Despite Lawsuits Over Drug Prices, Insurance Giant Touts Revenue Growth, Claims To Have Lowered Drug Costs

As congressional lawmakers feuded over the fate of the nation’s health care system, insurance giant UnitedHealth Group reported stellar second-quarter earnings, which included more than $15.8 billion in revenue for a business segment at the roots of multiple class-action lawsuits against the company — and one that many blame for skyrocketing drug prices in the U.S.

The company faces three class-action lawsuits, one of which is a combination of two earlier class-actions, alleging that it violated the Employee Retirement Income Security Act, or ERISA, which mandates that the insurer and its pharmacy benefit managers act as fiduciaries — that is, act in the interests of their customers. The accusations outline a system of drug price-gouging, in which the pharmacy benefit manager — in UnitedHealth’s cases, OptumRx — allegedly forced pharmacies to charge fraudulent premiums for prescription medications and pocketed the difference.

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International Business Times

By @LydsONeal On

Pharmacy benefits manager Appro-Rx on bringing clarity to drug…

Kyle Fields, Appro-Rx CEO, discusses how his company is working on transparency in drug pricing as a pharmacy benefits manager.

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Kyle has been the owner of Appro-Rx since 2008 and has served as President and COO since 2010 and Co-CEO since 2016. Kyle oversees all aspects of the daily operations at Appro-Rx including sales, plan implementation, call-center operations, member and pharmacy help desk, contract negotiations, client retention and acquisition, government relations, and quality control. Kyle has an extensive background in Insurance and Insurance management, government relations, government finance, and extensive business and contract negotiations. Kyle is a former city councilman, was named to the 2014 40 Under 40 of Dayton, Ohio.

EpiPen lawsuit targets drug price middlemen

A new class action lawsuit challenging the price of EpiPens is targeting not the drug’s manufacturer, but three pharmacy benefit managers and the industry’s rebate practices.

The lawsuit alleges CVS Health, Express Scripts and Prime Therapeutics, cause price gouging — including the more than 500 percent increase in EpiPen’s price from 2007 to 2016 — by demanding increased rebates from manufacturers in exchange for favorable placement on their formularies

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Dayton Daily News

Katie Wedell

Feeling the pain of rising drug prices? Blame the middle man

While Washington wrangles with a replacement for Obamacare, patients across the country continue to battle one of the biggest everyday obstacles to good health care: Rising drug prices.

Prescription drugs account for 10 percent of the $3.2 trillion in overall health care spending, outpacing all other health care services, according to government statistics. Consumers with diabetes, cancer and leukemia are some of the most likely to feel pain at the pharmacy due to recent drug price hikes. The cost of two common types of insulin, for instance, increased 300 percent in the past decade.

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New Paper Observes That PBMs Are Middlemen That Obtain Huge Profits But Don’t Actually Make Anything

The evidence against pharmacy benefit managers (PBMs) just keeps piling up. A new report by Merrill Matthews and Peter Pitts of the Institute for Policy Innovation examines price transparency in the health care market, and concludes that PBMs reap gigantic profits and are a major contributor to higher drug costs. The authors point out that “a lot of money is made in the health care system by middlemen who don’t actually treat patients” and that PBMs “don’t actually make anything.”

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What Effect Will Anthem-Express Scripts Fallout Have on Industry?

As the simmering feud between Anthem, Inc. and Express Scripts Holding Co. looks to finally have an end date, it’s anyone’s guess as to how the PBM industry will look when the dust settles. Evercore ISI, however, offered some potential outcomes during a May 24 webinar.

During the webinar, titled “The Anthem/Express Saga + The End Game,” analyst Ross Muken observed that “the PBM industry, as well as other parts of health care services, is going through some pretty massive change.” Over the next 24 to 36 months, “we think…you’re going to see a real reshaping of that health care service landscape.”

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Wyden “C-Thru” Bill Helps Pull Back Curtain on Duplicitous PBM “Rebates,” Suspect Pricing Schemes, Related Anti-Competitive Behavior

Noting a torrent of bipartisan legislation recently introduced requiring Pharmacy Benefit Manager (PBM) drug middlemen to pull back the curtain on veiled, opaque pharmaceutical pricing practices, the Senior Care Pharmacy Coalition (SCPC) today backed Sen. Ron Wyden’s (D-OR) “Creating Transparency to Have Drug Rebates Unlocked Act” (C-THRU) bill. The legislation requires PBMs — for the first time — to publicly disclose data regarding “rebates,” “discounts” and other accrued payments — and their impact on Medicare Part D beneficiaries and the Part D program overall.

“PBMs are under heavy scrutiny on both sides of the aisle due to their stubborn, blanket and unjustifiable resistance to transparency — and SCPC strongly supports Senator Wyden’s ‘C-THRU’ bill as a way to lift the veil of secrecy surrounding PBM behaviors that result in higher costs to consumers and lower savings for the Medicare program,” said Alan G. Rosenbloom, President and CEO of SCPC, which advocates for the nation’s long term care (LTC) pharmacies.

Continued Rosenbloom, “Senator Wyden is precisely correct in his observation that ‘the public knows virtually nothing about whether PBMs are saving money for the consumer or pocketing it themselves’.” The SCPC President and CEO pointed to a damaging January 2017 Centers for Medicare & Medicaid Services (CMS) report finding that drug companies, wholesalers and pharmacies are paying larger rebates and hidden fees to PBMs and insurers — but that PBMs are keeping the money rather than translating it into lower costs for beneficiaries or government health care programs.

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Bill to help small pharmacies passes state senate

A bill sponsored by Sen. Steve Neville, R-Farmington, aims to help small pharmacies by eliminating fees they currently pay to middlemen.

“The small pharmacies around the state are having a hard time surviving,” Neville said when reached by phone today.

Neville worked with the New Mexico Pharmacy Business Council to draft the bill, which would prohibit pharmacy benefits managers from charging the pharmacies fees for claim processing and adjudication. Pharmacy benefits manager are third-party middlemen of prescription drug programs. These middle men check patient eligibility, administer plan benefits and negotiate costs between the pharmacies and the insurers. Each insurance company contracts with a pharmacy benefits manager.

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An End to PBM Pick-Pocketing

Usually when your pocket has been picked, you discover the loss pretty quickly. But many of America’s more than 22,000 independent community pharmacies are finding their reimbursements for prescription drugs reduced well after the patient hands over the co-pay and leaves with their medicine. The technical term for this transaction is a “retroactive pharmacy direct and indirect remuneration (DIR) fee.” That’s one way of putting it.

DIR fees pick the pockets of community pharmacies and their patients.

Pharmacies dispense medication and are reimbursed, only to have a portion of that reimbursement then “clawed back” by pharmacy benefit managers weeks or months after the transaction. There’s often no way to anticipate the fees, and pharmacists are seldom provided sufficient justification for the clawback.

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Middlemen’s Secret Drug Rebates Targeted by Wyden’s Bill

Senator Ron Wyden proposed legislation that would force drug middlemen to disclose secret discounts they receive from manufacturers, a sign of growing scrutiny of the role played by pharmacy benefit managers in high prices.

The bill would require pharmacy benefit managers such as Express Scripts Holding Co. and CVS Health Corp. to reveal the aggregate rebates that they receive from drug companies for Medicare plans and post the amounts on a government website, according to a statement from the Oregon Democrat’s office. While it may not pass in a Republican Congress, the proposal calls further attention to PBMs while drug prices are in the crosshairs of Washington lawmakers and President Donald Trump.

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