Independent Drugstore Lobby Wants Sweeping Antitrust Exemptions to Charge Higher Prescription Drug Prices

  Independent Drugstore Lobby Wants Sweeping Antitrust Exemptions to Charge
                       Higher Prescription Drug Prices

PR Newswire

WASHINGTON, March 15, 2013

GAO Report: PSAOs Effective Negotiator for Independent Drugstores

WASHINGTON, March 15, 2013 /PRNewswire-USNewswire/ --The independent
drugstore lobby is again seeking special antitrust exemptions (HR 1188) that
would empower independent drugstores to charge consumers, employers, unions,
and government agencies higher prescription drug prices, the Pharmaceutical
Care Management Association (PCMA) said today.

A recent Government Accountability Office (GAO) report found that nearly 80
percent of independent drugstores already hire powerful Pharmacy Service
Administrative Organizations (PSAOs) to negotiate their contract terms,
negating any need for sweeping changes to antitrust laws.

"Prescription drug prices for employers, unions, government agencies, and
consumers will skyrocket if competing independent drugstores are given a
license to collude," said PCMA President and CEO Mark Merritt. "Prospects for
this bill won't be helped by the GAO's recent finding that independent
drugstores already hire large and powerful PSAOs to collectively bargain for
higher payments."

According to the GAO report:

  oThree of the five largest PSAOs are run by the country's largest
    wholesalers, AmerisourceBergen Corp., Cardinal Health Inc., and McKesson.
  oPSAOs routinely provide contract negotiation and are authorized to
    negotiate and enter into contracts with PBMs and third-party payers. The
    contract provisions that PSAOs negotiate include reimbursement rates,
    payment terms and audits of pharmacies.
  oPSAOs provide drugstores with a range of services, such as payment
    reconciliation and back-office functions, to improve the efficiency of
    their businesses.
  oRural drugstores can more effectively negotiate contract terms than a
    drugstore operating in an urban area with many competitors.

CBO: Collective Bargaining Would Increase Costs to the Federal Government

  oThe Congressional Budget Office (CBO) has found that special antitrust
    protections for independent pharmacists would increase costs to the
    federal government and that increased drug costs to private health plans,
    employers, and consumers would result in "reductions in the scope or
    generosity of health insurance benefits, such as increased deductibles or
    higher copayments." CBO's analysis also contends that cost increases
    would be passed along to workers, reducing "both their taxable
    compensation and other fringe benefits."

FTC: Collective Bargaining a "Costly Step Backward"

  oDuring testimony before the House Judiciary Committee Antitrust Task
    Force, the Federal Trade Commission (FTC) called pharmacy antitrust
    exemptions a "costly step backward" noting that such exemptions "would
    allow pharmacies to engage in collective bargaining to secure higher fees"
    and would "increase costs to private employers who provide health care
    insurance… without any assurance of higher quality care."

CRA Study: H.R. 1946 Would Increase Costs by Up to $15.6 billion

  oSimilar legislation introduced in the last Congress (HR 1946) would raise
    prescription drug costs for payers and consumers by up to $15.6 billion,
    according to research conducted by Charles Rivers Associates (CRA).

PCMA represents the nation's pharmacy benefit managers (PBMs), which improve
affordability and quality of care through the use of electronic prescribing
(e-prescribing), generic alternatives, mail-service pharmacies, and other
innovative tools for 215 million Americans.

Follow PCMA on Twitter

SOURCE Pharmaceutical Care Management Association

Contact: Charles Cote, +1-202-207-3605 , Greg Lopes, +1-202-207-3614
 
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