CBO: Generics saved $33 billion for Medicare Part D in 2007
WASHINGTON Generic drugs saved Medicare Part D beneficiaries and the program as a whole $33 billion in 2007, according to a new report by the nonpartisan Congressional Budget Office. The CBO expected another $14 billion in annual savings to accrue as many new generics enter the market through 2012.
The main lobby for pharmacy benefit managers said the report also showed the advantages of pharmacy benefit managers.
“Tools pioneered by pharmacy benefit managers — including encouraging the use of generic medications — have lowered costs and expanded access to prescription drugs for seniors in Medicare Part D,” Pharmaceutical Care Management Association president and CEO Mark Merritt said.
The generic drug industry lobby hailed the report as well. “This new CBO study is just one of a continued body of evidence proving that generics are a key cost-saving component of our healthcare system,” a statement by the Generic Pharmaceutical Association read.
According to the market research firm IMS Health, generic drugs accounted for nearly 75% of prescriptions dispensed in the United States, but for just more than 19% of dollars spent.
Employer healthcare costs expected to rise in 2011
NEW YORK Against a backdrop of continued economic uncertainty, employer healthcare costs for active employees are projected to rise 8.2% after plan changes to an average annual cost of $10,730 in 2011, according to a recent survey of 466 large and midsize employers conducted by Towers Watson.
“Employees today are adjusting to historically lower-than-average merit pay increases, while at the same time facing higher healthcare contributions, co-pays and deductibles. Merit pay increases have gone up 16% while employee contributions have risen 49% over the last five years. This combination could adversely affect many employees and intensify the growing affordability crisis,” stated Ron Fontanetta, senior healthcare consultant with Towers Watson. “With employers also facing the challenge of steadily rising costs, plus the advent of healthcare reform, the need to rethink employer approaches to health care is greater than ever.”
According to survey respondents, 59% of employers planned to implement significant or moderate healthcare plan design changes in 2011, and two-thirds (67%) planned to do so in 2012.
“In light of the complexities around all of the regulatory guidelines and mandates, most employers are taking the time to understand the new legal environment before making too many long-term changes to their health benefit strategy,” said Randall Abbott, a senior healthcare consultant with Towers Watson. “Nonetheless, the earlier employers consider the strategic ramifications of the law and can act, the better they can assess their future role as healthcare benefit sponsors, and understand the implications on their business and employees.”
Many employers today, however, are not staying the course:
• By 2012, 64% of employers are projected to offer an account-based health plan — such as combining a high-deductible health plan with an employee-directed healthcare account, such as a health reimbursement arrangement health savings account — and 39% of employers are projected to have ABHP enrollment of more than 20%;
• As many as 62% of employers are projected to apply outcome-based incentives by 2012, shifting from incentives for employee participation in wellness programs to incentives for improvements in health metrics, for example. “Healthcare reform has reinforced employers’ commitment to wellness [health-management] programs,” Fontanetta said. “Employers today understand that one of the keys to controlling long-term healthcare costs is to provide employees with the tools to personalize and manage their health. They are also offering incentives to encourage employees to maintain their well-being and access to clinical support and advice”; and
• According to the survey, 86% of U.S. employers plan to increase efforts to encourage employees to engage in wellness/health promotion programs, with 65% already increasing or planning to increase incentives for these programs, and another 17% considering this action for 2012. Among specific health promotion programs, employers plan to increase efforts to encourage employees to engage in behavioral health programs (78%), biometric screenings (74%), health risk assessments (71%) and disease management programs (67%).
NACDS cautions Congress on expanding Medicare’s DME bidding program
ALEXANDRIA, Va. The National Association of Chain Drug Stores on Wednesday issued a statement to the House of Representatives’ Committee on Energy and Commerce Subcommittee on Health, which held a hearing earlier in the morning on the implications for quality, cost and access to Medicare’s competitive bidding program for durable medical equipment.
NACDS recommended to the subcommittee that the Centers for Medicare and Medicaid Services delay expansion of the competitive bidding program until the impact of the program on Medicare beneficiaries’ access to healthcare services and supplies is fully analyzed. In particular, NACDS urged caution in expanding the program to include retail pharmacies and diabetic testing supplies.
“To ensure that community pharmacists continue to play a role in providing quality healthcare services and decreasing medical costs, it is vital that Medicare beneficiaries have continued access to medications and supplies through community retail pharmacies,” NACDS stated. “Pharmacists play a key role in ensuring patients use their supplies in the most proper and meaningful way. Including retail pharmacies in the competitive bidding program will limit the number of options available to beneficiaries. … Beneficiaries should have the continued ability to obtain their medical supplies from pharmacies with which they have a long-standing relationship,” the statement read.
In related news, the National Community Pharmacists Association, the lobbying group which represents the nation’s independent pharmacies, offered three legislative recommendations to the House subcommittee, which included the passage of H.R. 5235 — the Medicare Access to Diabetes Supplies Act — which would preserve seniors’ access to diabetes supplies at community pharmacies by exempting such businesses from the first round of the competitive bidding program. NCPA also added that:
- Congress must introduce and pass legislation that exempts community pharmacies from any pricing resulting from competitive bidding. Otherwise, pharmacies might be forced to ”terminate sales of diabetes testing supplies and hinder beneficiary access if the prices established under such a program are applied to the community pharmacy market” in the future; and
- In enacting legislation to address the points above, Congress also should clarify the ability of community pharmacists to deliver these products to homebound seniors and, on a temporary basis, to “snow bird” seniors who spend colder months in warmer climates. CMS’ proposed present definition in this instance of “mail order” as “any item…shipped or delivered to the beneficiaries’ home regardless of the method of delivery,” would block community pharmacies from providing these patient services.
NCPA noted that it has constructively worked with CMS ever since the CBP program was announced and that such efforts will continue.