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CVS gen epinephrine autoinj for $110 – are they the heros? NOT!

See previous post that discusses the communication that went out to the clients of CVS/Caremark’s PBM services.  In that email, specifically they DENIED that a generic to Epipen even existed!!!!

And in another blog post, we illustrated how CVS/Caremark through their joint generic purchasing venture with Cardinal Health must have been strong arming Mylan to reduce price for them and PBM clients (rebates up in the air…) as even 10 days after product was launched and was in every other major wholesaler in America, no Cardinal Health (including independent pharmacies) customers could order Moylan’s generic to their own Epipen – as talks were ongoing as REDOAK – the joint venture – was trying to UNDERSTAND the launch and how it was going to affect reimbursement issues.  Code words for: WE DEMAND BETTER REBATES.

Less than a week after the product is finally at Cardinal Health, CVS announced that they were going to promote and lower price of the generic to Adrenaclick’s version of epinephrine autoinjector to $110 for a 2 pack.  Hurray, hurray, aren’t they wonderful?  Isn’t CVS really leading the way here?  Aren’t they adding value to clients, payers and patients?  Sure you say, of course you can say as how could you say any different.

So, this generic product to Adrenaclick HAS been available this entire time and even retail pricing it is at least 2/3 the price of EpiPen.  So a LESS expensive alternative to Epipen has been available this entire time – you ask?  The answer YES!!!!!!!!  So, why wasn’t this in the newsletter to the clients in response to the Epipen controversy?  Answer: they didn’t want to give up their rebate, which was the ENTIRE point of the CEO of Mylan who unveiled the truth behind Rx pricing like no one has done in recent years to expose the shenanigans of PBMs who use these tactics to their (financial) advantage, all the while saying they do so for their clients (which may or may not get their rebates 100% passed through to them).

Since the price of this magically appearing product on CVS formularies and in their stores is now so low, can patients get anywhere?  Answer: of course not – JUST at CVS pharmacies or I’m sure through CVS mail order pharmacies.  Well you ask, what about the Cardinal Health customers who may see a residual benefit through aggressive generic RedOak contracting – answer:  NO!  Cardinal Health independents are in the same boat as every other non-CVS pharmacy in America.

WHY did they do this?  Answer we believe is to combat negative publicity as the CEO of Mylan (the true HERO) has painted them into a corner.  They said plainly they WILL stock a less expensive generic (when that was available the entire time) but they said WHEN it becomes available.  And NOW its obviously available, and then obviously Mylan wasn’t interested in playing the RxRebate game with their generic (as that was the entire point as the CEO said to “bypass” this pricing system), so what was left?  Finally acknowledge the generic that’s been available the entire time and partner on lowering the price (with the generic company realizing the offset in profit will be gained in market share).  Win/win for all Americans.  Lose/lose for all Independent pharmacies and other chains – national or regional that have also been victims of these pricing shenanigans and who’ve just been trying to help patients – but that doesn’t garner front page news then does it?

Gen Epipen NOT at Cardinal but at other 2 wholesalers

So, why would you ask would generic Epipen NOT be at one wholesaler when it is at the other 2?  (Suspected answer is below- but not to spoil – let’s introduce the players).

Wholealer 1:  McKesson: – no affiliation with any PBM or a specific retail chain or insurer.  They are however purchasing physician groups such as oncology and are making money in these arrangements no doubt due to the specialty pharmaceuticals dispensed in these clinics.  It was McKesson’s CEO that publicly announced via investor conference call how disappointed they were with lack of pharma price increases going forward.

Wholesaler 2:  Amerisource Bergen:  Partially has some type of “long range agreement with Walgreens”.  Walgreens nor Amerisource Bergen owns a PBM or is owned/affiliated with an insurance company (yet).

Wholesaler 3:  Cardinal Health:  Does not own a PBM – HOWEVER is now affiliated with CVS (who you know owns CVS/Caremark) via the arrangement with RedOak Sourcing http://www.redoaksourcing.com/aboutus.html (Here’s straight out of Cardinal’s 10k) In July 2014, we established Red Oak Sourcing, LLC (“Red Oak Sourcing”), a U.S.-based generic pharmaceutical sourcing venture with CVS Health Corporation (“CVS Health”) with an initial term of 10 years. Both companies have contributed sourcing and supply chain expertise to the 50/50 venture and have committed to source generic pharmaceuticals through arrangements negotiated by the venture. Red Oak Sourcing negotiates generic pharmaceutical supply contracts on behalf of both companies. We are required to pay 39 quarterly payments of $25.6 million to CVS Health which commenced in October 2014. Due to the achievement of a milestone, the quarterly payment to CVS Health will increase by $10 million beginning in fiscal 2016. In addition, if an additional milestone is achieved, the quarterly payment will increase in fiscal 2017 by a further $10 million resulting in a maximum quarterly payment of $45.6 million if all milestones are met. 

