrator, to "outline a plan to mitigate any hardship" that the plans may cause beneficiaries and community pharmacists.

In addition, Sen. Jerry Moran (R., Kan.) has voiced concerns about preferred pharmacy plans in a letter to CMS. He cited the pharmacy access challenges of a rural state like Kansas, questioned if the preferred pharmacy plans are accurately marketed to beneficiaries, and asked about the degree of participation allowed to independent pharmacies.

"Some pharmacists in my state inform me that independent pharmacies that may wish to participate in the PNP [preferred network pharmacy] plans are not being given the opportunity to participate," Moran wrote in his letter. "Do independent pharmacies that are willing to accept the terms of the PNP plans have any opportunity to participate in such plans? Finally, I have heard concerns that not all preferred pharmacy prices are better than nonpreferred pharmacy prices. How does CMS respond to this concern?

"I believe that local pharmacists play a very important role in the delivery of health care across our country because in many rural communities they are often the most accessible provider," he added.

B. Douglas Hoey, chief executive officer of NCPA, applauded the lawmakers' efforts in raising concerns about preferred pharmacy plans.

"Independent community pharmacists and the patients they serve greatly appreciate the leadership of these officials in posing exactly the right questions to Medicare," Hoey said in a statement. "Some seniors are surprised to learn that they must travel great distances to obtain the lowest advertised co-pays. Medicare officials bought into these plans with the expectation that they would help to reduce costs. However, a comparison on Medicare Plan Finder's website suggests that the Plan Finder full cost may be the same or even higher at preferred pharmacies and mail order than they are at nonpreferred, network ones, such as locally owned pharmacies.

"In addition," Hoey explained, "community pharmacies are losing longtime patients to rival pharmacies without having any opportunity to participate as a preferred pharmacy. It is high time for Medicare to ensure seniors preserve their right to choose their pharmacy rather than being led into certain pharmacies."

In an analysis, NCPA staff looked at four common drugs — a generic version of Lipitor (atorvastatin calcium, 20-mg tablets, 90-day supply), a generic version of Plavi (clopidogrel, 75-mg tablets, 90-day supply), diovan (80-mg tablets, 90-day supply), and Nexium (40-mg caplets, 90-day supply) on Medicare's Plan Finder website. And in looking at two large preferred pharmacy plans (AARP MedicareRx Preferred and Humana Walmart Preferred Rx), the cost of the drugs was compared between preferred pharmacies, mail order pharmacies and nonpreferred pharmacies in eight cities (Helena, Mont.; Salt Lake City; Pierre, S.D.; Cheyenne, Wyo.; Boise, Idaho; Denver; Salem, Ore.; and Des Moines, Iowa).

Across those cities, the Plan Finder full cost of the preferred network pharmacy was more than the Plan Finder full cost of the nonpreferred network pharmacy 75% of the time, NCPA found. Also, the Plan Finder full cost when comparing a mail order pharmacy to a nonpreferred network pharmacy was higher 94% of the time.

NCPA added that in a report last month, CMS expressed concern about cost discrepancies for medications in prescription drug plans (PDPs) with preferred pharmacies.

"We have begun to scrutinize Part D drug costs in PDPs with preferred networks, and comparing these to costs in the nonpreferred networks, as well as to costs in PDPs without preferred networks," CMS stated. "We are concerned because our initial results suggest that aggregate unit costs weighted by utilization (for the top 25 brand and top 25 generic drugs) may be higher in preferred networks than in nonpreferred networks in some plans."

The Medicare Payment Advisory Commission (MedPAC), Congress' advisory board on Medicare issues, at its January meeting and in its most recent quarterly report to Congress, has raised questions as well about preferred pharmacy plans' impact on program costs, beneficiary costs and beneficiary access, according to NCPA.

"Community pharmacists have raised concerns about beneficiary access in preferred pharmacy plans since day one," Hoey stated. "Now those concerns have been heard by members of Congress and many others."

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