Thank you for the really short time to comment on the FSIS Notice, FSIS Actions Concerning Suppliers

Fmi

Description

th655 15 Street, N.W. Washington, DC 20005-5701 Tel: [phone] Fax: [phone] E-mail: [e-mail] Web site: www.fmi.org November 25, 2002 Office of the Inspector General Department of Health and Human Services Attention: OIG-8-CPG Cohen Building 330 Independence Avenue, S.W. Washington, D.C. 20201 Re: Draft OIG Compliance Program Guidance for Pharmaceutical Manufacturers (File Code OIG-8-CPG) Dear Inspector General: The Food Marketing Institute (FMI) respectfully submits the following comments in response to the draft compliance document developed by the Department of Health and Human Services (HHS) Office of Inspector General (OIG) for the pharmaceutical manufacturing industry. 67 Fed. Reg. 62057 (Oct. 3, 2002). For your information, FMI is a non-profit association that conducts programs in research, education, industry relations and public affairs on behalf of its 2,300 members and their subsidiaries. Our membership includes food retailers and wholesalers, as well as their customers, in the United States and around the world. FMI’s domestic member companies operate approximately 26,000 retail food stores with a combined annual sales volume of $340 billion, which represents three-quarters of all grocery store sales in the United States. FMI’s retail members also operate close to 12,000 in-store pharmacy departments. We estimate that supermarket pharmacies account for nearly 14 percent of all ...

Informations

• Publié par: Orkoi
• Nombre de lectures: 13
• Langue: English

Extrait

November 25, 2002

655 15

th

Street, N.W.

Washington, DC 20005-5701

Tel: [phone]

Fax: [phone]

E-mail:

[e-mail]

Web site: www.fmi.org

Office of the Inspector General

Department of Health and Human Services

Attention: OIG-8-CPG

Cohen Building

330 Independence Avenue, S.W.

Washington, D.C. 20201

Re:

Draft OIG Compliance Program Guidance for Pharmaceutical

Manufacturers (File Code OIG-8-CPG)

Dear Inspector General:

The Food Marketing Institute (FMI) respectfully submits the following comments in

response to the draft compliance document developed by the Department of Health and

Human Services (HHS) Office of Inspector General (OIG) for the pharmaceutical

manufacturing industry. 67 Fed. Reg. 62057 (Oct. 3, 2002).

For your information, FMI is a non-profit association that conducts programs in research,

education, industry relations and public affairs on behalf of its 2,300 members and their

subsidiaries. Our membership includes food retailers and wholesalers, as well as their

customers, in the United States and around the world. FMI’s domestic member

companies operate approximately 26,000 retail food stores with a combined annual sales

volume of $340 billion, which represents three-quarters of all grocery store sales in the

United States.

FMI’s retail members also operate close to 12,000 in-store pharmacy departments. We

estimate that supermarket pharmacies account for nearly 14 percent of all outpatient

prescription drugs dispensed in the United States. Based on current industry trends

toward larger store formats and the convenience of one-stop shopping, we anticipate that

the number of pharmacies located in supermarkets will continue to increase in the coming

years, as will the number of prescriptions that are dispensed on an outpatient basis from

these community settings.

File Code OIG-8-CPG

November 25, 2002

Page 2

As a result of the growing importance of pharmacy in the supermarket industry and

because FMI members dispense prescriptions to a significant number of patients that are

covered under federal health care programs, such as Medicaid and the Federal Employee

Health Benefits Plan, FMI is extremely interested in this important OIG initiative. In

particular, we are encouraged by the fact that the OIG has recognized in its compliance

guidance document that kickbacks and other illegal remuneration are a major potential

risk area for pharmaceutical manufacturers. Moreover, we believe that, if left

unmonitored, activities such as these may result in higher costs for prescription drugs,

which would adversely impact the economic well-being of federal health care programs

generally. Therefore, FMI strongly supports and welcomes the compliance document,

which we hope will curtail certain types of incentives, payments and other financial

arrangements between pharmaceutical companies and pharmacy benefit managers

(PBMs).

Our industry’s position is that any remuneration, other than a price reduction covered by

the discount exception, potentially implicates the anti-kickback statute. Moreover,

arrangements that would result in overutilization, higher government program costs,

inappropriate steering of federal health care business or unfair competition should be

considered in violation of anti-kickback laws. Switching arrangements are also very

suspect, and FMI urges the OIG to direct pharmaceutical companies to carefully review

any program that directly or indirectly rewards a PBM for switching a patient from a

competitor’s product to their product, especially if the switch results in the patient

receiving a more expensive medication.

Financial compensation paid by a pharmaceutical company to a PBM so that a particular

drug is placed on the PBM’s formulary should also be considered a potential violation

under federal anti-kickback laws. While many of these arrangements may be permissible

in private sector managed care programs, it is our belief that pharmaceutical companies

need to review this type of activity carefully in connection with their products that are

being reimbursed by federal health care programs.

One of the overriding reasons why there is such a high degree of suspicion and scrutiny

by employer groups, state legislators and federal investigators with respect to business

relationships between pharmaceutical manufacturing companies and PBMs is the lack of

accountability, disclosure and transparency by the PBM industry. PBMs routinely refuse

to disclose their financial arrangements with drug companies and they do not wish to be

subjected to any kind of accountability, such as an annual audit. In fact, FMI finds it

unconscionable that the PBM industry – which serves in an administrative capacity for

various federal prescription drug programs – is not subject to periodic audits. Without

the accountability that would result from regulatory controls and the financial scrutiny of

an audit, it is not possible to know with any certainty whether PBMs are helping to

control drug costs for the federal government or if these middlemen are a primary

contributing factor to skyrocketing drug costs.

File Code OIG-8-CPG

November 25, 2002

Page 3

On this important point, FMI urges the OIG to go beyond the issuance of its compliance

guidance document and recommend measures to the Secretary of Health and Human

Services that would result in greater accountability on the part of the PBM industry in

relationship to all federal health care programs in which these entities administer a drug

benefit. We believe that taxpayers and beneficiaries deserve nothing less, and in this

connection, FMI strongly supports a complete accounting by the PBM industry of all

payments, rebates, discounts and other financial incentives that these entities receive

from pharmaceutical manufacturers.

In conclusion, FMI appreciates the opportunity to provide these comments to the OIG.

Sincerely,

Tim Hammonds

President and CEO

File Code OIG-8-CPG

November 25, 2002

Page 4