PHARMACY

Reports: Obama administration offers compromise on birth control requirements

BY Alaric DeArment

NEW YORK — Controversy over a plan by the Obama administration to require health insurance plans to provide free contraception to women has led the administration to seek a policy that it is calling a compromise with conservative groups opposed to the measure, according to published reports.

The controversy surrounded the new rule’s requirement that employee health insurance plans provide free birth control, including those run by the Roman Catholic church, such as hospitals and universities. The Church opposes birth control.

According to the New York Times, the administration is planning to offer an "accommodation" that would allow religious organizations to forgo offering free birth control, while employees needing it would be able to get it as a side benefit for a small fee, but it would effectively be free for them.


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Rival PBMs plan to take advantage over last month of Express Scripts-Medco uncertainty

BY Michael Johnsen

WHAT IT MEANS AND WHY IT’S IMPORTANT — The regulatory review of the Express Scripts-Medco merger now is in its final stages, and with the clock ticking down to that 30-day deadline, you can expect a full court-press from retail pharmacy interests looking to block the deal. The time for the three-point finesse shots from the corners of the court has passed, it’s now time to charge the net and jam the message home; an Express Scripts-Medco merger is bad both for the retail pharmacy business and for consumers. However, it just might be good for CVS Caremark.

(THE NEWS: Report: FTC to rule on Express Scripts, Medco merger within 30 days. For the full story, click here.)

Not a finalized, approved merger, mind you. That wouldn’t necessarily be any better for CVS Caremark’s retail operations than it would be for any other pharmacy operator. But the uncertainty of the moment, just as both health plans and employers are starting to enter their request for proposal processes for the pending PBM selling season, it’s that uncertainty that’s good for CVS Caremark. "We are expecting to see more RFPs out in the marketplace this year," said Larry Merlo, CEO, president and director during an analyst call last week. "The benefit consultants are driving that with the Express-Medco deal on the horizon. So we do see more activity coming."

Incidentally, CVS Caremark is also benefiting from the Walgreens-Express Scripts failed contract negotiations. Though that benefit is showing up in transferred patients from Walgreens rather than any negotiating leverage for CVS’ PBM operation. "I don’t think the Express-Walgreens issue per se is particularly a significant factor," noted Per Lofberg, EVP and president of Caremark Pharmacy Services during the company’s analyst call Feb. 8. "I do think that there will be an interest in comparing the cost savings and the benefits from restricted networks going forward, and that is probably, to some extent, prompted by the Express-Walgreens impasse, but that will be just one factor that we’ll be interested in."

Lofberg suggested a rival PBM would need to produce savings in excess of 2% "for it to be a meaningful benefit to a customer and to justify the disruption that is inevitable when you change the network."

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NACDS, California pharmacy groups urge CMS to block proposed state plan amendment

BY Antoinette Alexander

SACRAMENTO, Calif. — The National Association of Chain Drug Stores and California pharmacy groups have banded together to urge the Centers for Medicare and Medicaid Services to prevent the implementation of a state plan amendment — proposed by the California Department of Health Care Services — which they say would place significant limitations on access to pharmacy care and services for the state’s Medi-Cal patients.

In a letter to CMS, NACDS, the California Retailers Association and the California Pharmacists Association cited “serious” concerns about the proposed amendment, which would allow DHCS to establish and implement an unpredictable pharmacy reimbursement structure. The groups emphasized that reimbursement cuts could result in store closings, as well as reduced pharmacy hours and patient services.

“Reducing pharmacy reimbursement rates in the Medi-Cal program will inevitably harm beneficiaries’ access to drug benefits, violating federal law and very likely resulting in increased healthcare costs. We believe DHCS should abandon its short-sighted strategy of cutting provider payments and instead focus on more innovative ways of improving efficiencies in the Medi-Cal program,” the groups stated in the letter.

The letter continued, “DHCS proposes to reduce the reimbursements for some drug products by less than 10%, others more than 10%, with the ultimate goal of the overall cuts to reimbursements not exceeding 10% in the aggregate.  However, the proposed solution is flawed. While it may correct access problems with one drug or drug class, in turn, it may readily lead to reduced access to other drugs and drug classes and, ultimately, to overall reduced pharmacy access.”

NACDS, CPhA and CRA also expressed concerns about the capability of DHCS to adequately monitor access to pharmacy services to respond when access problems arise.

“Monitoring plans that DHCS has communicated to the public are limited to monitoring utilization data that is reported quarterly at best. We anticipate reduced access to occur quickly — for example, in rural areas where few providers are located or with certain specialty drugs that are not carried by many pharmacies. Delays by DHCS in responding to such access problems are unacceptable for patients with serious medical conditions,” the letter stated.

Last week, a federal judge blocked California state officials from moving forward with a 10% Medi-Cal reimbursement rate cut for pharmacies and other providers. The proposed amendment by DHCS, not related to that ruling, is yet an additional effort by the state to implement pharmacy reimbursement cuts. For that reason, pharmacy must remain vigilant in preventing harmful cuts that can impact patient access, according to the pharmacy groups.

“There is no substitute for the quality, accessible patient care provided by community pharmacy,” stated NACDS president and CEO Steve Anderson. “This proposed pharmacy reimbursement structure is not a remedy for the budget challenges in the Medi-Cal system. Community pharmacy provides unsurpassed value in improving patient health and reducing healthcare costs across the board. We urge CMS to prevent these cuts from being implemented to ensure fair and adequate access to community pharmacy.”

"The department should step away from flawed policies like this one," stated Bill Dombrowski, president and CEO of the California Retailers Association. "They only create barriers to care for millions of Californians. When they do, our coalition stands ready to work with them to put forth real cost saving measures that will score savings within the Medi-Cal program without the risk of harming patients."

“This most recent SPA is nothing more than an extension of the failed policies that have been proposed before,” added CPhA CEO Jon Roth. “We have approached the state with pharmacy benefit plan design changes that would permanently improve efficiency and reduce overall drug costs within the Medi-Cal program. Rather than saving money by encouraging the use of less expensive drugs, the state seems intent on these short-sighted plans that will force local community pharmacies out of business."

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