Witness’s testimony before Senate committee also describes role of pharmaceutical benefit managers
Mark Merritt, President and CEO of the Pharmaceutical Care Management Association (PCMA), testified before the United States Senate Special Committee on Aging in December 2015. The committee heard testimony from Merritt and three pharmaceutical scholars on “Sudden Price Spikes in Off-Patent Drugs: Perspectives from the Front Lines.”
PCMA is the national association representing America’s pharmacy benefit managers (PBMs), which administer prescription drug plans for over 253 million Americans with health coverage provided through Fortune 500 employers, health insurers, labor unions, Medicare, Medicaid, the Federal Employees Health Benefits Program (FEHBP), and the ACA Exchanges.
Mr. Merritt’s testimony included that “The number and range of specialty drug and biologic products available to patients has increased dramatically in recent years. As a general rule, specialty drugs treat more complex conditions requiring greater clinical oversight, may have more side effects requiring active clinical management, and involve more intense patient education. They are also typically very expensive—the highest priced specialty drugs can cost over $400,000 per patient per year. Thus, it is critical to help patients comply with their treatment regimens and ensure they are receiving the greatest value from their medications.”
Payers increasingly rely on specialty pharmacies to dispense these medications. Specialty pharmacies are distinct from retail pharmacies in that they coordinate the many aspects of care for people with complex and chronic conditions and provide robust offerings of clinical and operational specialty pharmacy services, said Merritt.
“These entities manage drug regimens for those with complex, chronic conditions, such as multiple sclerosis, hepatitis C, and rheumatoid arthritis; or rare medical conditions, such as cystic fibrosis, hemophilia, or multiple myeloma. Using dedicated, specialized personnel, a specialty pharmacy provides patient education and clinical support beyond traditional dispensing activities. Specialty pharmacies typically manage therapies where the drug is an oral, injectable, inhalable, or infusible drug product with unique storage or shipment requirements, such as refrigeration,” he added.
Recent reports, including some in the Deadly Prescription blog (involving the now-defunct Valeant Pharmaceuticals-owned pharmacy Philidor Rx Services), have shown the actions and practices of certain “bad apple” pharmacies—controlled or owned by drug manufacturers—that call themselves specialty pharmacies but, in reality, represent a marketing strategy to skirt plan formularies, which are time-tested tools for providing the dispensing of safe, high-value drugs.
These pharmacies often: generate a disproportionate share of sales from a single manufacturer’s products; dispense primarily non-specialty branded generics; and process a large number of co-pay offset programs for non-specialty products.
Mr. Merritt testified that “These bad-apple pharmacies typically fill brand-name drug prescriptions for the brand manufacturer’s own drugs, often providing a manufacturer-sponsored co-pay offset for the patient, instead of a more affordable generic. This raises costs in the drug benefit system, because most other pharmacies would substitute a more affordable alternative or generic drug. This, in turn, results in higher benefit costs for employers and the government, and higher premiums for patients and their families.”