Pharmacists Offer Cost-Cutting Recommendations to Congressional Deficit "Super" Committee


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Alexandria, Va. - September 8, 2011

To cut the deficit, Congress should consider adopting common-sense reforms to reduce federal health care expenditures without compromising patients' access to their pharmacy of choice or harming local jobs, the National Community Pharmacists Association (NCPA) said in a letter to the leaders of the new Joint Select Committee on Deficit Reduction.

"We believe that significant savings can be found through simple reforms to programs like Medicare and Medicaid that will result in reduced drug costs for the federal government and consumers," said NCPA Executive Vice President and CEO B. Douglas Hoey, RPh, MBA. "Nothing can save the health system more money than the appropriate use of generic medications. Local pharmacists are leading the way on the proper use of these cost-cutting drugs. In addition, pharmacists, working with prescribers, can help improve the use of medications through counseling, adherence and medication therapy management programs. When the health benefits of medications are maximized then the likelihood of costly health complications will be reduced."

NCPA's letter, available in its entirety here, made the following recommendations to lawmakers:

  • Increase the use of lower-cost generic medications. Generic drugs are one-fifth of the cost of brand-name drugs and nearly every federal health program can increase the proportion of prescriptions filled with generics. Community pharmacists dispensed generics 72 percent of the time in 2010 – 10 percentage points higher than mail order facilities, which profit from brand manufacturer rebates. A five percentage point increase in generic dispensing in Medicare Part D and Medicaid would result in about $9 billion in annual savings.
  • Better management of patients' drug therapy. Studies have found that services such as medication therapy management (MTM) provided by community pharmacists can help reduce the price, estimated to be as much as $290 billion annually, of improper medication use.
  • Collect billions of dollars in manufacturer rebates currently retained by pharmacy benefit managers (PBMs). The U.S. Department of Health and Human Services Office of the Inspector General has found that, in the Medicare Part D program, PBMs do not pass on to beneficiaries the full amount of rebates and that PBMs and other Part D plan sponsors routinely underestimate future rebates. Both practices lead to higher premiums and overpayments by the government. Instead, the government should insist on full, 100% pass-through of rebates. More broadly, in Medicare Part D, Medicaid, the Federal Employees Health Benefits Program (or FEHBP), TRICARE and other programs billions of dollars in savings remain "on the table" due to the lack of competition in and oversight of the major PBMs' management of drug benefits.
  • Ensure patient choice in pharmacy; avoid mandatory mail order requirements. Community pharmacists routinely encounter patients disposing thousands of dollars worth of unusable, excess medication received through the mail. In Medicare Part B, the same has been true for products such as diabetes test strips.
"We look forward to working with Congress to assure that pharmacy does all it can to reduce costs in the Medicare and Medicaid programs, while maintaining access to community pharmacies," Hoey added.

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, pharmacy franchises, and chains. Together they represent a $93 billion health-care marketplace, have more than 315,000 employees including 62,400 pharmacists, and dispense over 41% of all retail prescriptions. To learn more go to www.ncpanet.org or read NCPA's blog, The Dose, at http://ncpanet.wordpress.com.

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