Not sure how this 50/50 partnership works as if one party has to pay quarterly payments of the likes of $25mil to the other, not even sure if there is a name for that type of arrangement.  But apparently, its working for both  http://www.bizjournals.com/columbus/news/2015/01/29/cardinal-health-raises-profit-forecast-amid-fast.html, even though pharmacy owners who purchase from Cardinal don’t see and reduction and have complained that in essence they are funding this arrangement as profits are made in large part from their independent pharmacy customers.

 

Mylan’s Epipen BX rated generic IS available at the other 2 wholesalers, McKesson AND Amerisource Bergen wholesalers.  But NOT at Cardinal.  Below is wording of explanation.

On December 16, 2016, Mylan announced a launch of EpiPen® Auto-Injector (epinephrine injection, USP) which they are promoting as an authorized generic to EpiPen®. According to First DataBank and Medi-Span, this new product is currently a BX-rated product which prevents pharmacists in many states from substituting the product without contacting the prescribing physician. At this time, Red Oak Sourcing and Mylan have not reached a distribution agreement on this product as we continue to engage in dialogue with Mylan to fully understand how they intend to launch this alternative product. As we continue to conduct these conversations, our focus is working on our customer’s behalf to better understand Mylan’s launch strategy, possible reimbursement implications, and other potential impacts to you and your patients.

WHAT?  Why would Cardinal care about reimbursement issues?  Cardinal should be stocking prescription items for ALL of their customers.  Independent pharmacies aren’t involved in the RedOak deal and shouldn’t be penalized by lack of availability.  Is it perhaps CVS/Caremark who is “concerned” about the rebates (or lackthereof) for this new product and they aren’t sure what to do now as with this brilliant move by Mylan (making their own generic) bypasses the (unnecessary) complex rebate game manipulated by PBMs.

It simply doesn’t make sense for Cardinal Health NOT to have generic Epipen at this point.  And when things don’t make sense you have to do one thing….. follow the money!

 

CMS Head and PBMs – leaving off the hook and drinking their koolaid

Andy Slavitt is currently head of CMS, a position he will vacate with the new Trump Administration when Seema Verma takes over under leadership of HHS Chief – Dr. Tom Price.   Andy’s industry experience is quite interesting as he started a “discount” plan (that included medications) that he eventually sold to UnitedHealthcare (Optum) and worked his way up the corporate ladder from there.

Interesting to note – why need a “discount” card at all?  Answer:  because PBMs have artificially increased prices in the marketplace to show their (perceived) value to their end clients.  How is this done?  For expensive Brand name medications 50% more or less gives the PBM play money to manipulate with these rebates supposedly going back to plan sponsors (clients), but in reality the amounts are almost impossible to audit and no one knows for sure.  There’s a rather high portion of commercial clients that receive NO rebates at all – yet those rebates go to the PBM.

For Generics, pharmacies have U&C pricing, which at this point with reimbursement models (of MAC pricing, etc) makes calculating “discounts” off of U&C is really all funny money and made up.  With higher copays, patients are finding that their copays are HIGHER than what the pharmacy would have charged them without insurance.  Its a billing “game” with rules set by PBMs and pharmacies having absolutely NO say and the patients and payers are caught in the middle.

