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Executive Summary

PMA's MEDICARE WORK PLAN WILL INCLUDE STUDY OF DRUG UTILIZATION REVIEW systems as part of the association's response to the Catastrophic Health Care Act. PMA's detailed work plan, encompassing 11 separate objectives, was previewed at a meeting for PMA member firms in Washington, D.C. Sept. 26. The DUR study will be part of PMA's effort to provide input to HCFA when the agency begins to develop a DUR system for the Medicare outpatient drug benefit. That system could prove to be a critical factor in shaping the outpatient benefit, given the congressional mandate that HCFA develop programs to identify and educate physicians and pharmacists about "unnecessary or inappropriate prescribing and dispensing." The review of DUR systems is one of a number of studies PMA foresees to assess different aspects of the drug benefit. The association is, in effect, planning to conduct an array of "parallel studies" shadowing those to be performed by the federal government. For example, another PMA project is to analyze financing and pricing issues. PMA projects collecting "price increase data referenced in the law." The association plans to contract for development of periodic estimates of program costs and revenue projections for the program. PMA will also contract for development of a model for assessing program cost increases and the impact of alternate cost containment strategies as well as various economic conditions. Under another objective, PMA will attempt to "anticipate future scenarios for Medicare drug benefits." One aspect the association is keeping an eye on is restrictive formularies -- the prohibition of such formularies was one of PMA's highest priorities during congressional debate on the catastrophic care legislation. The association plans to analyze state Medicaid formularies, identify other data bases, and "assess the feasibility of a comprehensive study of the restrictive formulary issue." To establish an organizational infrastructure for dealing with the implementation of the Medicare drug benefit, PMA has appointed an Intrasectional Task Force on Health Care Systems, chaired by Upjohn Corporate VP Harold Chappelear. The panel's 11 members are drawn from PMA sections on law, marketing, state government affairs, and the Washington representatives. In addition, a separate 11-member data subgroup, chaired by Sandoz Exec Director-Industry Affairs Denis Grady, will provide the task force with "input on the data resources that are relevant to the Medicare effort." Grady also serves on the task force. PMA VP Karen Williams is staff liaison to the task force.

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