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Pharmacy Benefit Managers Take to Political Airwaves

On the cusp of Saturday’s GOP primary in Nevada, the trade association for pharmacy benefit managers has begun airing ads in the state trying to tout themselves to the candidates, their operatives and the reporters covering them.

The Pharmaceutical Care Management Association has been running the ads inside the Beltway for more than a week, but Nevada is just the beginning of the group’s effort to run its message in important venues.

“We’re looking to states where there’s going to be significant political attention — swing states, presidential primary states, swing markets within those states,” said Mark Merritt, the PCMA’s president and CEO. It is a strategy several other groups are also deploying during the heated Republican presidential campaign, getting on the airwaves between other political ads to raise awareness of their issues.

The ad buy comes at a pivotal time for the pharmacy benefit industry. Merritt says pharmacy benefit management companies, which negotiate prescription drug prices and administer prescription drug plans, are pushing their programs to lawmakers as ways of saving money in Medicare and Medicaid. The industry’s drugstore rivals are fighting a proposed merger between two PBMs, Medco and Express Scripts, and are calling for legislation that would compel the industry to disclose more about its business.

Dozens of Members of Congress have expressed jitters over the merger.

Sen. Herb Kohl (D-Wis.), who chairs the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, wrote today to the Federal Trade Commission to note “serious competition concerns.”

The letter also outlined concerns about the merged company’s dominance in mail-order prescriptions and its effect on drugstores. Patients rely on pharmacies for advice and to treat acute illnesses when they cannot wait for a prescription to arrive by mail.

Kohl said the merger could pose antitrust issues if it “would in fact imperil the ability of these pharmacies to remain in business.”

Pharmacy lobbyists cheered the letter and said it’s another reason PBMs are on the hot seat.

“We see their ad campaign as defensive,” said John Coster, the senior vice president of government affairs for the National Community Pharmacists Association. “They’ve been trashed by so many Members of Congress and consumer groups.”

But Merritt called the PCMA’s ad campaign part of a forward-looking effort that his industry is engaging in, and he pointed out that the PCMA is not taking a position on the proposed merger.

“It really is an ongoing proactive campaign for us to offer policy solutions for when people are ready to embark on them,” Merritt said. “We’re one of the only trades that sent solutions up to the super committee this summer about how you can save billions of dollars.”

The ad campaign, titled “That’s What PBMs Do,” poses the question: “Who Lowers Pharmacy Costs for America’s Workers?” One ad replies, “Pharmacy Benefit Managers will save unions and employers nearly $1 trillion over the next decade.”

Merritt said PBMs, which already participate in such government programs as TriCare and Medicare Part D, are looking at additional ways of helping Uncle Sam lower its prescription drug bills.

“Special interests, drugstore lobbyists,” he said, are standing in the way by “protecting an industry group from competition instead of getting the real goal accomplished — saving billions for consumers and improving quality of care.”

Merritt added that states such as New York and New Jersey already are working to implement PBM programs to save tax dollars, and he said similar programs at the federal level could move quickly, especially after the November elections.

“The pharmacy world has been turned on its head in the last decade,” he said.

But Coster said PBMs’ perspective is upside down.

“They think we help them. In fact, we’re the providers. We’re the ones that provide patient care,” said Coster, whose group is pushing for legislation that would force PBMs to disclose more information about their business and profits, particularly when administering government programs.

“The government doesn’t know a lot about what these PBMs are doing, how much money they’re taking in,” he said. “The proposed merger has really sensitized folks on the Hill. The onion of the PBM has been slowly peeling away, and what’s inside is rotten.”

Chris Krese, a spokesman for the National Association of Chain Drug Stores, said his group not only has come out against the merger, including operating a website called, but like Coster’s group also is lobbying for legislation that would regulate PBMs.

“The volume is very, very high and very, very passionate” in opposition to the merger, Krese said. “We believe legislation to regulate PBMs is very important for the advancement of good patient care.”

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