Pentagon's TRICARE Costs Could Increase if Express Scripts-Medco Pharmacy Merger Approved



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Alexandria, Va. - Jan. 30, 2012

A bipartisan group of seven U.S. Representatives have written the Department of Defense (DoD) to express their concern that costs for the military's TRICARE program could rise under the proposed mega-merger of pharmacy benefit managers (PBMs) Express Scripts and Medco Health Solutions , the National Community Pharmacists Association (NCPA) said today.

The joint letter to the department was signed by Reps. Walter Jones (R-N.C.), Joe Courtney (D-Conn.), Mo Brooks (R-Ala.), Bill Owens (D-N.Y.), Martha Roby (R-Ala.), Mike Rogers (R-Ala.) and Austin Scott (R-Ga.). The lawmakers noted that the merger would leave the department with just two national PBMs to choose from (Express Scripts-Medco and CVS Caremark) that have the capacity to administer benefits for the 9 million Americans who depend on TRICARE.

"We are concerned these limitations would undermine TRICARE's negotiating leverage and limit TRICARE's ability to demand a quality prescription drug benefit," they wrote, pointing out that "there is little evidence that increased PBM market concentration will significantly lower costs for consumers or the American taxpayer."

"We greatly appreciate the leadership of Reps. Jones, Courtney and their colleagues for standing up for our military, taxpayers and small business community pharmacists when it comes to this merger," said NCPA CEO B. Douglas Hoey, RPh, MBA. "Those who rely on, pay for or administer large government programs like TRICARE may have the most to lose from the merger of Express Scripts and Medco. This merger would further reduce competition in the already concentrated PBM market and could lead to higher prescription drug costs, limited patient choice and inferior service."

Separately, NCPA recently sent the Pentagon advice on getting the most value out of its TRICARE pharmacy benefit as the department prepares to bid out a new, five-year contract. NCPA suggested TRICARE require more transparency from its PBM, such as in setting adequate maximum allowable cost (MAC) limits for generic drug reimbursement.

NCPA continues to hear complaints from pharmacists that TRICARE's incumbent PBM (Express Scripts) changes MACs at will, without notice to pharmacies, and without any regard to drug cost increases. It is also not clear whether the Pentagon benefits from these reimbursement cuts to pharmacies.

In addition, while cost-saving generic drugs now account for roughly 80 percent of medications dispensed, TRICARE's generic dispensing rate lags behind and is approximately 50 percent via Express Scripts mail order—calling into question the effectiveness of the program's pharmacy benefit management. Community pharmacies consistently dispense generic drugs more frequently than PBM-owned mail order facilities, which profit from brand manufacturer rebates and other revenue.

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. Together they represent a $93 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 315,000 people, including 62,400 pharmacists. Independent community pharmacists are readily accessible medication experts who can help lower health care spending. They are committed to maximizing the appropriate use of lower-cost generic drugs and reducing the estimated $290 billion that is wasted annually by improper medication use. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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