Highlights of the Second Annual P&T Society Meeting: Current Political and Prescription Benefits Environment
Speaker: Terry S. Latanich, JD, Senior Vice President for Government Affairs, Merck-Medco, Franklin Lakes, New Jersey.
Mr. Latanich’s presentation covered the Medicare drug benefit, Medicare-endorsed prescription cards, re-importation of prescription drugs, the Patient’s Bill of Rights (PBOR), generics legislation, and issues affecting the composition of P&T committees.
The Medicare drug benefit passed in the House of Representatives in 2000, but it was never considered in the Senate and died when Congress adjourned. The House Ways and Means and Commerce Committees and the Senate Finance Committee have been working to create legislation, but nothing has been drafted yet. The House Republicans want a program that would encourage private insurers, PBMs, or others to offer private insurance coverage with the government contributing to the “stop-loss” feature included in the 2000 Medicare drug benefit. This feature served as a catastrophic cap on patient expenditures. Under the House Republican program, there would be more limited federal subsidies than in the original benefit.
The Senate Democrats favor a program that would use multiple PBMs in regions of the country that would compete for individual enrollment by beneficiaries, but the federal government, instead of private insurers, would carry all financial risk. Congress has agreed on a price tag of about $300 billion over a 10-year period, but the Bush administration has earmarked only $190 million. The AARP advocates $750 billion. The Medicare prescription drug benefit is not likely to take effect until 2005 at the earliest, even if it is enacted soon.
In the various proposals for the Medicare drug benefit, there are legislative proposals affecting the composition of and required procedures for the P&T committee. Most of the legislative proposals consider the use of some entity external to P&T committees that would create a standard therapeutic category definition. After the categories were created, individual P&T committees and the plan sponsor would have to decide what goes into those categories.
President Bush proposed that private entities could create discount card programs for Medicare beneficiaries, if they met standards set forth by the Health and Human Services Department (HHS). This was intended to reduce the cost of prescription drugs. Those who offer the cards must cover one million lives in prescription drug programs regionally, and to offer the cards nationally, they must cover two million lives. The HHS has created a complex RFP to evaluate the programs. Most existing discount card programs would not qualify under this program. The enrollment had to be limited to Medicare beneficiaries in order to be endorsed by Medicare. Retail pharmacies filed a suit to block the proposal and the Centers for Medicare and Medicaid Services (CMS, formerly Health Care Financing Administration [HCFA]) was enjoined from implementing the program. The CMS has introduced a proposal through a Notice of Proposed Rulemaking (NPRM) that is similar to the enjoined program. NACDS and NCPA have sued in federal court to block NPRM, but there is no hearing date yet.
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The last congress passed legislation to permit the re-importation of drugs, under defined circumstances, into the U.S. from a defined list of foreign countries. The goal was to make available the prices offered by drug manufacturers in foreign countries (many of which have price controls). The Secretary of HHS had to certify that such a re-importation would save money, but since she did not, the legislation was killed. In this congress, there is similar legislation regarding Canadian mail service pharmacies. Some U.S. physicians are having Canadian physicians rewrite their prescriptions, fill them out at Canadian pharmacies, and mail them to the U.S. The Canadian professional associations are reviewing the question of whether the rewriting of prescriptions is ethical.
Neither the House nor the Senate has been able to reconcile the legislation about the PBOR. House Republicans want to limit the use of state courts and punitive damages, while the Senate Democrats would permit suits in state courts, with less significant restrictions on the use of state courts and damage awards. In terms of pharmacy benefits, there are two issues for debate: the content of any formulary used must be made public and drugs that are off-formulary must be made available to patients if their physicians deem them necessary. For the latter, legislation has not defined whether the determination is based on physician preference or on a patient-specific determination of need.
There have been several bills and concepts introduced regarding the perceived abuses by pharmaceutical companies in blocking the entry of generic drugs into the market by filing lawsuits alleging patent violations. The main goal of the legislation is to allow generic drugs early entry into the market. There is widespread support in Congress, but passage of such a bill is uncertain.
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These issues, especially the Medicare drug benefit, affect the role, power, and composition of the P&T committee of the future. Will there eventually be a “super P&T’ committee, instead of thousands of individual committees? Probably not-but we might take some steps in that direction. Some would like P&T committees to be independent from the plan sponsor. P&T committee control over drugs existing on or entering the formulary will also be closely watched.