February 9, 2015

H.R. 793 Would Eliminate Plans for Millions of Part D Seniors

(Washington, D.C.)— “Any Willing Pharmacy” legislation (H.R. 793) in Medicare Part D, backed by the drugstore lobby, would undermine the availability of lower cost, preferred pharmacies and increase Medicare spending by $21 billion over the next 10 years, according to research from The Moran Company examining the same bill introduced last year.

Seniors enrolled in these plans featuring preferred pharmacies are able to get their prescriptions filled at virtually any pharmacy but have the additional option of using a lower-cost preferred pharmacy. In 2015, almost nine out of 10 Part D plans will provide seniors the option of using a “preferred pharmacy” to lower their out-of-pocket costs. The Moran study finds that under “any willing pharmacy” requirements, pharmacies would “discontinue discounting since such discounts would no longer be a requirement for preferred network participation.”

The bill targets markets that are “medically underserved” by physicians and hospitals – not pharmacies – and would impact 95% of all Medicare beneficiaries. The Moran study points out “there is not necessarily a relationship between the underserved areas targeted in the legislation and pharmacy access. The targeted underserved areas are identified by primary medical care, dental or mental health providers, without regard to pharmacy access.”

“Lower cost preferred pharmacy plans have become the very foundation of Medicare Part D,” said Pharmaceutical Care Management Association (PCMA) President and CEO Mark Merritt. “It makes little sense to put these plans at risk.”

Key findings from The Moran Company study include:

  • While the legislation might appear on its face to be limited in geographic scope, our analysis of data from the Health Resources & Services Administration (HRSA) indicates that 94.77% of all Medicare Part D enrollees reside in counties meeting at least one of the “underserved area” criteria established in this legislation.
  • After offsets, we estimate that enactment of this legislation would increase Federal mandatory spending by $21.32 billion over the 2015-2024 scoring window.

Research and polling highlight the value of preferred pharmacies in Medicare, including:

  • survey conducted by Hart Research Associates shows that nine out of 10 seniors from urban, suburban, small town and rural areas have convenient access to these preferred pharmacies in Part D.
  • A recent analysis of CMS Part D 2015 enrollment data by Drug Channels shows that 81 percent of seniors chose lower-cost preferred pharmacy plans that offer convenient access and extra discounts at certain pharmacies.
  • Last year, theFTC wrote a letter to CMS on “any willing pharmacy” provisions included in the agency’s Medicare Part D rule and warned that: “The proposed any willing pharmacy provisions threaten the effectiveness of selective contracting with pharmacies as a tool for lowering costs. Requiring prescription drug plans to contract with any willing pharmacy would reduce the ability of plans to obtain price discounts based on the prospect of increased patient volume and thus impair the ability of prescription drug plans to negotiate the best prices with pharmacies.”
  • An actuarial study from Milliman finds that preferred pharmacies will reduce federal Medicare Part D costs up to $9.3 billion during the next 10 years.
  • CMS data and a study from Visante find that access to preferred pharmacies in rural areas greatly exceeds Medicare’s access standards.

Currently, most national Part D pharmacy networks include nearly all drugstores — almost 67,000 nationwide — giving beneficiaries access to more pharmacy locations than the combined number of McDonald’s, Burger Kings, Pizza Huts, Wendy’s, Taco Bells, Kentucky Fried Chickens, Domino’s Pizzas, and Dunkin’ Donuts across the country.