Group Offers Guidelines for Medicare Drug Plan

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Group Offers Guidelines for Medicare Drug Plan

Thu Aug 19, 8:21 PM ET

/By Heavey/

WASHINGTON (Reuters) - A U.S. group advising Medicare on its new

prescription drug benefit released a proposal on Thursday that could

determine how likely the latest medicines are to be covered for the

elderly.

The United States Pharmacopeia, or USP, a nonprofit group that sets

drug-quality standards, organized prescription drugs into a total of

146 groups, including 43 therapeutic categories such as

antidepressants and cardiovascular medications.

The proposed guidelines, if accepted by the federal government,

could be used by companies administering Medicare's permanent

prescription drug coverage starting in 2006.

Those pharmacy benefit managers could use the guidelines to set up

their own groups of drugs, or formularies, that will list what drugs

they will cover in their plans.

The number of final categories could determine whether some newer,

more expensive therapies are lumped with older drugs that often have

generic competitors.

For example, UPS divides anti-inflammatory drugs that treat

arthritis into two categories, including " nonsteroidals, " a broad

group that includes COX-2 Inhibitors like Pfizer Inc.'s Celebrex and

Merck & Co. Inc.'s Vioxx as well as salicylates like aspirin.

Each category should include at least two drug options, but most

will need more than two, the Centers for Medicare and Medicaid

Services, or CMS, said in a separate report.

Broader categories with more drugs could allow benefit plans to list

fewer new therapies and substitute older, cheaper medicines for some

diseases and give them greater power to negotiate discounts with

drug makers to list their drug.

Narrower categories would likely give drug companies a better chance

at having their newer, often more expensive, medicines included.

" A REASONABLE CHOICE "

The Pharmaceutical Research and Manufacturers of America, which

represents drug makers, criticized the guidelines for excluding many

types of medicines patients need and including " outmoded forms of

treatment. "

Phil Blando, vice president of the Pharmaceutical Care Management

Association, said the plan " is a step in the right direction " but

doesn't " fully reflect the commercial market. " Most plans use 50 to

100 categories, said Blando, whose trade group represents pharmacy

benefit managers.

Rami Armon, an analyst for Lehman Brothers, said Thursday's proposal

basically " split the difference " between what the benefit managers

and drug companies wanted but that both groups will lobby for changes.

CMS Administrator Mark McClellan called the proposal " a starting

point " but did not say whether the agency planned to use it.

The agency plans to review companies' formularies to ensure they

offer " a reasonable choice of drugs that reflects current medical

practice, " McClellan said.

The permanent prescription drug coverage replaces the current

temporary drug cards under Medicare, the government's medical

insurance program for the elderly and disabled. The drug programs

were mandated by the new Medicare modernization law passed last year.

USP plans to hold a public hearing next month to discuss the

proposal, which can be found online at

http://www.usp.org/pdf/drugInformation/mmg/draftModelGuidelines .pdf.

(Additional reporting by Bill Borden in New York and Richwine

in Washington)

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