NCPA Urges U.S. Office of Personnel Management to Adopt Transparent Policies for Pharmacy Benefit Managers in Federal Employee Health Plan, Health Insurance Exchanges

Alexandria, VA - July 19, 2010


As the U.S. Office of Personnel Management (OPM) prepares to make some important decisions regarding the provision of pharmacy benefits to millions of Americans, the National Community Pharmacists Association (NCPA) today offered specific recommendations to preserve patient choice, while lowering drug costs for taxpayers.

"Greater federal and state oversight of pharmacy benefit managers is needed to address the problems local pharmacists and their patients continue to face in dealing with these unregulated entities," said NCPA Acting Executive Vice President and CEO Douglas Hoey, RPh. "PBMs have been permitted to operate virtually unchecked, slowed only by the increasing amount of litigation filed each year alleging fraudulent and deceptive business practices. OPM has a golden opportunity to address these issues. To that end, we encourage the agency to adopt transparent PBM policies to reduce costs and protect patient choice."

NCPA's letter to OPM, available in its entirety here, addresses two major areas in which the federal agency is expected to develop far-reaching pharmacy policies:

  1. Reforming the Federal Employee Health Benefits Program (FEHBP) prescription drug benefit.
    • Leading Members of Congress and other experts have raised fears that the government is paying far too much for the drug benefit, chiefly administered by CVS Caremark. NCPA's letter commends recently proposed OPM standards, which would require PBM disclosure of potential conflicts of interest; full pass-through of manufacturer rebates and other discounts; and grant OPM's Office of Inspector General access to all PBM records and contracts.
    • OPM should also require PBMs to disclose the basis of their reimbursement for mail order prescriptions, often dispensed by facilities owned by the PBM. PBM repackaging can create illusory "savings" when in fact the mail order prescription is more expensive than if it were dispensed by a community pharmacy.
    • NCPA reiterated support for H.R. 4489, a bill that would seek to impose transparency and other requirements on the PBMs that serve FEHBP plans.

  2. Implementing transparency requirements for PBMs operating in the health exchanges created by the Patient Protection and Affordable Care Act (PPACA - P.L. 111-148) and many of which OPM will administer.
    • NCPA's letter encourages OPM to include these disclosure requirements in any future regulations in this area.
    • In addition, NCPA suggests extending the recently proposed standards (referenced above) for PBMs operating in FEHBP plans so that they apply to all OPM administered plans, including the PBMs that will ultimately serve the multi-state exchanges.

The National Community Pharmacists Association (NCPA®) represents America's community pharmacists, including the owners of more than 22,700 independent community pharmacies, pharmacy franchises, and chains. Together they represent an $88 billion health-care marketplace, employ over 65,000 pharmacists, and dispense over 40% of all retail prescriptions. To learn more go to or read NCPA's blog, The Dose, at

Ask Your Family Pharmacist TM