Kelley Seeks Detailed Information From OPM on Drug Cost-Shifting


4/18/08: NTEU National President Colleen Kelley has raised serious questions with the Office of Personnel Management (OPM) regarding the potentially unfair and unrealistic shift of certain prescription drug costs to persons with serious illnesses.

In a letter to OPM Director Linda Springer, President Kelley described her “great concern” after having seen a media report about a new drug pricing system in use by some insurance companies that has the effect of substantially driving up consumer costs. OPM oversees the nation’s largest health care plan, the Federal Employee Health Benefits Program (FEHBP), which covers more than eight million federal workers, their families and federal retirees.

President Kelley said she was concerned not only with the undue cost burden on FEHBP participants of having to pay a percentage of a drug’s cost, ranging up to one-third rather than the traditional co-payment, she also was quite concerned that companies taking part in the program apparently moved ahead with this new pricing system with OPM’s knowledge and approval. If that is so, Kelley said, then OPM has “failed terribly in its obligation” not only to keep federal employees informed about matters critical to their well-being, but to ensure federal employees have the opportunity to make choices that fit their different personal and family circumstances.

The cost-shifting among the so-called Tier 4 drugs appears as though it would result in costs of thousands of dollars a month for enrollees, Kelley said, and “could have a profound life-and-death impact,” noting that for at least some of these drugs, there are no generic, and thus lower-cost, equivalents. Such pricing changes, she said, would be a particularly harsh blow to individuals already facing the difficulties of dealing with a serious and potentially life-threatening illness. At least one major FEHBP participating company has said it would suspend the pricing in the wake of media reports of its impact on those with such serious illnesses as some cancers, multiple sclerosis, hepatitis C, rheumatoid arthritis and hemophilia, according to The New York Times.

In her letter to OPM, Kelley reiterated the union’s long-standing position that OPM should be directing its efforts toward using “the considerable marketing clout inherent in the FEHBP” to keep costs reasonable for all participants—including the costs of prescription medicines that commonly are an integral part of health care plans.