A bipartisan report from the Senate Aging Committee focuses on how to increase utilization of generic drugs to lower costs and specifically suggests expanded eligibility for medication therapy management (MTM) services, such as from community pharmacists.
The report reviews prior research that documents cost savings through MTM services. It also examines current MTM enrollment rates and requirements for eligibility and recommends action on both fronts.
“Given MTM’s potential to improve outcomes and lower costs, it is important that it reaches the full range of beneficiaries who would benefit from active medication management,” the report states. “Expanding eligibility criteria is one step, but [the Centers for Medicare & Medicaid Services] should also focus efforts to improve enrollment. For instance, developing outcomes-oriented metrics—such as a ratio for overall rate of participation as compared with total eligible beneficiaries—could help to ensure that the focus is on employing MTM services more broadly.”
MTM coverage should be broadened, the authors suggested, to encompass beneficiaries on lower-cost generic drugs that may not meet the minimum cost threshold for MTM eligibility.
While the report examines various barriers and potential new incentives to generic utilization, unfortunately it overlooks one challenge for community pharmacies: below-cost reimbursement for those generic drugs that surge in price.
Many community pharmacies incur losses of $60, $100 or more when they dispense certain generic drugs. That is hardly an incentive for more generic drug utilization!
The heart of the problem is that when costs increase virtually overnight, a pharmacy benefit manager (PBM) may wait a month or longer to update reimbursement, or maximum allowable cost (MAC), and rarely does so retroactively.
After hearing from NCPA, Medicare announced that fortunately it will require PBMs, starting in 2016, to update MACs every seven days. However, non-Medicare MACs will still require a solution.
To address this, Reps. Doug Collins (R-Ga.) and Dave Loebsack (D-Iowa) have introduced H.R. 5815. It would require more timely updates of MAC rates in Medicare, TRICARE and the Federal Employees Health Benefits Program. (Their prior legislation H.R. 4437 focused on Medicare only.)
NCPA will work with House and Senate lawmakers on both sides of the aisle in the 114th Congress to introduce and advance similar legislation in 2015.