Pharmacy Lobbying Blitz Comes to D.C.

Posted April 26, 2005 at 6:44pm

Two major players in the pharmacy industry have come to Washington to fight over the future of prescription drug deals.

The Pharmaceutical Care Management Association, whose members negotiate prescription drug deals with pharmaceutical companies and insurance providers, will kick off a lobbying, public relations and advertising campaign today. The group’s efforts will counter recent attacks by the National Community Pharmacists Association, which is itself planning a lobbying fly-in next week to boost two pieces of legislation.

When the more than 400 independent pharmacists take to Capitol Hill next week, they have at least two legislative priorities that pit them against PCMA.

John Rector, the independent pharmacy group’s general counsel and senior vice president of government affairs, said his members will urge Congress to pass legislation including the Community Pharmacy Fairness Act and the Pharmacy Benefit Manager Transparency Act of 2005.

The bills, sponsored by Rep. Anthony Weiner (D-N.Y.), would, among other things, prohibit drug manufacturers from having a controlling interest in a pharmacy benefit management company, or PBM. And it would require PBMs, which are represented by PCMA, to disclose compensation they receive from pharmaceutical companies.

But PCMA is not taking the assault lying down.

“Our motto is, ‘Don’t let any charge go unanswered,’” said Mark Merritt, president and chief executive of PCMA, which represents companies like Caremark Inc. and Medco Health Solutions. “We very much believe that our members are doing a great job of making drugs less expensive than they otherwise would be. We protect consumers from the excessive markup from the retail stores and from the pharmaceutical companies.”

PBMs say such companies have brought down the price that consumers and their health insurers pay for prescription drugs. The clients of PBMs include health plans, unions and large employers. And the PBMs say such bills as the transparency legislation would give drug companies the upper hand in negotiations.

Merritt said the transparency act would “undercut our ability to negotiate discounts. They want public transparency of PBMs’ confidential information, which would undermine our ability to get deeper discounts from drug companies, and undermine our ability to get the drug companies to compete against each other. As we are negotiating, this is like making us play poker with our cards up.”

But Rector countered that the PBMs don’t want the transparency bill because it would reveal that the companies overcharge their customers for prescription drugs.

“If they had to disclose to their client that they’re doing that, they’re going to have a very unhappy client,” he said. “Our objective is to establish in everybody’s mind that you don’t need a PBM. In fact, they’re a negative in the equation and we’re under way to demonstrate that.”

Rector also said that community pharmacies would like to get into the business of filling multi-month prescriptions at a discount, but that PBM companies “limit the ability of the pharmacy to do only one month. … Then the PBM, which owns its own mail-order business, they turn around and market to the local pharmacies’ customer their three-month plan.”

“We’re going to give [community pharmacies] a helping hand,” Weiner said in a statement.

To counter the Community Pharmacists Association, PCMA is also releasing a 30-page report titled “How the Independent Pharmacy Lobby’s Agenda Undermines Competition, Hurts Consumers, and Increases Costs” at a press event today. PCMA also will have its own member pharmacists in town next month.

The independent drug store lobby “has predicated their legislative agenda on the premise that they need financial protection because they’re not making enough money, and they need politicians to rescue them,” Merritt said. The PCMA’s ads, for example, say independent pharmacy owners rank in the top 4 percent of U.S. wage earners. Those ads will hit papers next week.

The ads also say the independent pharmacy lobby is “seeking special-interest protections that would add hundreds of billions to the nation’s drug bill” to shield the companies from competition.

Merritt added that the two bills would help nothing “except the profit margins of independent pharmacies” and that their rivals “want to win back in the political arena what they lost in the marketplace.”

In addition to Merritt, PCMA relies on an in-house team including Missy Jenkins along with the Washington representatives of its member companies.

The NCPA, for its part, is handling the lobbying in-house and with its members, Rector said. As the issue heats up, though, he said, the group likely will tap outside lobbyists.

“In the past, we have worked with some of the lawyers at Patton Boggs,” he said. “But we’re not in that mode right now.”