Peters, Stabenow Urge Department of Defense to Explore Efforts to Reduce Prescription Drug Costs in TRICARE

U.S. Senators Gary Peters (D-MI) and Debbie Stabenow (D-MI) sent a letter to Secretary of Defense James Mattis asking him for timely consideration of a pilot program to improve access and reduce the costs of prescription drugs in the TRICARE program, which serves active duty military personnel, National Guard, reservists, retired servicemembers and their families.

“We believe the TRICARE Acquisition Cost Parity Pilot Program for Retail Pharmacy is a sensible approach to reducing prescription drug costs in the TRICARE program,” the senators wrote in the letter. “Because the FY2017 NDAA requires the pilot to begin on October 1, 2017, we urge you to act quickly to consider the pilot program. In addition to reducing costs to the TRICARE program, this pilot will help small businesses contribute back to their local economies and will help to sustain the pharmacy benefit upon which our deserving military veterans and families rely.”

Currently, all TRICARE beneficiaries must get non-generic medications from a military treatment facility (MTF) or through mail order, but have no option to visit a pharmacy in person. The pilot program, which was established in the National Defense Authorization Act (NDAA) for Fiscal Year 2017, will allow beneficiaries to get their medications from local pharmacies while preserving access through the existing MTF and mail order systems, and reduce costs by allowing the Department of Defense to purchase non-generic medications at the same lower rate it pays for drugs dispensed through the mail or MTFs.

The pilot will also provide additional options for the families of retired servicemembers, National Guard members and reservists who may not live near an MTF to visit a pharmacy in person to purchase their medications. There are more than 97,000 TRICARE beneficiaries living in Michigan, but there are no military treatment facilities in the state.

The text of the letter is available here and copied below:

The Honorable James Mattis 
Secretary of Defense
Department of Defense
1000 Defense Pentagon

Washington, DC 20301

Dear Secretary Mattis:

The undersigned members of the Senate urge the timely consideration of a pilot provision of the FY2017 National Defense Authorization Act (NDAA) that will reduce prescription drug costs for the Department, protect beneficiary health, and improve choice in points of access for beneficiaries.   

We believe the TRICARE Acquisition Cost Parity Pilot Program for Retail Pharmacy is a sensible approach to reducing prescription drug costs in the TRICARE program.  Currently, all TRICARE beneficiaries are required to obtain their non-generic maintenance medications at a military treatment facility (MTF) or through mail order.  This pilot will restore access to chain and small business pharmacies for retired beneficiaries who rely on non-generic maintenance medications, maintain access to existing mail order and MTF options and reduce costs. 

Cost savings would be achieved through the elimination of the acquisition cost disparity among pharmacy service locations by giving the DoD the authority to require that brand medications dispensed in the retail setting be purchased at the much lower rate it currently pays for the same medications dispensed in mail or MTFs.  This change will save the DoD money through both lower purchasing costs and reduced administrative costs.

Because the FY2017 NDAA requires the pilot to begin on October 1, 2017, we urge you to act quickly to consider the pilot program.  In addition to reducing costs to the TRICARE program, this pilot will help small businesses contribute back to their local economies and will help to sustain the pharmacy benefit upon which our deserving military veterans and families rely.

We look forward to working with the DoD on this program.