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ACP-ASIM Pressroom

Internists Urge Congress to Enact Medicare Prescription Drug Benefit With Consumer Protections on Role of Pharmacy Benefit Managers

PBMs should not be allowed to limit access to beneficial drugs based solely on costs

May 9, 2000

(Washington, DC): Congress must ensure that consumer protections are included in legislation creating a prescription drug benefit for Medicare, particularly if the benefit is to be restricted by a formulary administered by pharmacy benefit managers (PBMs), according to a statement released by the American College of Physicians-American Society of Internal Medicine (ACP-ASIM). Internists urge Congress to assure that patients' access to beneficial drugs is not hindered by restrictive formularies—or other managed care controls—that are imposed by PBMs solely to reduce costs, without regard to safety, effectiveness, or ease of administration.

Several bills pending in Congress would give PBMs the authority to determine which drugs would be available to patients under a Medicare prescription drug benefit. PBMs are private companies that contract with health plans to limit the costs of prescription drugs. Formularies— lists of approved drugs that physicians are permitted to prescribe—are typically used by PBMs to limit access to expensive drugs. If drugs are prescribed that are not listed in the formulary, patients may be penalized with higher out-of-pocket costs (increased copayments or deductibles). PBMs also monitor the number and types of drugs that physicians prescribe to their patients. Physicians who prescribe more costly drugs may be pressured to give their patients less expensive—but potentially less effective alternatives.

"Internists know that the lack of prescription drug coverage can significantly reduce patient compliance with prescribed drug therapies," said ACP-ASIM President Sandra Adamson Fryhofer, MD, FACP.

The College, whose members provide medical care for our nation's adult population, including Medicare beneficiaries, is in a unique position to evaluate the need for and the appropriate structure of any proposed Medicare prescription drug benefit.

"As private companies, PBMs can exert a great deal of influence over which drugs will be available to Medicare patients without any accountability to the public for their decisions," Fryhofer said. "Patients with serious illnesses requiring more costly medications may be particularly at risk if PBMs are allowed to restrict coverage to only the cheapest drugs. A prescription drug benefit will be a hollow promise to beneficiaries if it allows private managed care companies to deny them access to beneficial drugs principally on the basis of cost."

PBMs need to consult with doctors on the drugs that are included in a formulary, according to Fryhofer. "They need to consider safety, ease of administration, and effectiveness—not just cost. They need to inform patients about what the impact will be on their out-of-pocket costs if they need a drug that is not on the formulary. And physicians should be able to prescribe beneficial "off formulary" drugs to their patients—when supported by clinical evidence on effectiveness—without cumbersome prior authorization requirements."

ACP-ASIM principles for consumer protection in Medicare prescription drug legislation include:

  • If a formulary is instituted by a PBM, decisions on which drugs should be included and evaluation of physician prescribing patterns should be based on effectiveness, safety, and ease of administration, rather than just costs. Formularies should be approved on a regional basis by a professionally qualified body that includes practicing physicians using that formulary;
  • Physicians should have the option of prescribing drugs that are not on the formulary (based on objective data to support a justifiable, medically indicated cause) without cumbersome prior authorization requirements;
  • Beneficiaries should have access to comprehensive, accurate and understandable educational and informational material about their prescription drug benefits;
  • Beneficiaries and their physicians should be promptly notified (at least ninety days notice) when formularies are changed or discontinued; and
  • Any request by a benefit manager to alter medication regimes should occur only when such requests are based on objective data supported by peer-reviewed medical literature.

ACP-ASIM is the nation's largest medical specialty organization and the second largest physician group. Membership comprises more than 115,000 internal medicine physicians and medical students. Internists are the major providers of medical care to adults in America.

Jack E. Pope, ACP-ASIM Washington Office, (202) 261-4556

Page updated: 11-03-03

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