So where do the RxDiscount cards come into play?  Companies work (somehow) with PBMs and access their commercial contracts so people pay a lower amount (off of U&C) than supposedly they would pay without any card/discount at all.  While these cards may help patients at large chains who have unattractive cash pricing, they are unneeded at most independent pharmacies and places like Costco where Rx pricing is done on a “cost plus” basis for the consumer.  There is another not very well publicized, but hard truth about these cards in that the “data” of patient, doctor, medication, etc is gathered and sold to companies for whatever reason they want to use the data for – good or bad.  In the latest case of BlinkHealth, we’ve learned a disturbing fact that this data is most certainly used for nefarious purposes that have nothing to do with healthcare – but health data is used against patients for the purpose of those who have access or control of the data.  http://www.blinkhealthfraud.com

So, why do the discount cards exist?  To make the discount card companies $$ – including Andy Slavitt.  There is “spread” in the contract pricing to the pharmacy AND the price to the patient.  And its even more “profit” than the pharmacy who dispenses the Rx to the patient receives.  The discount companies – BlinkHealth, GoodRx, and Andy Slavitt’s HealthAllies (now owned by OptumRx but still functioning) KEEP the spread.  What a racket right?  A cost plus pricing model takes out the spread, gives the patient a good price, the pharmacy a fair margin and the even better benefit for the patient NO data is sold for that transaction.

Since Andy Slavitt’s income and then subsequent sale and then paychecks came from OptumRx and this “spread” model pricing – it is NOT a surprise that conveniently he left out these middlemen (of which he was one and who knows may be one again in January) and their opaque pricing models set up under the guise of helping patients, but in reality give money to the middlemen for their bottom line and to add value to shareholders.

Wouldn’t this be called the epitome of being biased?  If it weren’t for the #epigate scandal we’d (the American public, policy makers, healthcare providers, legislators, etc) wouldn’t have any idea that the middlemen added such (unneccessary) and self serving cost to these expensive drugs.  There’s no way that CMS head Andy Slavitt and every other person at CMS isn’t aware of the Epipen issue and now knows (if they didn’t before) how much $$ the PBMs are taking for themselves.

So, strangely quiet about the $$ in the middle by PBM middlemen was Andy Slavitt in a blog post https://blog.cms.gov/2016/11/04/remarks-by-andy-slavitt-the-need-to-partner-on-drug-innovation-access-and-cost/ in November, but retweeted this week.

Its no wonder that pharmacies are getting whacked with #Dirfees and PBMs continue to solidify their oligopoly with self dealing of forcing patients to their own mail order, specialty and even retail stores.  EVEN in the case of state Medicaid programs – who have to abide by CMS/HHS policies/rules.  The greed of PBMs have run out of control encouraged or ignored by our government led by the likes of PBMphile Andy Slavitt.  Glad their reign is over.

 

 

CVS/Caremark Newsletter to Payer Clients – EPIPEN

CVS/Caremark admits to hiking up cost of Epipen with their communication to their clients (payers).  cvsepipenlettertoclients

 

Below is a response by PBM – CVS/Caremark (one of the Big 3 PBMs that control over 70% of the PBM market along with ExpressScripts and OptumRx/UnitedHealthcare).

How telling is this communication?  Jotted on the commentary are the obvious ridiculousness of this entire communication.

