OPM has said it opposes an idea, raised over the years as proposed legislation, to centralizing purchasing of prescription drugs in the FEHB program, saying its “research in this area has not proven that cost savings could be achieved that may offset the substantial risk of pursuing such a proposal.”
OPM made its comments in a document describing budgetary proposals for the upcoming fiscal years affecting federal employees and retirees.
Prescription drug costs account for about a quarter of all FEHB-related expenses and OPM for many years has pushed initiatives for cost controls, including tighter standards for prescribing the most expensive drugs and emphasizing use of generics. However, some members of Congress and outside experts have suggested that centralized purchasing would yield further savings by better leveraging the FEHB program’s buying power, much as the VA does with drugs for its own medical system.
Says the OPM document: “The FEHB program is market-based. Each FEHB program plan offers comprehensive medical services, including services provided by physicians and other health care professionals, hospital services, surgical services, prescription medications, medical supplies and devices, and mental health services. A proposal to carve out any of these services or the other services covered under the contract, and administer the benefit as a separate contract or program could undermine the fundamental market-based nature of the FEHB program.
“FEHB program plans compete to offer all of the aforementioned benefits in a high quality manner at the most competitive price possible. In order to manage the cost of prescription drugs, OPM works with carriers to better manage pharmacy networks, focus on drug utilization techniques, coordinate coverage of specialty drugs between the medical and pharmacy benefit, optimize the prescription drug benefit via formulary design, implement effective cost comparison tools for members and prospective enrollees, and encourage sharing of best practices between the health plans,” it says.
