PHARMACEUTICAL CARE MANAGEMENT ASSOCIATION

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May 3, 2010

Phyllis C. Borzi

Assistant Secretary of Labor

Employee Benefits Security Administration

c/o Office of Health Plan Standards and Compliance Assistance

Room N-5653

U.S. Department of Labor

200 Constitution Ave, NW

Washington, DC 2010

Attention: RIN 1210—AB30

Dear Assistant Secretary Borzi,

The Pharmaceutical Care Management Association (PCMA) is the national

association representing America’s pharmacy benefit managers (PBMs), which

administer prescription drug plans for more than 210 million Americans with

health coverage provided through employers, insurers, unions, state and local

governments, and Medicare Part D.

Our members are working to ensure that they fully support their client insurers

and employer health plans in meeting the compliance timeframes for The Paul

Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of

2008 (MHPAEA). The interim final rule raises a number of questions and

concerns that the agencies must address to ensure smooth implementation of

the law.

MHPAEA requires health plans to have parity between medical/surgical benefits

and any offered benefits for mental health and substance abuse. As you know,

the law does not require health plans to cover mental health and substance

abuse services, but rather requires those plans that do cover such services to

ensure parity.

With respect to prescription drugs, the interim final rule makes clear that PBMs

and health plans may continue to use formulary tier structures. Pharmacy benefit

managers establish formularies based on Pharmacy and Therapeutic (P&T)

Committees’ clinical recommendations. Most PBMs have a standard formulary,

which includes a range of drugs in classes necessary for there to be appropriate

drug therapies available for physicians to prescribe. Many PBMs and health

plans use three-tier formularies, with successively more expensive enrollee cost

sharing for generics, preferred brand, and other brand drugs, respectively. Thus,

many health plans using PBM services cover most drugs at some level, although

they may impose prior authorization or step-therapy requirements, or other care

management requirements that have a clinical basis.
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Many drugs used for the treatment of mental health or substance abuse are also

used for other purposes. For example, a drug like Divalproex Sodium (brand

name Depakote) can be used for seizure disorder (not mental health) and bipolar

disorder (mental health). In some other cases, drugs used to treat mental health

or substance abuse have other uses that while “off-label” are nonetheless proven

and therefore generally covered by our clients’ plans. However, there are also

examples of mental health drugs where the only use would be a mental health

use and would not have any non-mental health uses.

PCMA urges the agency to provide clarity that with respect to prescription drugs,

not only is formulary tiering allowed, but also that the mere use of a standard

formulary with its broad list of drugs does not in and of itself denote coverage of

mental health and substance abuse benefits in plans that provide no such

coverage. PCMA also urges the agency not to require pharmacy benefit

managers to ensure that a given drug, in a plan that does not cover mental

health and substance abuse, is being used for a diagnosis unrelated to mental

health and substance abuse.

Were the agency to require such a determination, the burden on employers,

consumers, pharmacies, and physicians would be very high. In addition, this

additional barrier to treatment increases costs without providing any benefit to the

plan participants. Currently the system for filling a prescription is relatively

streamlined: a person submits the prescription to the pharmacy and then picks

up the dispensed medication in person or has it mailed. The information on the

prescription does not include a diagnosis. For the most part, a diagnosis is not

required. In those limited cases where more information is needed, the patient is

generally directed by the pharmacist to call the plan to obtain prior authorization.

Were a health plan and PBM required to show that a drug was being used for a

specific diagnosis, the pharmacist would have to call the physician’s office to

determine the diagnosis, then determine whether the drug was covered for that

indication, then alert the patient accordingly. In addition to imposing additional

back-office burdens on physicians’ offices, such delays would often result in

patients forgoing needed medications. This would be an unfortunate unintended

consequence of the mental health and substance abuse parity law.

More broadly, we are concerned that the Interim Final Rule (IFR) introduces

certain new concepts, such as “non-quantitative” treatment limitations, that are

not based in the legislation and create considerable uncertainty for plans. The

IFR does not define the concept, but instead gives a very broad “illustrative list”

of examples, with the result that plans have no parameters with which to

measure the acceptability of standard formulary management and utilization

management tools. In fact, the IFR itself acknowledges the lack of clarity and

difficulty in applying the non-quantitative treatment limitation rule to actual health

care plan procedures, and admits that the illustrative list of examples do not

reflect the reality of the situations.
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PCMA does recognize that the IFR includes a special rule for multi-tiered

prescription drug benefits, which states that if a plan applies different levels of

financial requirements to different tiers of prescription drug benefits based on

certain reasonable factors (i.e., cost, efficacy, brand vs. generic, mail order vs.

retail pick-up) and without regard to whether a drug is generally prescribed for

medical/surgical benefits or for mental health or substance abuse disorder

benefits, the parity requirements are satisfied with respect to prescription drug

benefits. While this rule on its surface provides some protection for standard

PBM drug formulary designs, it becomes essentially meaningless against the

complex and confusing non-quantitative treatment limitations rule.

As a result of this uncertainty, many health plans, particularly in the employer

market, are considering dropping drug coverage and/or dropping coverage for

mental health and substance abuse disorders altogether rather than run the risk

of being found to be out of compliance with the requirements of the IFR.

We do not believe that this is the outcome that either Congress or the Secretary

intended, but we believe that this will be the unintended consequence if the IFR

is implemented as currently written. We strongly urge the Secretary to revise the

IFR to create a safe harbor for prescription drugs that recognizes that

prescription drugs can be used to cover many different conditions, and that it is in

the interests of participants that they be allowed to access their drug benefit

irrespective of their particular diagnosis.

Sincerely,

Kristin Bass

Senior Vice President, Policy