A consortium of health insurers and other businesses is calling for federal regulators to look to the private sector when crafting rules for the new Medicare prescription drug benefit.[@@]

The new rules should give Medicare drug plan sponsors the ability to offer incentives for use of generic drugs and other cost-saving strategies, the consortium writes in a letter to Mark McClellan, administrator of the Centers for Medicare and Medicaid Services.

If Medicare drug plan sponsors can’t use formularies, or lists of preferred drugs, as a tool for negotiating with drug manufacturers, “we anticipate that drug prices will be higher, premiums will rise for beneficiaries and program costs will increase for taxpayers,” the consortium writes.

Organizations participating in the consortium include Aetna Inc.; the Blue Cross and Blue Shield Association, Chicago; WellPoint Health Networks Inc., Thousand Oaks, Calif.; America’s Health Insurance Plans, Washington; and employers such as General Electric Company, Fairfield, Conn.

The consortium wants the CMS to tell the U.S. Pharmocopeia, a drug standards group that is helping to design the new Medicare drug program, to develop practical guidelines plan sponsors can use when designing formularies.

Requiring formularies to include too many drugs could hurt plan sponsors’ ability to negotiate with manufacturers, the consortium says.

The CMS has said it will require plan sponsors to include at least 2 drugs in every formulary class and category.

CMS already seems to require formularies that will be richer than many private-sector formularies, and U.S. Pharmocopeia could hinder drug plan sponsors if it demands even richer formularies, the consortium argues.