The National Community Pharmacists Association, which represents more than 22,000 independent community pharmacies nationwide, this week sent OPM a letter urging increased oversight of pharmacy benefit managers, the companies that administer prescription drug programs under various health plans.
In the letter, John Coster, NCPA senior vice president for government affairs, said the organization long has championed the need for stronger oversight of PBMs, both at the state and federal levels.
"PBMs have been permitted to operate virtually unchecked since their inception, slowed only by the increasing amount of litigation alleging fraudulent and deceptive business practices filed against the PBMs each year," Coster wrote.
NCPA supports the Federal Employees Health Benefits Program Prescription Drug Integrity, Transparency and Cost Savings Act (H.R. 4489), which Rep. Stephen Lynch, D-Mass., introduced in January. The legislation would impose requirements on pharmacy benefit managers serving any insurance plan under FEHBP. It is awaiting a vote in the House Oversight and Government Reform Committee.
If the bill were to become law, PBMs in which pharmaceutical drug manufacturers or retail pharmacies have a controlling interest would be prohibited from participation in FEHBP, among other restrictions. It also would prohibit OPM from allowing a health care carrier that has a controlling interest in a PBM to earn a profit from such interest with respect to an FEHBP contract.
Each health care carrier would be required to certify annually that it was in compliance with all established PBM restrictions.
Upon introducing the bill, Lynch said FEHBP health plans contract with PBMs and, unlike other federal health programs, FEHBP does not regulate or negotiate drug pricing for its members. The program, instead, relies on competition among the various health care providers and PBMs to keep prices low.
"However, as we recently affirmed, prices are not low," Lynch said, citing months of research and collaboration with key stakeholders. Other federal programs such as those run by the Defense and Veterans Affairs departments, and Medicare and Medicaid, offer better prices for prescription drugs, Lynch said, as do private sector employers such as Costco and drugstore.com. "If the FEHBP wants to remain a model for providing health benefits, legislative changes that allow for alternative prescription drug benefit contracting and pricing are in order," he said.
The association also supports standards OPM proposed recently that would oblige pharmacy benefit managers to disclose the names of any entities that maintain a controlling interest, require PBMs to pass through to the carrier any "negotiated discounts, rebates, credits or other financial benefits," and provide OPM's inspector general with access to all PBM records and contracts.
"NCPA feels strongly that all of these provisions must be retained in any final version of these standards, including all future versions, in order to affect any meaningful reform of the current system and to ensure that the federal government is able to reduce prescription drug spending and receive high-quality, cost effective services from its PBM," Coster wrote.
NCPA supports extending these standards to all OPM-administered health care plans, not just those under FEHBP. This would include the multistate exchanges to be created under the health care reform legislation President Obama signed in March.
OPM spokesman Edmund Byrnes said the agency is in the process of putting together a formal response to NCPA's recommendations.