Community Pharmacists Endorse Bipartisan Pharmacy Competition and Consumer Choice Act

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McMorris Rodgers Bill Would Promote Patient Choice,
Reduce Wasteful Spending, and Scale Back Abusive Pharmacy Audits

Alexandria, Va. - May 24, 2011

The National Community Pharmacists Association today endorsed the Pharmacy Competition and Consumer Choice Act of 2011, H.R. 1971, which would protect patients' ability to go to the pharmacy of their choice, eliminate needless pharmaceutical spending and allow legitimate anti-fraud oversight, while avoiding abusive pharmacy audits.

"This bipartisan legislation would implement some badly needed reforms to give consumers new rights, reduce wasteful pharmaceutical spending and level the pharmacy playing field," said Robert Greenwood, RPh, NCPA President and Waterloo, Iowa pharmacy owner.

Introduced by U.S. Rep. Cathy McMorris Rodgers (R-Wash.), H.R. 1971 would:

  • Give patients a true choice of pharmacy. Patients would be protected from having limited access to their pharmacy of choice or being financially punished for having their prescription filled at a community pharmacy rather than one owned by their plan's pharmacy benefit manager (PBM).
  • Establish new consumer protections. Sensitive patient information could not be sold by a PBM without the health plan being notified in advance. In addition, patients would be shielded from solicitations by pharmacy benefit managers until the patient and plan provide written consent.
  • Eliminate wasteful pharmaceutical spending. Billion-dollar middlemen, the major PBMs like CVS Caremark, Medco and Express Scripts face an inherent conflict of interest as both pharmacy benefit administrators and pharmacy providers. They have paid $370 million in recent years to settle claims of deceptive conduct and fraud, while their profits increased 400 percent. Recognizing this, Congress enacted bipartisan PBM disclosure legislation in 2010 that applies to Medicare Part D and the state health exchanges that are expected to launch in 2014. The McMorris Rodgers proposal would extend these protections to private insurance plans and patients. Plan sponsors would be better able to drive a better bargain and reduce costs by identifying costly profit-padding practices, such as switching patients to costlier drugs, hoarding manufacturer rebates and billing plans inflated amounts for prescription claims.
  • Level the playing field among pharmacies. "Restricted network" plans limit patients to a specified list of pharmacies, usually without independent community pharmacies ever having an opportunity to compete for the business. The legislation would allow "any willing provider" that agrees to accept a health plan's terms and reimbursement rates to participate in that plan, so long as the pharmacy is licensed in that particular state and eligible to participate in federal and state health plans (which remove any providers that commit fraud). The bill would also ensure that private plans provide pharmacies with timely reimbursement, as required under Medicare Part D, rather than delaying the payments to generate interest from those funds. In addition, the bill would give pharmacies basic information about how the PBM determines reimbursement rates (e.g., Maximum Allowable Costs, or MACs) and requires those rates to be updated frequently to reflect changes in drug costs and keep pharmacies whole.
  • Allow oversight for fraud, not abusive pharmacy audits. Legitimate anti-fraud efforts could continue, but pharmacies would not be penalized by commission-driven bounty-hunting auditors over minor typographical or clerical errors.

While having some similar provisions to the PBM Audit Reform and Transparency Act of 2010 (H.R. 5234) introduced in the last Congress, the bill's sponsors made some adjustments as well. For example, there is no requirement that pharmacies receive a 15-day notice before an audit and the lawmakers clarified that the "any willing provider" language does not apply to any pharmacy that has been excluded from a federal or state program.

"We strongly commend Representative McMorris Rodgers for sponsoring this bipartisan bill," Greenwood added. "As we meet in Washington this week for our annual Legislative Conference, local pharmacists will urge all Members of Congress to stand up for patients and small business by supporting this legislation."

The National Community Pharmacists Association (NCPA®) represents the interests of America's community pharmacists, including the owners of more than 23,000 independent community pharmacies, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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