Drug War

The massive snowstorms are responsible for canceling most events in Washington this week, including a congressional hearing scheduled for Wednesday on a controversial piece of federal health care legislation.

The bill is a proposal to regulate the pharmacy benefit manager companies that negotiate the prices federal employees pay for prescription drugs in the Federal Employees Health Benefits Program. That hearing, rescheduled for Feb. 23, would have taken place as the pharmacy benefit manager for the two largest FEHBP plans, CVS Caremark, came under attack by a union coalition and under investigation by the Federal Trade Commission. CVS Caremark manages the prescription benefits for federal employees in the Blue Cross Blue Shield Basic and Standard options.

The Change to Win coalition of labor unions, which does not include any of the major federal employee unions, alleged in a recent report that Basic option enrollees pay more for most drugs than those who use a program CVS runs in its retail stores that is available for an annual $10 enrollment fee. And a group of Democratic and Republican lawmakers asked the Federal Trade Commission last year to look into whether CVS Caremark was steering customers to its pharmacies instead of those run by other companies, and encouraging them to switch to more costly drugs. FTC began its investigation in August.

Christine Cramer, director of public relations for CVS Caremark, dismissed the report as a political effort by Change to Win and defended the company's general business practices saying, "CVS Caremark has become one of the most successful PBMs by offering clients tremendous value and cost-effective services, and we are proud of our strong track record of success."

Health care benefits experts have come to the defense of pharmacy benefit managers in response. Walton Francis, author of the Consumers' Checkbook 2010 Guide to Health Plans for Federal Employees, wrote to the bill's sponsor, Rep. Stephen Lynch, D-Mass., on Tuesday to outline his opposition to the legislation. Francis said FEHBP's use of pharmacy benefit managers enabled the program to bargain with drug providers to get better prescription prices for federal workers, and provided useful pricing incentives to encourage employees to switch to generic drugs where available.

Francis also said the regulations Lynch is proposing, which include capping drug prices, requiring PBMs to return any cost savings to the government, and making companies disclose how drug prices are set, would unnecessarily hinder a market-based program that is working well.

"The proposed bill would require OPM to become an economic regulatory agency, with a scope of responsibilities for price controls and antitrust policy perhaps not seen in this country since World War II," Francis wrote in his letter to Lynch. "Even were such a program otherwise justified, its proper locus is not the FEHBP and the Office of Personnel Management is manifestly unqualified to administer it."

Fair Care

Before Washington's first blizzard hit, President Obama signed the 2009 Veterans' Emergency Care Fairness Act, which would make it easier for veterans to get the Veterans Affairs Department to pay for emergency medical coverage. Currently, in cases unrelated to military service, VA pays only for emergency care that veterans receive in a VA hospital. The bill, sponsored by Rep. Bob Filner, D-Calif., changes that. Now if veterans are in an accident or require other emergency treatment and can't get to a VA hospital, the department will pay the difference between what veterans' private health insurance covers, and the maximum cost VA is willing to pay for a service.

Veterans still will be responsible for the co-payments established by their private insurance companies, but the new law means they won't be stuck with catastrophically high bills simply because they weren't able to get to a specific hospital at a time when they required immediate treatment.

Filner said the bill would allow former service members to "focus on their recovery, instead of being overburdened with financial concerns."