Medicare Compliance & Reimbursement

Health plans and pharmaceutical companies in high-stakes, big-dollar clash

As the countdown proceeds toward the January 2006 launch of the full prescription-drug benefit, sparring continues over how wide a choice of medications a beneficiary will get in a Medicare private health plan or prescription drug plan.

Some battles have a heavy tinge of the political, with various pharmaceutical-related constituencies looking to improve their credibility with the public and with policymakers as the true guardians of beneficiaries' health and/or taxpayers' wallets.
 
For example, in a recent round, U.S. Pharmacopeia, which is developing model guidelines for drug formularies in the benefit, was caught up in a tussle between pharmaceutical manufacturers - who want as many drugs as possible included on the preferred-medication lists - and pharmacy benefit managers, who will bear responsibility for keeping costs down and ensuring that drug dollars purchase value.

The Pharmaceutical Care Management Association, which represents PBMs, recently charged that drug makers have too much power to shape the coming benefit, in part because pharmaceutical companies "are sitting on the U.S. Pharmacopeia executive board, where they play a huge role in determining the USP's model guidelines," PCMA President Mark Merritt charged in a Nov. 12 article in FDAnews Drug Daily Bulletin.

But USP - a 184-year-old nonprofit, nongovernmental group that establishes standards for medications and other health technologies - says that its governing board plays no role in developing the Medicare plan. USP says its guidelines are devised by an elected, technical expert panel, not by its governing board.

Politicking aside, USPs' draft guidelines continue to be a lightning rod for criticism by PBMs, insurers, and companies that provide retiree health coverage. Those parties, who will design - and ultimately defend against critics - the actual formularies beneficiaries use, fear that the model may hamper their ability to purchase drugs based on value and bargain successfully for lower prices.

"Since USP's draft model guidelines are already more expansive than the number of categories and classes used in many private-sector formularies, it would be highly detrimental ... if the categories and classes are increased," a health-plan/employer/PBM coalition wrote Medicare chief Mark McClellan, MD, Nov. 17. "In fact, consideration should be given to have the guidelines more closely reflect these private-sector practices," wrote the group, which includes the BlueCross BlueShield Association, America's Health Insurance Plans, and the National Business Group on Health.

The guidelines are intended as a "safe harbor" for formulary sponsors. Sponsors can devise their own formularies using their own classes and categories, but those whose formularies mirror the guidelines precisely will be freed from further scrutiny by the Centers for Medicare & Medicaid Services.
 
It seems simple enough: If you don't like the USP guidelines, use your own and make evidence-based arguments to CMS in defense of your program. But that could be easier said than done if the guidelines veer significantly - as they now do - from the standard structure of formularies in the marketplace, said Joel Owerbach, pharmacy chief of New York-based Excellus BlueCross BlueShield, in a Nov. 30 conference call with reporters.