Pharmacy fees likely will be hiked

The House and Senate will decide in the next few weeks how military pharmacy fees will be raised in 2013, a step that arguably will be the most significant taken to date to slow growth in military health care budgets.

Out-of-pocket costs for military families and retirees who have prescriptions filled in the TRICARE network of retail pharmacies depend on final language in the fiscal 2013 Defense Authorization Act. Congress intends to pass a final defense bill by mid-December.

The House-passed plan for pharmacy fees could win over Senate colleagues during final negotiations on the bill. It already is more palatable with military associations.

It calls for more modest co-pay hikes than proposed by the Obama administration.

But it would achieve the same first-year savings by requiring beneficiaries 65 and older to use the TRICARE mail order pharmacy program for refills of all maintenance drugs, those that control chronic conditions like high blood pressure and diabetes.

Any brand name prescription filled by mail rather than in drug stores or supermarkets saves the department 27 percent, on average, said Rear Adm. Thomas J. McGinnis, chief of pharmaceutical operations for TRICARE.

Officially the administration continues to back the pharmacy fee increases it unveiled last spring.

Prescriptions would remain free on base, and the co-pay for generic drugs would stay at $5 at retail outlets. But the administration plans to raise the $12 co-pay at retail to $26 for brand names on the military formulary.

The formulary is the department's list of approved drugs based on price and effectiveness.

The administration also wants to ban retail outlets from filling prescriptions for non-formulary drugs, forcing beneficiaries to use mail order for the most costly brand name medicines.

Also the new higher co-pays would climb by $2 more each year until reaching $34 in 2016. After that, they would be adjusted yearly based on overall medical inflation.

Co-pays for brand name drugs at mail order also would jump to $26 from $9, for a 90-day supply, and then climb slowly to $34 by October 2016, under the administration's plan

TRICARE already has authority to make these changes.

The question is will Congress step in and modify the plan.

The Senate Armed Services Committee, in marking up its version of the 2013 National Defense Authorization Act, stayed silent on the issue.

So unless the bill is amended on the floor to interfere with the plan, the Senate will signal TRICARE to proceed with planned fee changes.

Tom Philpott can be contacted at Military Update, P.O. Box 231111, Centreville, Va. 20120-1111, or by e-mail at: [email protected]