Pharmacists back measures to cut feds’ prescription drug costs

A group representing independent pharmacy owners, managers and employees is urging the Office of Personnel Management to take a number of steps to ensure federal workers get the best deal on prescription drugs.

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 "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.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.


When you download a report, your information may be shared with the underwriters of that document.