MEDICARE RX FORMULARIES LIKELY TO SATISFY DRUGMAKERS

Pharmaceutical firms will likely be satisfied with the Medicare Rx formularies that prospective prescription drug plan (PDP) sponsors have submitted to the Centers for Medicare & Medicaid Services (CMS), an industry expert says.

The formularies will mirror the private sector's current experience, said Scott Gottlieb, a senior fellow at the American Enterprise Institute and a former adviser to the CMS. "It is the experience [drugmakers] are accustomed to and the outcome is probably as good as they could have expected," Gottlieb said.

The fact that the plans are taking this form indicates the CMS' structure for designing the formularies has been successful, he said. "While the plans and the manufacturers will always find things to complain about on the margins, all in all this is a fair balance that approximates what everyone is already enjoying in the private market in the way of private prescription drug coverage."

Starting Jan. 1, 2006, the Medicare Rx benefit is expected to account for roughly 40 percent of all prescriptions dispensed in the U.S. Some industry observers and lawmakers had expressed concerns the PDP sponsors might exclude numerous drugs under formulary guidelines that required only a minimum of two drugs per therapeutic class. But the CMS' Jan. 21 final rule on implementing the Medicare Rx benefit eased some of those concerns when it noted all medically necessary drugs must be available to beneficiaries.