Alexandria, Va. March 12, 2013 - Oregon's community pharmacists have a prescription to keep more health care dollars within the state to support local jobs, while bringing more clarity to complex drug pricing practices and giving consumers greater choice of pharmacy.
"As one of the country's most-trusted professionals, community pharmacists work with patients and doctors every day to promote the safe use of prescription drugs. Pharmacists help patients and those that sponsor health care plans, such as employers, get the maximum value out of their prescription drug benefit," said Michele Belcher, pharmacist and owner of Grants Pass Pharmacy in Grants Pass, Ore. Belcher also serves as Second Vice President of the National Community Pharmacists Association (NCPA). "This legislation will help prescription drug programs work more efficiently for employers, fairly for pharmacists and ensure more of Oregon health care dollars contribute to local jobs and small businesses."
Pharmacists are calling on state lawmakers to support three legislative proposals during the current session. There are 153 independent community pharmacies in Oregon, employing 1,600 citizens and generating over $586 million in annual sales for the state economy.
First, S.B. 402, would give employers and other plan sponsors greater insights into how intermediaries known as pharmacy benefit managers (PBMs) determine the rates ("maximum allowable costs" or MACs) at which they pay pharmacies for dispensing generic drugs as well as the rates at which the PBMs will bill the plan sponsor for those same claims. The legislation also gives pharmacists clarity on how MAC reimbursement limits are set, require them to be updated to reflect rising drug costs and to put in place an appeals process for when disputes arise about MAC rates.
"No homebuilder would agree to build a house without knowing what they would be paid, the cost of their construction materials or whether they would be held harmless when the cost of lumber or other goods increases," said Belcher. "Yet that's exactly the situation that community pharmacists are in today. This bill would simply let the pharmacist know how they will be reimbursed for drugs and allows employers to better understand what makes up their drug plan costs."
At a recent legislative hearing, an Oregon pharmacist reported being reimbursed less than $1.80 for a prescription for which the previous reimbursement was $8.69. A pharmacy's cost of dispensing has been estimated to be $12.39 per prescription in the Pacific Northwest.
Similar legislation is moving forward in Kentucky, North Dakota and Oklahoma.
Second, H.B. 2123 would establish reasonable standards for pharmacy audits as well as require PBMs to register in the state and be licensed by the Oregon State Board of Pharmacy. The bill also includes the same MAC disclosure and updating requirements featured in S.B. 402.
"Pharmacists welcome reasonable oversight to guard against waste, fraud and abuse," added Belcher. "However, pharmacy auditors are sending Oregon health care dollars out-of-state by recouping many thousands of dollars from local pharmacies over trivial clerical errors that have nothing to do with fraud. Medicare officials recently attested to the problems that they see with pharmacy audits as well. This legislation is based on a simple principle: when a pharmacist dispenses the right medication to the right patient at the right time and for the agreed upon price, it shouldn't be a punishable offense.
"Pharmacists and the lawmakers sponsoring this proposal have worked in good faith with PBM representatives on the audit provisions of this legislation for many months," Belcher added. "Changes were made to address many of the PBMs' concerns with the bill's original language. So it's surprising and disappointing to see the PBMs walk away from this compromise legislation at the 11th hour and now attack the bill. Oregon lawmakers should approve this legislation, which reflects many months' worth of effort to forge a consensus approach that works for pharmacists and PBMs."
PBMs heavily influence virtually every patient's access to prescription drugs and many PBMs run out-of-state mail order pharmacies that ship drugs into Oregon. Despite this, the Oregon State Board of Pharmacy, which is charged with protecting the public health, safety and welfare, has no oversight authority over PBMs. H.B. 2123 would address this regulatory oversight by requiring board registration and licensure of PBMs.
Third, S.B. 363 would give Oregonians more choice among pharmacies in filling their prescriptions—at no extra cost. Some health plans require that patients use out-of-state mail order pharmacies to fill certain prescriptions, typically 90-day supplies of "maintenance" medications. S.B. 363 would allow those patients to transfer such prescriptions to any local pharmacy that is willing to accept the same reimbursement and terms as mail order—ensuring that the costs to the patients and the health plan do not increase. Similar legislation was recently enacted in New York and Pennsylvania, giving consumers additional options while keeping more health care dollars in the state to support the local economy and jobs.
Four out of five patients prefer to use a community pharmacy rather than mail order. Moreover, a new study examining millions of 2010 Medicare prescription drug event data found that local pharmacies provide 90-day supplies of prescription drugs at lower overall cost than mail order pharmacies and that community pharmacists were more effective than mail order in promoting the appropriate use of lower-cost generic drugs. Mail order pharmacies have also been associated with generating wasteful healthcare spending, as Medicare officials recently affirmed.
The need for greater transparency in PBM business operations has been well-established. PBMs have paid $370 million to settle claims of deceptive practices or fraud over the past decade, with other cases pending. In Oregon, a 2006 report authored by the Heinz Family Philanthropies for then-Governor Ted Kulongoski of Oregon strongly recommends that the state provide for the transparency of PBMs.
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 an $88.5 billion health care marketplace, dispense nearly 40% of all retail prescriptions, and employ more than 300,000 individuals, including over 62,000 pharmacists. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com/.
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