PCMA: Drug Company Price Hikes Highlight Need for More Competition in Medicare Part D

Time to End Longstanding Regulations That Increase Pricing Power for Drug Manufacturers, Independent Drugstores

WASHINGTON--(BUSINESS WIRE)-- The Pharmaceutical Care Management Association (PCMA) released the following statement on a new report from AARP that found that the price of brand name prescriptions most widely used by Medicare beneficiaries increased by 9.7 percent in the 12 months ending with March 2010 and was much higher than the rate of increase observed during any of the prior eight years:

“This is a teachable moment and America’s seniors are counting on drug manufacturers to do the right thing in Part D. Reform shouldn’t be undermined by skyrocketing drug prices.

“Meantime, policymakers can help reduce Part D costs by ending longstanding regulations that have increased pricing power for drug manufacturers and independent drugstores by protecting them from competition. Since Part D's inception in 2006, plans have been forced to cover ‘me-too’ brand-name drugs whether or not drugmakers offered the kind of competitive, volume discounts that are seen in the private sector. Likewise, independent drugstores have enjoyed years of special protections that prohibit Part D plans from automatically delivering chronic prescription refills to seniors’ homes, even though it reduces medication errors, saves money, is popular with seniors, and is used four times more in private sector retiree plans than in Part D plans.

“The bottom line is that in the post-health reform era, Medicare can no longer afford to continue some of the expensive, special-interest policies of the past.”

PCMA represents the nation’s pharmacy benefit managers (PBMs), which improve affordability and quality of care through the use of electronic prescribing (e-prescribing), generic alternatives, mail-service pharmacies, and other innovative tools for 210-plus million Americans.

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Charles Coté, 202-207-3605

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