Pharmacy Benefit Managers and Medicare Beneficiary Access to Prescription Drugs
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0092-8615/2001 Copyright 0 2001 Drug Information Association Inc.
PHARMACY BENEFIT MANAGERS AND MEDICARE BENEFICIARY ACCESS TO PRESCRIPTION DRUGS JOSHUACOHEN,PHD Senior Research Fellow
JENNIFER CHEE,BA Research Assistant Tufts Center for the Study of Drug Development, Boston, Massachusetts
Despite the fact that prescription drugs are an increasingly important component of modern health care, especially f o r the elderly and disabled populations suffering from chronic conditions, 35% of Medicare beneficiaries lack any form of prescription drug insurance. Congress is currently debating six major proposals to extend insurance protection to outpatient prescription drugs under Medicare. Five of these proposals suggest the use of pharmacy benefit managers ( P B M s ) to improve the cost-effectiveness of the prescription drug benefit. A Tufts Center for the Study of Drug Development (Tufts CSDD) survey of eight leading PBMs shows that during the last five years PBMs have increased their enrollment of Medicare beneficiaries considerably. PBMs currently facilitate moderate to full access to pharmaceuticals for approximately 20% of Medicare beneficiaries. Seven of the eight PBMs surveyed are also developing disease management programs targeted specifically at the Medicare population. However. regarding the feasibility of a universal prescription drug benefit, a number of issues concerning how to structure government contracts with PBMs and how to meet certain political challenges to PBM mediation remain unresolved. Key Words: Medicare; Pharmacy benefit manager; Prescription drug benefit; Access to prescription drugs; Risk contract
BACKGROUND PRESCRIPTION DRUGS PLAY an increasingly important role in the provision of health care. For example, ulcers that once required relatively expensive surgery and hospitalization are treatable using relatively inexpensive
Presented at the DIA’s 36th Annual Meeting June 1115, 2000, San Diego. California. The session in which this paper was presented was entitled “Pharmacy benefit managers and the Medicare prescription drug benefit.” The first author of this paper, Joshua Cohen, chaired this session. Reprint address: Joshua Cohen, Senior Research Fellow, Tufts Center for the Study of Drug Development, 192 South Street, Suite 550, Boston. MA 021 11.
outpatient drug therapies (1). Recent innovations in pharmaceuticals have led to improvements in health outcomes for persons living with chronic conditions such as heart disease, hypertension, diabetes, asthma, and arthritis-frequent ailments of the Medicare population. The Medicare population, which includes the elderly, the disabled, and patients with end-stage renal disease, is particularly vulnerable to the high cost of prescription drugs, which are not a covered benefit under the current Medicare program. Not only do Medicare beneficiaries use more prescription drugs than the rest of the population (2,3), often as cash-paying individuals without pre-
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