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White House: Streamline prescription drug contracting

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The White House has also tucked a proposal into its $3 trillion deficit reduction proposal to overhaul how the government buys prescription drugs for the Federal Employees Health Benefits Program. On page 43 of its report, the administration calls for allowing the Office of Personnel Management to contract directly with pharmacy benefit managers, or PBMs, for prescription drugs. PBMs are companies that negotiate prescription drug prices with pharmaceutical companies on behalf of FEHBP’s insurance providers. But PBMs are not considered subcontractors, and as a result, OPM has little oversight of them and cannot be sure they pass on rebates (of as much as 50 percent of the drugs’ retail cost) to FEHBP enrollees.

The White House says the current “fragmented strategy [using PBMs] does not take full advantage of the combined purchasing power of the nearly eight million enrollees in the FEHB program.” It projects the move would save $1.6 billion over a decade.

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  1. Ira Erenberg, PharmD Says:
    September 19th, 2011 at 7:33 pm

    Why not look at all activities of PBMs, especially with regard to Medicare PartD. Their motive is to take over ALL pharmacy activity in the USA by requiring all patients go mail-order thereby putting thousands of pharmacies and employees out of business. If that comes to pass, try negotiating with the only game in town for thes bargain.

  2. Teresa Stickler Says:
    September 20th, 2011 at 12:05 am

    I am a pharmacist. You should cut out the PBM’s because they are hiding a lot of money that makes them the big power houses that they are with creating their own rules. Everyone will save lots of money. Scrutinize mail order also, because that is another revenue stream they are ripping everyone off on. Do a trial with independent retail pharmacies and you will see the savings. Some generic drugs are being charged $100 extra for the same drugs through mail-order.

  3. Mike Kovack Says:
    September 23rd, 2011 at 10:37 pm

    If memory serves me correctly, when it was made public that certain PBM’s were caught overcharging Medicare recipients vs what was actually being reimbursed to the pharmacies, I believe that the FEP did their own audits and reproted that they were overcharged some exorbinant amount as well. Now if this is happening and you have the testicular fortitude to fleece the Federal Government do we need to go further as to what is happening to the rest of the public that have gone to these same entities to help control the costs of healthcare???