Frequently Asked Questions Below is a list of your most frequently asked questions.

Q: What is the Coalition for Quality Healthcare? A: The Coalition for Quality Healthcare was formed to help reduce healthcare costs in Michigan while upholding high standards of personal service, assuring full access to consumer options and preserving the contributions of local healthcare delivery to the state’s economy. A not-for-profit, 501(c)6 organization, the Coalition is comprised of individual and chain pharmacies and others who are interested in protecting quality healthcare, consumer rights and Michigan’s economy.

Q: What does the Coalition hope to accomplish? A: Michigan needs a much more competitive marketplace for prescription drugs. Community pharmacies need to be allowed to receive the same deep discounts for prescription drugs that only mail-order companies receive today. The result would give Michigan employers and employees significant cost savings without jeopardizing quality healthcare.

Q: But critics of HB 4987 claim the bill would cost Michigan employers as much as $70 million. A: The wording of the bill was admittedly not as clear as it should be. The bill’s author, Rep. Gary Newell, listened to what people said, and is revising the legislation so that it matches his intent: for every business dispensing prescription drugs in Michigan to play by the same rules, and to give employers the same health plan savings. Rep. Newell wants Michigan’s consumers to be able to receive the same low prescription drug prices from their local pharmacy that they currently can obtain only through mail-order. Those low prices must be expense-neutral to employers. If mail-order can save businesses “X” dollars, Michigan-based pharmacies will be allowed to provide the same savings.

Q: What is a “pharmacy benefit manager,” or “PBM?” A: A “pharmacy benefit manager,” or “PBM,” is a large company that administers prescription benefit programs for HMOs, employers, unions, preferred provider organizations and other health plans. PBMs also develop drug “formularies,” lists of medicines that PBMs use to manage drug spending. By charging less for certain brands of drugs, PBM formularies steer healthcare consumers and their physicians into using particular drugs for particular therapeutic needs. The consumer pays a higher co-pay (and the health plan pays the PBM more) for drugs that are not in the “preferred” category on the PBM’s formulary. The health plan may provide no coverage for drugs that are not on the list.

Q: How do PBMs make money? A: PBMs make money in three ways: 1) Administering the prescription benefit portion of health plans, including processing and paying the claims of plan participants 2) Profits from the prescription drugs that their mail-order divisions sell 3) Rebates from drug manufacturers

Q: What’s wrong with the way PBMs currently operate? A: Several aspects of the current PBM system need fixing: 1) PBMs are allowed to steer business to their own mail-order divisions, preventing local pharmacies from filling certain prescriptions 2) PBMs are not regulated by either the federal government or by the state of Michigan. In fact, only four states – Georgia, Hawaii, Maine and Missouri – have any sort of PBM regulation 3) PBM financial disclosure practices do not reveal the true amount of rebates and discounts that PBMs receive from drug manufacturers. One consequence is that PBMs are able to pocket most of these special deals, rather than pass them back to the health plan sponsor where they belong

Q: Why should consumers care about mandatory mail-order prescriptions? A: Mandatory mail-order rules affect consumers in several serious ways: • Healthcare quality suffers. Community pharmacists are the most accessible healthcare professionals. If we are not allowed to counsel you on how to properly take medications or monitor other medications for possible interactions – including over-the-counter drugs and herbal remedies – lives could be in jeopardy. • Consumer choice is trampled. Mandatory mail order not only eliminates consumer choice, it also kills off the competition. Instead of being able to shop at 2,000 community pharmacies in Michigan, consumers are given only one option – an out-of-state mail order facility. • The Michigan economy will be weakened. Hundreds of Michigan community pharmacies could be forced to close, costing the state jobs and lost tax revenues.

Q: Won’t forcing PBMs to give local pharmacies the same financial terms they give their own mail-order units raise healthcare expenses for businesses? A: Absolutely not. If local pharmacies and mail-order companies are allowed to play by the same rules, local pharmacies can match mail-order prices.

Q: Filling prescriptions by mail order seems like a great idea. Why are local pharmacies against it? A: Local pharmacies are not opposed to consumers using mail order to fill prescriptions if they want to. What we are opposed to is forcing consumers to use mail-order, even if they are not able to. We believe mandatory mail-order is bad for healthcare, bad for consumer rights and bad for Michigan’s economy.

Q: Instead of complaining about the special deals that mail-order companies make with PBMs, why don’t local pharmacies make their own deals with the PBMs? A: Local pharmacies have their hands tied by the PBMs. It’s not that local pharmacies can’t fill 90-day prescriptions for one co-pay just as economically as PBM mail-order units do – the PBMs won’t allow them to.

Q: If pharmacies could fill 90-day prescriptions for just one co-pay, would businesses save just as much as through mail order? A: Absolutely. If PBMs give local pharmacies the same discounts and terms they give their mail-order divisions, we can fill 90-day prescriptions for the same co-pay as mail order, just as economically.

Q: Can’t I just tell my pharmacist which maintenance drugs I receive through mail order, so that he/she is aware of possible drug interaction or overlap problems? A: Yes you could, as long as you’re able to give your local pharmacist 1) An accurate list of all your medications and their dosage information, and 2) Give him or her updates on that list every time your doctor adds, deletes or changes a prescription

Q: What else is sacrificed when drugs are ordered by mail? A: When prescriptions are picked up in person by a patient, relative or caregiver, the community pharmacist can answer any questions about when and how to take each drug – such as before or after meals, or with liquids. Although those instructions are printed, some patrons benefit from clear, personal advice and are comfortable talking with a trusted neighbor they may have known for years. Pharmacists have six years of training and are the healthcare professional most patients see most often. An anonymous phone technician hundreds of miles away at a mail-order firm can’t provide the same level of service.

Q: How could the loss of that business affect some drugstores? A: Some community pharmacies could be forced to reduce staffing and even might wind up closing if many of their customers are in PBM-using health plans

Q: What would be the wider impact of that development? A: Local governments and the state would lose property, business and income tax revenues, and have to pay more in unemployment benefits.

Q: What portion of local pharmacy revenues are comprised of maintenance drugs? A: The sale of maintenance drugs amounts to about 35 percent of local pharmacy revenues.

Q: Where does the Coalition for Quality Healthcare get its funding? A: Funding for the Coalition comes from member organizations and others who are interested in protecting quality healthcare, consumer rights and Michigan’s economy.

Q: How much does the Coalition for Quality Healthcare spend on administration? A: All administrative services are donated by Coalition members.

Q: Explain the rebate and discount system that exists between PBMs, drug manufacturers and mail-order companies? How are pharmacies hurt by that system? A: In order to attain maximum profitability, drug manufacturers must have high volume and high market share. PBMs are able to help manufacturers achieve both results by forcing doctors – and their patients – to switch from one brand of drug to another. The more switching a PBM is able to coerce, the more the manufacturer rewards it financially.

Coalition for Quality Healthcare "Upholding high standards of personal service, assuring full access to consumer options and preserving the traditional contributions of local pharmacies to the state's economy" © Copyright 2004 Coalition for Quality Healthcare. All rights reserved.