1.  First of all… Where does CVS/Caremark come up with the end retail price of a box of 2 Epipens costing $730?  We called a local CVS retail pharmacy and asked for the price of a box of Epipens and they said withOUT any drug coverage/insurance – the prescription would cost $649.
For every discussion that has ensued regarding the price hikes of Epipens:  Mylan CEO in front of congress, CNBC segments, news stories, etc.  $730 (price in their communication) – $649 (price quoted a cash customer) – difference of $81.
When CVS/Caremark and other PBMs do dog and pony shows trying to get the PBM business for various employer groups or even insurers themselves (as well as Medicaid managed care insurers and other government plans) – CVS/Caremark and other PBMs tout the “savings” that they payer will be able to access ONLY with their PBM.
$730, where did they get this number?  It is easy – they simply made it up!  So employer groups – what “savings” are you really accessing?  With these types of numbers the savings look very attractive – and it is these “savings” that they convince groups that they will NOT have if they don’t utilize their PBM (or any other one as they all do the same thing).  And when the presentations are done ALL of these numbers are based on false retail pharmacy numbers like this.
2.  The chart titled “Our clients costs for Epipen” shows EXACTLY what people are starting to figure out – that the PBM games of Rx Rebates with manufacturers are adding (unnecessarily) to the cost of the Epipens.  They couldn’t have outlined it better for people to understand.
3.  Using the same chart.  Imagine here….. that we went back to the good old days where patients paid for prescriptions and got reimbursed by their employer or plan – you have to imagine the ENTIRE system functioned like this (a world with NO PBM).  Wouldn’t we have enjoyed that lower red (consistent) line with no “negotiated discounts, rebates and price protections”?  Wouldn’t we be better off???  According to the CEO of Mylan the end price of Epipen withOUT the PBM games would be less than 1/2 of the final $608 final price.
4.  Aren’t PBMs supposed to “manage the pharmacy benefit”?  Aren’t PBMs the ones now who help employers implement cost effective strategies like tiered formularies?  Aren’t the more costly drugs reserved for the higher tier on the formulary (for just that reason)?  Doesn’t the copay card offerings by Big Pharma manufacturers enable patients to bypass the tiered formulary (while sticking the majority of the bill to the end payor)?  Hasn’t the PBM industry tried to fight back against this and has even gone as far as kicking off drugs from the formulary entirely to punish the companies (and their drugs) for this subversive system?  YES!  So why is this newsletter sharing the availability of the copay card as somehow being the answer to the high cost of EpiPens to the end patients?
5.  On the last page the newsletter says “as soon as there is generic competition for the Mylan Epipen, we will encourage plan members to use the lowest cost product”.  Every “client” who thought they trusted CVS/Caremark should be LIVID at this obvious falsehood.  Pharmacists/pharamcies (who know pharmacy day in day out and at this point are basically slaves to the PBMs) let go the (same – false) comment by the ExpressScripts Medical Director who said that there wasn’t a generic as hey, he’s a Doctor what does he really know?  Maybe no one told him.  But there IS a generic epinephrine autoinjector that is 2/3 the price (or even less) then the brand Epipen (who stills has a patent on the device itself).  Pharmacists can’t automatically substitute but pharmacists can do a function (that PBMs demand for other issues – even changing out entire drugs for similar drugs in the same class) – CALL the Doctor to switch if the Doctor didn’t specifically write the prescription for Epinephrine and instead used the phrase “epipen”.  We do that ALL day, every day!  PBMs know it, expect – heck they DEMAND we do it for other items for their “formulary management”.  Why are they acting as if a generic in that class doesn’t exist?
The reason, the REAL reason is there is NO rebate associated with the generic (or if there is it is insignificant) and therefore the PBM can’t play hide the rebate dollars with their end “clients” (remember the ones who they are supposed to be offering discounts and rebates)……
This communication shows how scared the entire PBM industry got when CEO Heather Bresch of Mylan started lifting the veil of pharmaceutical prices exposing their manipulation of these RxRebate dollars.  Pharmacists and others paying attention knew that their profits with the rx rebate scam were big, we never knew HOW big and thus how much this scam was adding to the cost of drugs in our country.  For that we can thank Mylan!cvsepipenlettertoclients

Call to Action Against Arbitrary DIR Trimester 1 Fees

Dear PUTT Members,

If, like me, you found an unwelcome surprise in the form of a DIR Trimester 1 report statement in your mailbox, you aren’t alone. The PBM’s repugnant practice of arbitrarily reconciling contracts and reimbursements – then charging the rate differences back to us – is creating an environment of enormous unworkability, uncertainty and stress on the very industry whose mission and purpose is to provide patients with medicine to help heal or find relief when sick or in pain!

We cannot continue to accept these abhorrent practices. They interfere with our fundamental right to do business. We did not create these practices and we were never given a voice when it came time to negotiate.

The idea that one must “pay to play” in order to practice one’s profession stands in stark contrast to the principles on which our country was founded. We must level the playing field. We must take action. As Pharmacists United for Truth and Transparency, we are calling on the states and the federal government to demand greater oversight of Pharmacy Benefits Management companies. We are calling for the end of unchecked, unregulated dealings that jeopardize the independent community pharmacy. We are Main Street, America businesses –small businesses — the very heart of the American economy.

We have seen some victories in our fight to expose the truth about PBMs, but it has never been more critical that we take action NOW. It isn’t enough to simply call on government. We must literally call them – pick up the phone and dial our congressmen and women. And we must be willing to do it more than once.

We want to hear from you. What do you need to make your cause heard? A short list of talking points when calling your senator? We’ll help -send us an email. To have your story told in the media? We have a PR team ready to assist. Don’t stand down or feel like you just have to accept these unfair practices. Remember, you have more than 23,000 colleagues in the same situation. We CAN create change – it just requires being willing to take action.

Thank you for all you do for your patients and your communities, and thank you for being members of PUTT. We’ll continue to fight this fight with you until we win.

 

Teresa Stickler, R.Ph

President