CCAGW Opposes S. 867 | Council For Citizens Against Government Waste

CCAGW Opposes S. 867

Letters to Officials

July 29, 2013            
U.S. Senate
Washington, D.C. 20510

 

Dear Sens. Pryor, Boozman, Cochran, Johnson, Moran, and Wicker:  

On behalf of more than one million members and supporters of the Council for Citizens Against Government Waste (CCAGW), I am writing to express our opposition to S. 867, the Medicare Prescription Drug Program Integrity and Transparency Act.

Similar to H.R. 4215, which was introduced last year during the 112th Congress, S. 867 proposes statutory changes that will lead to increased drug prices for consumers by interfering with private contract negotiations among pharmacies, drug manufacturers, and pharmacy benefit managers (PBMs).  The legislation will require the federal government to establish generic drug reimbursement rates rather than the private market, while PBMs will be required to disclose proprietary pricing information with no safeguards to ensure the confidentiality of this proprietary data.  In addition, the legislation will prohibit the use of financial incentives that have been proven to promote more cost-effective services.

S. 867 also restricts audits, a key tool in minimizing improper payments, fraud, and other errors.  It would limit PBM audits of pharmacies from going back further than two years, cutting off the information needed to build a case against system abuses.  This provision ignores the current Medicare standard of 10 years that conforms to the statute of limitations for discovery under the False Claims Act.  The legislation further increases the potential for fraud by requiring payments submitted with “clerical” errors to be processed, such as missing prescriber IDs and date/time stamps that are important indicators of fraud and abuse.

The Medicare Prescription Drug Program Integrity and Transparency Act reduces rather than increases transparency and impedes common auditing procedures.  This legislation will place significant burdens on PBMs and consumers, and the bill’s enactment will result in higher prices, more transaction errors, and less consumer choice.  All votes on S. 867 will be among those considered in CCAGW’s 2013 Congressional Ratings.

Sincerely,

Tom Schatz

President, CCAGW

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