May 20, 2002
WASHINGTON, DC – May 20, 2002 – Seniors would have fewer choices, pay more for their prescription drugs and receive inferior care if a proposal expected from House Ways & Means Chairman Bill Thomas and House Energy & Commerce Chairman Billy Tauzin becomes law, the Food Marketing Institute (FMI) said in a letter issued today to both chairman and to key Republicans in Congress.

FMI’s greatest concern is the proposal to use so-called Prescription Benefits Managers (PBMs), which would act similar to Health Maintenance Organizations (HMOs). Many PBMs are closely aligned with pharmaceutical manufacturers to generate higher profits for the manufacturers. This will drive seniors to higher-priced, brand-name drugs even when less-expensive, but just as effective, generic drugs are available, said FMI Senior Vice President for Government and Public Affairs John J. Motley III.

“FMI cannot support any proposal that would grant broad authority to prescription drug plan sponsors (PBMs), which we believe would allow them to establish restrictive pharmacy networks, preferred formularies, mail-order services and reimbursement rates that could restrict the choice of Medicare recipients or undermine the future viability of community pharmacies,” Motley wrote.

PBMs also are likely to use restrictive HMO-like networks – including mail-order – and charge seniors higher prices for using pharmacies outside those networks.

This proposal would also hurt seniors by reducing or eliminating their ability to receive advice from highly trained pharmacists they have grown to trust in their neighborhood pharmacies. FMI’s supermarket industry members operate more than 12,000 in-store pharmacies nationwide.

Furthermore, it would threaten the viability of community pharmacies, especially in rural areas, with inadequate reimbursement rates that could force many community pharmacies out of business, further restricting seniors’ choices.

“Additionally, FMI cannot support a bill that would include language giving HHS the authority to proceed with a drug discount card scheme unless such a proposal contains specific legislative provisions that would establish fair and reasonable reimbursement rates for participating pharmacies,” Motley wrote. “Most importantly, our industry cannot support a bill that fails to provide seniors with a comprehensive pharmacy benefit.”

“In summary, FMI must oppose this legislation at this time unless it is revised to address freedom of choice for seniors and the concerns of community pharmacies,” Motley concluded.