Increasing TRICARE Mail order Pharmacy Incentives Alarms Community Pharmacies

An Obama administration proposal that affects drug co-pays in TRICARE has raised concerns from trade groups representing community pharmacies, which, in 2010, filled 40% of TRICARE prescriptions.

The National Association of Chain Drug Stores (NACDS) and National Community Pharmacists Association (NCPA) joined together to send letters to the U.S. Senate Armed Services Committee and the Joint Select Committee on Deficit Reduction, asking members to turn away a proposal that would charge TRICARE beneficiaries higher prices if they used community pharmacies instead of mail-order services.

That proposal calls for TRICARE beneficiaries to pay 30 percent of the cost of their medications at a retail pharmacy without capping annual cost sharing, with substantially lower out-of-pocket costs for mail-order prescriptions. It also would end incentives for drug manufacturers to offer additional price concessions to DoD beyond those required by law, because the TRICARE program would equalize cost sharing between preferred and nonpreferred medicines.

The TRICARE system already incentivizes use of mail-order pharmacies. Here are the costs as of last month compared to civilian community pharmacies:


Generic drug: 90-day supply: $ 0.00
Brand name drug : 90-day supply: $ 9.00
Non Formulary drug: 90-day supply: $ 25.00

Community Pharmacy:

Generic drug: 30-day supply: $ 5.00
Brand name drug: 30-day supply: $ 12.00
Non Formulary drug: 30-day supply: $ 25.00

There is still no cost for filling prescriptions at the local military treatment facility, although, non-formulary requests cannot be filled.

In the letters expressing concerns about even greater imbalances in payments, NACDS and NCPA urged that Congress instead support policy alternatives to increase generic drug utilizion instead of restricting access to pharmacists. The two groups pointed to studies that indicate that face-to-face interaction with community pharmacists saves twice the healthcare dollars as mail-order call centers.

“Rather than instituting changes that unfairly penalize beneficiaries and drive up prescription drug costs, we urge you to increase generic dispensing rates in both the TRICARE retail and mail-order settings,” NACDS President and Chief Executive Officer Steven C. Anderson, IOM, CAE and NCPA Chief Executive Officer B. Douglas Hoey, RPh, MBA wrote. “We feel strongly that a greater reliance on mail-order will not only fail to produce the needed savings, but will also compromise patient care, increase waste, and penalize those who wish to have their prescriptions filled at their local pharmacy.”

The groups maintain that generic drug use in TRICARE lags behind other healthcare programs. They also claim that $11 billion could be saved in the next decade through a program by which community pharmacists maximize the appropriate use of generics and pharmacy benefits manager are held accountable for generic drug dispensing rates, particularly at mail-order sites.

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