Assembly Bill 5502-B would raise cost of many prescriptions in NY by 10%

Pharmaceutical Care Management AssociationDec 2 2011

Assembly Bill 5502-B—transmitted to Governor Andrew Cuomo yesterday—would needlessly raise the cost of many prescriptions in New York by 10 percent, according to the Pharmaceutical Care Management Association. If enacted, the Bill would prohibit consumers from getting discounted prescriptions through mail-service pharmacies.

The Federal Trade Commission warns that AB 5502-B will "harm consumers" and "raise prices for, and reduce access to, prescription drugs." And in an editorial, The New York Times says the bill looks like "a favor to retail drug lobbyists that could actually drive up costs for consumers."

"It's wrong for the drugstore lobby to ask Governor Cuomo to sign a bill that enriches them by making businesses and consumers pay more for prescription drugs. Governor Cuomo should veto this bill because employers need every cost saving tool they can get in this economy and mail-service pharmacy is at the top of the list," said PCMA President and CEO Mark Merritt.

Even a lead lobbyist for the bill, Craig Burridge, admits that it could raise costs, telling the New York Times that "drug plans negotiated by labor unions would be exempt from the law if the unions required members to use mail-order pharmacies as a way of saving money."

Mail-service pharmacies offer 90-day prescriptions that are less expensive and more convenient than driving to the drugstore every 30 days. With mail-service pharmacies, patients can get private counseling over the phone from trained pharmacists seven days a week, 24 hours a day. Numerous government and peer-reviewed data have confirmed the increased savings, safety, and adherence provided by mail-service pharmacies, including:

The Journal of General Internal Medicine: In a report released last month, the Journal of General Internal Medicine found that patients receiving their prescription medications through a mail-service pharmacy achieved better cholesterol control compared to those who obtained their statin prescriptions from their local pharmacy.

The Federal Trade Commission (FTC): The FTC concluded in a 2005 report that PBM-owned mail-order pharmacies offer lower prices on prescription drugs than retail pharmacies and are very effective at capitalizing on opportunities to dispense generic medications.

U.S. Government Accountability Office (GAO): In January 2003, the GAO examined the value provided by PBMs participating in the federal employees' health plan. For prescription drugs dispensed through mail-order pharmacies, the average mail-order price was about 27 percent below the average cash-price paid by consumers for a brand name at a retail pharmacy and 53 percent below the average cash-price paid for generic drugs.

Pharmacotherapy: Peer-reviewed data found that highly automated mail-service pharmacies dispensed prescriptions with 23 times greater accuracy than retail pharmacies. The mail-service error rate was zero in several of the most critical areas, including dispensing the correct drug, dosage, and dosage form.

American Journal of Managed Care: Consumers receiving their prescription medications for chronic conditions through a mail-service pharmacy "were more likely to take them as prescribed by their doctors than did patients who obtained them from a local pharmacy."