Congress isn’t fully back to work yet, but the annual battle between independent pharmacies and pharmacy benefit management companies is already nearing fever pitch.

This year’s feud is being fueled by two government reports that the small-drugstore lobby, represented by three different trade associations, and the pharmacy benefit managers (PBMs), represented by the Pharmaceutical Care Management Association (PCMA), say support their opposing positions.

The PBMs, which run the drug benefits for private health insurance plans and private Medicare plans, maintain their payment policies are industry-standard and that their role is to drive down the cost of medicines for the benefit of their customers.

This year is not expected to be any different than any other when it comes to Medicare legislation. Congress is going to have to work out its annual bill to adjust pay rates and other policies for a variety of medical providers, chiefly to address the 10 percent cut in physicians’ pay that will kick in at the beginning of July.

But while most healthcare lobbies have kept largely quiet since Congress broke for the year in December, the pharmacy and PBM groups have been busy taking shots at each other this month.

A Congressional Budget Office (CBO) report issued a few days ago is the latest bit of fodder in their dispute. Both lobbies are spinning the cost estimate of a bill favored by the pharmacies as supportive of their positions.

The pharmacies have been angling for an antitrust exemption that would let them collectively bargain with the PBMs for drug prices. The independent drugstores want to get similar leverage on prices that the large chain drugstores enjoy.

Rep. Anthony Weiner (D-N.Y.) introduced a bill to allow the pharmacies to band together; it has attracted 179 co-sponsors. Two similar bills introduced by Sen. Johnny Isakson (R-Ga.) have just a handful of co-sponsors.

PBMs maintain that the measure would substantially drive up drug costs for public and private health insurance programs and give the pharmacies an unfair negotiating advantage.

The CBO concluded that the bill would increase federal spending on Medicare, Medicaid and federal employees’ health benefits and reduce tax revenue for an aggregate cost to the government of $727 million over 10 years. That amounts to a 1 percent increase in drug payments to independent pharmacies, according to the CBO.

A small independent-drugstore trade group, the Association of Community Pharmacists Congressional Network (ACPCN), crowed that the price tag was a fraction of what the PCMA predicted.

“This is less than 3 percent of the unfounded $29 billion that the [PCMA] … claims the bill would cost Medicare Part D and other payers over five years,” the ACPCN said in a statement.

PCMA President and CEO Mark Merritt said that analysis was based on a previous collective-bargaining bill that was scaled back after the PBMs protested.

ACPCN spokeswoman Crystal Wright noted, however, that the author of the PCMA-commissioned May 2007 study asserted at an October House Judiciary Committee hearing that the $29 billion estimate applied to Weiner’s bill. At the hearing, Peter Rankin of the consulting firm CRA International described the estimate as “conservative.”

In any case, the bill still costs too much, the PCMA said in a statement this week. The legislation “would give independent pharmacies a ‘license to collude’ to raise prescription drug prices, without adding value for consumers or payors,” the group said.

The PCMA also seized on the CBO’s analysis of how health plans would react to the additional costs. “Those responses would include reductions in the scope or generosity of health insurance benefits, such as increased deductibles or higher co-payments,” the CBO report states. In addition, “Those costs would be passed through to workers,” the CBO concluded.

The pharmacy and PBM lobbies likewise played tug of war over another recent government study.

The Office of Inspector General (OIG) at the Department of Health and Human Services issued a report concluding that “Medicare Part D payments, excluding dispensing fees, to local, community pharmacies exceeded the pharmacies’ drug acquisition costs by an estimated 18.1 percent when our analysis included rebates that drug wholesalers paid to pharmacies.”

That large of a margin appears to undercut the pharmacies’ claims that Medicare underpays them, a position for which the pharmacy lobby has managed to win significant support in Congress.

The PCMA made no attempt to disguise its delight at the findings. “This report will raise eyebrows among policymakers who have been led to believe that independent pharmacists were in dire straits because of the Medicare drug benefit,” Merritt said in a written statement last week.

The pharmacies, however, sought to focus attention on the fact that the OIG did not consider dispensing fees, a point the report itself acknowledges is a shortcoming in its findings.

The report “is not a comprehensive analysis for all costs associated with the drugs and services that pharmacies deliver to patients, as it focuses on only one side of the equation,” National Association of Chain Drug Stores President and CEO Steven Anderson said in a written statement last week.

In fact, the National Community Pharmacists Association (NCPA) painted the OIG report as supportive of the pharmacies’ agenda. “We applaud the work of the OIG in confirming the financial difficulties Part D has placed on community pharmacy,” Bruce Roberts, executive vice president and CEO of the NCPA, said in a written statement.

According to the NCPA’s estimates, Medicare pays just $2.27 to dispense each prescription, which the group says is not enough, combined with the payment for the drug itself, to cover a pharmacy’s overhead. The NCPA concludes that the net profit margin for each prescription is 1.3 percent.