The National Community Pharmacists Association (NCPA) offered several recommendations to a U.S. House Oversight and Government Reform Subcommittee questioning the Federal Employee Health Benefit Program's (FEHBP) $10 billion contract with CVS Caremark and Medco Health Solutions, Inc. On Tuesday, the Federal Workforce, Postal Service and District of Columbia Subcommittee held a forum with various stakeholders, including NCPA, to consider changes in the way FEHBP provides its pharmacy benefit.

"We strongly support the efforts of Chairman Stephen Lynch and his subcommittee to ensure that federal employees, their dependents and taxpayers get the best return on their health care dollars," said NCPA Executive Vice President and CEO Bruce T. Roberts, RPh. "Across the country, public and private sponsors of health plans are reducing costs by adopting more transparent pharmacy benefit management models."

NCPA's recommendations to the subcommittee include:

1. Having the federal government negotiate rebates from drug manufacturers. The Pentagon estimates saving $1.67 billion in its TRICARE program through a similar change.
2. Full pass through of manufacturer rebates. Presently pharmacy benefit managers (PBMs) negotiate discounts on behalf of FEHBP but pass the savings along only after withholding a significant portion. Passing more or all of the rebates through would reduce costs for the plan and patients.
3. OPM oversight of PBA contracting. Because the FEHBP program consists of many different programs, the Office of Personnel Management (OPM) should have more oversight of the contacting process with a Pharmacy Benefit Administrator (PBA) rather than a PBM. Millions of dollars in administrative costs would be saved if the pharmacy benefit was carved out, and a contract was awarded to a single PBA contractor, similar to the approach used by TRICARE. This would also give the government a much clearer picture from which to evaluate a PBA's performance.
4. No incentives to use mail order. There is no independent, peer-reviewed data that validates the large-scale savings mail-order pharmacies claim to offer. In fact, it's not uncommon for PBMs to reimburse themselves for a mail-order prescription at a much higher level than they would compensate a competing retail pharmacy for the same script. Given this, allowing the patient to choose among pharmacies competing on a level field is preferable to mail-order subsidies and mandates.
5. Incentives to use generics. The undisclosed PBM commission on rebates from brand name drugs creates a powerful disincentive against increased generic drug utilization. By contrast, community pharmacies have consistently been shown to dispense generic drugs at a higher rate than mail-order pharmacies.

At its health care reform markup on Friday, the Senate Finance Committee voted unanimously in favor of an amendment by Sen. Maria Cantwell (D-WA) to apply similar disclosure requirements to any PBM operating in the Medicare Part D benefit or in the health information exchanges created by the bill. A similar amendment by Rep. Anthony Weiner (D-NY) was added to the House health reform bill in July.

At a June hearing the subcommittee held, entitled "FEHBP's Prescription Drug Benefits: Deal or No Deal?", OPM's Inspector General testified that there is a "good chance" taxpayers and plan participants "were not getting a good deal" on prescription drugs. He couldn't say with certainty because PBMs routinely take steps to block such auditing or oversight.

The National Community Pharmacists Association, founded in 1898, represents the nation's community pharmacists, including the owners of more than 23,000 pharmacies. The nation's independent pharmacies, independent pharmacy franchises, and independent chains dispense nearly half of the nation's retail prescription medicines. To learn more go to the NCPA Web site.