Pharmacies Allowed To Negotiate Contracts With Part D Plans

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Legislation that wouldallow independent pharmacies to negotiate contracts directly with healthinsurers and pharmacy benefit managers in the Medicare prescription drugprogram would cost the government $681 million over five years, according to a Congressional Budget Office study, CQ HealthBeat reports. If the Community PharmacyFairness Act (HR 971) is passed, most of the cost increase over the next fiveyears would come from an additional $540 million for the Medicare drug benefit,and $115 million in lost federal tax revenue. In addition, the cost of drugswould increase for the Federal Employee Health Benefits and Medicaid programs by $26million, according to CQ HealthBeat.

Crystal Wright, a spokesperson for the Association of Community Pharmacists CongressionalNetwork, noted thecontrast between the CBO study and the findings of a 2007 Pharmaceutical Care Management Association report that showed the cost of the Medicaredrug program would increase by $6.4 billion over five years under the measure,according to CQ HealthBeat. According to PCMA President Mark Merritt,the bill has changed slightly since that study. PCMA in a statement wrote thatthe measure "would give independent pharmacies a 'license to collude' toraise prescription drug prices."

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According to the CBO study, drug prices at independent pharmacies wouldincrease by 1% by 2010. The increased cost of drugs would increase premiums ingroup health insurance plans by less than 0.1%, with 60% of that increaseoffset by reductions to health insurance benefits. Wright said, "Over1,100 independent pharmacies closed last year due to under-reimbursement"from the Medicare prescription drug benefit, adding, "Congress needs toact" (Straus, CQ HealthBeat, 1/16).

Lobbyists

In related news, The Hill on Thursday examined how the "annualbattle between independent pharmacies and pharmacy benefit management companiesis already nearing fever pitch." PCMA and three groups representingindependent pharmacies have "been busy taking shots at each other"this month and are "spinning" the CBO report as "supportive oftheir positions," The Hill reports (Young, The Hill,1/17).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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