The National Medicare Prescription Drug Congress: The Drug Manufacturers’ Perspective

24 May

Business peopleThe rest of the second day, conference topics shifted from government perspectives to the effect of the MMA on various private stakeholders. Representatives from pharmaceutical manufacturers, health insurance plans, PBMs, large purchasers of health care, health care providers, and pharmacists talked about how the bill would change their respective practices and the challenges that all of them would face with respect to the MMA.

Fred Hassan of Schering-Plough touted the MMA as an accomplishment that will bring many opportunities and challenges to the pharmaceutical industry. He is encouraged by three major points of the legislation:
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  • The MMA will bring cost savings and discounts via cost-sharing mechanisms to millions of Americans.
  • It will cap catastrophic expenditures for senior citizens.
  • The MMA will shore up retiree programs, which have been decreasing over the past decade.

Mr. Hassan thinks that the legislation is not a government handout to the pharmaceutical industry; instead, it will create a “challenging purchasing environment” that will be difficult for manufacturers but that will provide much needed medications and integration of care for America’s senior citizens. The provisions on preventive care will improve the health of the elderly and will reduce expenditures.

He proposed that a National Charitable Medicine Foundation be established to streamline pharmaceutical manufacturers’ assistance programs. This foundation would provide one entry and one eligibility clearinghouse for all manufacturer-sponsored patient assistance programs. This would be an independent entity that would simplify the arduous process of applying for free medications from manufacturers and would encourage generic drug manufacturers to become involved to help in the cause as well.
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He also advocated the establishment of a consortium of insurance companies to create a secondary insurance market of small coverage groups (similar to that of “Fannie Mae” in the mortgage industry), which would pool demographically diverse groups just as large employers can. This type of health insurance would allow greater coverage, access, and afford-ability to many of America’s uninsured citizens.

The PBM Perspective

Barrett Toan of Express Scripts, speaking for the PBM sector, proposed that PBMs would have to assume risks for utilization and management of medications but that cost savings negotiated between drug manufacturers and PBMs would result in more competitive pricing, thus leading to less expensive medications for older people. He advocated the use of mail-order pharmacies, formularies, substitution of generic drugs, and prior authorization as the way to achieve these savings, which would allow patients to receive meaningful discounts.

He suggested that the expanding role of PBMs through the MMA would lead to fewer employer liabilities because more employer groups would not have to cover as many medications for their senior and retired workers. Instead, the government would pay for a large part of these expenditures.


The utilization of prescription drugs will almost certainly increase as a result of the MMA. Consequently, many stakeholders—primarily government, industry, the senior population, and health professionals—will be affected. The congress covered many of these perspectives, but only a few could be mentioned in this article. Nevertheless, one thing is certain: the MMA legislation will affect all segments of health care in the U.S.

As many of the speakers at this meeting agreed, the impact of the legislation seems to be pointing us in the right direction, but the effects of this legislation are still unclear at this early stage. The scope of the MMA encompasses more than just an attempt to contain double-digit growth of health care expenditures. It takes a step in the right direction by offering patients preventive care; a continuum of care; and, most important, the option of prescription drug coverage. For these reasons alone, the MMA may prove to be worthwhile.