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NACDS, NCPA sue to block Medicare Rx card plan

Community pharmacy and its allies are going to war over a prescription discount card for seniors that was furtively crafted by the biggest pharmacy benefit management companies and the Bush Administration. The plan, which the Administration said it could implement without going to Congress or through the usual regulatory process, encourages PBMs to offer discount cards with a Medicare stamp of approval.

In White House briefing material, the plan promised discounts of 10%-25% "off retail" and more for going through mail order. Sponsors could charge an enrollment fee of up to $25 and are expected to negotiate rebates with pharmaceutical manufacturers, the material said. The Centers for Medicare & Medicaid Services (CMS) suggested—but will not require—that rebates be shared with patients and/or pharmacies. CMS is scheduled to begin issuing the Medicare imprimatur to qualified cards in September. Marketing can start Nov. 1, with the discounts kicking in no later than Jan. 1.

The decision especially stung the National Association of Chain Drug Stores and the National Commu-nity Pharmacists Association. The NACDS political action committee last year contributed heavily to Republican candidates and GOP campaign committees. In addition, CEO Craig Fuller had been chief of staff to the President's father and has known George W. for more than 15 years.

Five days after the White House announced the plan, NACDS and NCPA filed suit in U.S. District Court attempting to block it. "The PBMs will profit by: charging Medicare beneficiaries enrollment fees; extracting price discounts from pharmacies and rebates from manufacturers that need not be shared with Medicare beneficiaries; and steering beneficiaries to mail-order pharmacies owned by PBMs," the complaint charges.

The 30-page document is larded with references to undisclosed meetings between the Administration and the PBMs, variously described as secret, clandestine, closed-door, and back room. Democratic Reps. Mike Ross—who, with his R.Ph. wife, owns a pharmacy in Arkansas—and Pete Stark of California said they were taking the necessary legal steps to formally join the suit.

In addition to the suit, NACDS, NCPA, and six other pharmacy organizations urged the President to abandon his plan. They noted that PBMs often tie participation in discount card programs they administer to participation in actual pharmacy benefit insurance programs.

Rep. Marion Berry (D, Ark.), the only R.Ph. in Congress, said at a news conference in front of an independent pharmacy three blocks from the Capitol that he would introduce legislation to dramatically change the discount card plan. He said it would require pharmaceutical makers to charge pharmacies the same prices the Department of Veterans Affairs receives, forbid PBMs from seeking rebates from manufacturers, and let in any pharmacy that wants to participate.

In addition, pharmacy groups will seek an amendment in Congress to block the Department of Health & Human Services from spending the $35 million it has earmarked to promote the cards.

But with that being the only federal money on the table, many lawmakers seem inclined to let pharmacies carry the burden. Most of the opposition on Capitol Hill is coming from Democrats. AARP and the American Medical Association gave their endorsements to the cards, while the Pharmaceutical Research & Manufacturers of America said little.

The Pharmaceutical Care Management Association applauded the White House plan, and representatives from five of its member companies—AdvancePCS, Caremark Rx, Express Scripts, Merck-Medco, and Wellpoint—were credited with drafting most of it.

In one contentious session that was closed to the press and attended by pharmacy representatives, CMS administrator Tom Scully was asked what the Administration's legal authority was to implement the program. According to three sources present, he responded: "God."

Michael F. Conlan

Mike Conlan. NACDS, NCPA sue to block Medicare Rx card plan.

Drug Topics

2001;15:12.