PCMA: Michigan Legislation Eliminating Mail-Order Pharmacy Option Will Increase Cost of Prescription Drugs for Michigan Consumers by Nearly 10 Pct

3/22/2004

From: Phil Blando of the Pharmaceutical Care Management Association 202-207-3614

WASHINGTON, March 22 -- Legislation that would effectively eliminate the mail-order pharmacy option in the State of Michigan will increase the cost of prescription drugs for Michigan consumers by nearly 10 percent and a new poll of Michigan employers found 52 percent would increase premiums as a result, the Pharmaceutical Care Management Association (PCMA) said today. PCMA is the national trade association representing America's pharmaceutical benefit managers (PBMs).

"The human and economic cost of the retail pharmacy lobby agenda is too high a price for Michigan consumers to pay," said PCMA President & CEO Mark Merritt. "At a time when consumers, employers, and PBMs are working together to drive down the cost of prescription drugs, the retail pharmacy lobby agenda would increase the cost of prescription drugs in Michigan by nearly 10 percent. These proposals are a hidden tax on Michigan's working families and small businesses."

The new research was released today by the Michigan Health Purchaser Coalition. The Michigan Health Purchaser Coalition represents consumers, labor unions, small businesses, and manufacturers who are concerned about maintaining access to affordable prescription drugs. The Milliman analysis examined Michigan House Bills 4987, 5437 and 5438 -- the core of the retail pharmacy lobby agenda. Michigan consumers currently have the ability to fill prescriptions both at the retail pharmacy and through the mail-order pharmacy option. Regrettably, these proposals would harm Michigan residents by eliminating the mail- order pharmacy option and increasing pharmacists' reimbursement at the expense of affordable medicines for consumers.

Among the key findings Milliman found in analyzing Michigan House Bills 4987, 5437 & 5438:

-- The proposals are estimated to increase prescription drug costs for Michigan purchasers by $124 million or 9.5 percent.

-- The proposals are estimated to increase prescription drug costs by $36 dollars per person.

In addition to the Milliman analysis, PCMA released new polling data of Michigan employers. PCMA commissioned Ayres, McHenry & Associates to conduct 300 surveys with corporate benefit managers throughout Michigan from March 1-5 to March 8-11. Three key findings emerged from the survey:

-- Michigan's corporate benefit managers overwhelmingly think pharmaceutical benefit managers are a good idea. By a margin of 55 to 21 percent, corporate benefit managers think PBMs are a good idea because they "negotiate lower drug prices from drug companies, thereby saving employers and their employees money on drug costs," rather than a bad idea because they "just add another middle man between drug companies and employers and their employees."

-- By an even more overwhelming margin, Michigan's corporate benefit managers think mail order pharmacies are a good idea. By a margin of 85 to 11 percent, corporate benefit managers think mail order pharmacies are a good idea because "they allow employees to get drugs conveniently in larger quantities and at a lower cost than at a retail store," rather than a bad idea because they "hurt retail pharmacies and thereby limit the service and options available to employees."

-- If state legislatures require PBMs to make changes that have the effect of raising drug prices by ten percent, most corporate benefit managers say their companies would raise premiums to cover the increase. Fifty-two percent say their companies would raise premiums, 18 percent say they would reduce benefits, and 20 percent say they would just absorb the increased costs.