Pending Pharmacy Bill Creates Friction
A bill in the state Legislature that would allow health plan enrollees to opt-out of mandatory mail-order prescription drug plans has raised the ire of a lobbying group for that sector, claiming it would lead to Californians forfeiting nearly $2 billion a year in cost savings next year.
The bill, AB 2418, is in hearings in front of the Senate Health Committee this week after being passed by the Assembly 75-1 late last month. Authored by Susan Bonilla, D-Concord, it would allow any enrollee in a health plan that mandates mail-ordered prescriptions to be able to opt out starting in 2016.
The Washington, D.C.-based Pharmaceutical Care Management Association launched a public relations campaign against the bill earlier this week by releasing a study touting the cost-effectiveness of mail-order prescriptions while criticizing another powerful player in the realm – retail drug chains.
"This bill profits the drugstore lobby by eliminating a safer, more affordable pharmacy option that many employers have embraced," said PCMA Chief Executive Officer Mark Merritt. "Automatic home delivery of refills is among the easiest, most popular ways to reduce pharmacy costs. Many employers and patients see it as a much better option than cutting benefits or raising premiums."
Mail order prescription plans tend to be popular with large employer groups, with about 25% of such plans mandating that drugs be dispensed by the mail, according to data from the Pharmacy Benefit Management Institute. Currently, about 1 million Californians currently enrolled in health plans with a mail-order pharmacy component.
The mail order space is dominated by St. Louis-based Express Scripts, which consolidated its position with its 2012 acquisition of its longtime rival Medco for $29.1 billion. However, CVS also has a large mail-order business, as well as health plans Aetna, Cigna and Humana.
While the mail-order pharmacy issue has mostly flown under the radar, it presents delicate challenges. Although it is often touted as costing less money than ordering directly from the pharmacy because dispensing firms order prescription medicines in bulk, some health plan enrollees have said they prefer seeing a pharmacist face-to-face.
“This bill creates processes that improve patients’ access to medications and encourages interaction between patients, pharmacists and doctors to ensure patients receive their medications in a timely, convenient manner,” Bonilla said.
Of particular concern to the mail-order pharmaceutical sector is a provision in Bonilla's bill that focuses on specialty drugs to treat chronic conditions. It would allow patients to fill all their medications on the same schedule, as well as allow them to refill some medications early if they accidentally spill or overuse them, such as specialty eye drops.
PCMA hired Visante, a Minnesota-based healthcare consulting firm, to compile data on the sector in California. Its conclusions: Mail-order pharmacies save about 16% compared to bricks-and-mortar pharmacies.
The PCMA study cited general data from a 2013 Centers for Medicare & Medicaid Services survey that concluded Part D mail-order generic drugs were slightly less costly than their counterparts dispensed at retail sites. However, the survey noted that in many instances mail-order prices for standalone prescription drug plans were
considerably higher than retail prices.
“CMS continues to be concerned about the impact of these prices on the Part D program,” the agency concluded.
Nonetheless, PCMA estimates that Californians would save $500 million next year on regular prescription drugs via mail-order next year, and $1.3 billion on specialty drugs, and a combined $31 billion over the next decade.
The bill is supported by labor unions, advocacy groups for seniors, the California Association of Physician Groups and drug and grocery retailers. It is opposed by Anthem Blue Cross of California, Blue Shield of California, Express Scripts, CVS Caremark and the California Association of Health Plans.
There is a troubling (pricing) trend in prescription drugs that undermines the progress we are making in improving our healthcare system. Mail order is one way of lowering prices and AB 2418 could compromise this cost-saving tool,” said CAHP President Patrick Johnston.
