The Whac-A-Mole Pharmacy Regulation
It seems you can whack one bad pharmacy regulation down and it pops right up somewhere else. Earlier this year the Centers for Medicare and Medicaid Services issued a proposed rule that would have effectively banned preferred pharmacy networks in Medicare drug plans. Preferred networks are a common strategy drug plans use to negotiate lower prices with drugstores competing to be included in the exclusive network. Seniors who patronize the preferred network pharmacies when filling prescriptions are generally rewarded with lower cost-sharing — sometimes copays as low as $0! Who wouldn’t love that?
Well, apparently the losing pharmacies don’t like that deal. These are the pharmacies who couldn’t offer the lowest prices when competing to be included in the preferred network. Those who can’t (or won’t) compete are cut off from the taxpayer-funded trough since most seniors like lower copays!
When CMS proposed this back in January, the opposition from stakeholders was overwhelming. The Federal Trade Commission said for the umpteenth time (also here, here, here, here, here) this rule change would boost costs to consumers. CMS backed away from the proposal — at least temporarily. In March Administrator Tavenner wrote a letter to Congress reporting the agency would not move forward at this time.
Fast forward to May and it’s déjà vu all over again. In May a bill was introduced in Congress (H.R. 4577) — the Ensuring Seniors Access to Local Pharmacies Act, which is again, an attempt to effectively do away with Medicare drug plan pharmacy networks that reward seniors for choosing cheaper pharmacies. Technically the change would apply to medically underserved area, but the official designation of underserved is pretty loose. Under the proposal local community pharmacies willing to meet the terms of the preferred network would be free to fill prescriptions under those terms. This may sound like no big deal. However, the FTC has advised on numerous occasions (here,here, here, here, here, here) the arrangement is not benign. It undermines the bargaining power health and drug plans used to negotiate the lowest prices for seniors. If there’s no chance of being excluded from the network why offer your lowest price? A more accurate description would have titled the bill The Ensuring Local Pharmacies Access to Seniors Act.
“It undermines the bargaining power health and drug plans used to negotiate the lowest prices for seniors. If there’s no chance of being excluded from the network why offer your lowest price?”
This is more of reducing competition because they don’t want to offer low enough prices in order to compete. So instead, regulation is passed to raise prices on seniors. Let the seniors get the short end of the stick, right?
Well most seniors should be somewhat well of financially at this point, and they won’t be around for a whole lot longer. I guess the rationale for regulation checks out.
“The Ensuring Local Pharmacies Access to Seniors Act.”
I think this is much more appropriate, but I am sure they would think it just doesn’t have the same ring to it.
I like this one: HHS Ensuring Local Pharmacies Access to Seniors Statute Or HELP ASS.
I think this acronym is very well suited for the act. It also doubles as a very common phrase uttered among seniors.
It’s as if they are purposefully trying to rid seniors of deals that they like with their drug plans. If they system isn’t broke, don’t fix it.
Well it is Medicare drug plans. Its not like the seniors are going to take their business elsewhere. Governments tend to not have customer satisfaction surveys.
I thought that was called voting…
Supposedly, Medicare benis already have freedom of choice to goto any willing participating provider (pharmacy) they want to but the insurance companies want to use their own mail order PHarmacy Benefit Management companies or large national pharmacy chains so their pharmacy network panels are always “closed” to outside local pharmacies. If the fee schedule for Meds is fixed across all providers, what harm is it to let any willing provider participate? How does it drive up costs if, to be a member of the preferred network, you must abide by the published fee schedule?
Was it in 2012 when express/scripts pushed for mandatory mail in part D? they said it was a cost saver. Do you believe, even a nanosecond, that express/scripts pushes any savings they receive from squeezing pharmacy to the taxpayer (CMS)? Get real. they are crony capitalist who support mass produced health care at the expensive of the patient provider relationship. NCPA should stick to promoting HSA accounts. Patients can do a better job of controlling costs and improving quality when compared to any PBM.