CVS accused of using Medicaid roles in Ohio to push out competition

Pharmacy giant CVS stands accused of overcharging Ohio taxpayers millions in an attempt to drive out retail competition — a charge that CVS flatly denies.

Bottom line: The company allegedly boosts its profits by overcharging insurers for medications while often reimbursing pharmacists less than the cost of the drug, critics say.

As a result, retail pharmacies in the Buckeye State have been dropping like flies, and state regulators are looking at ways to bring more transparency to a Medicaid benefits-management system that CVS dominates.

“Where I’m losing pharmacies right now is in high-Medicaid areas,” said Antonio Ciaccia of the Ohio Pharmacists Association. He noted that 165 Ohio pharmacies have shuttered in the past two years.

Medicaid, the federal-state health program for the poor and disabled, will spend about $3.2 billion on prescription drugs in Ohio this year. CVS Caremark, an arm of the company that manages pharmacy benefits, handles most of that money by billing insurers that contract with the state and then reimbursing pharmacies that fill patients’ prescriptions.

Ohio Medicaid Director Barbara Sears stressed, “This is not an Ohio Medicaid problem. This is impacting all 50 states. It’s a CVS Caremark issue, and it’s not just impacting independent pharmacies.” Sears said “larger chains” also have complained about reimbursement rates.

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By Catherine Candisky and Marty Schladen
The Columbus Dispatch

Insurers Game Medicare System to Boost Federal Bonus Payments

The number in the corner of Upton Martin’s Medicare plan card from Humana Inc. changed twice over the past four years. He didn’t think anything of it, and his coverage didn’t seem different in any way.

The changes, though, were evidence of a lucrative maneuver that has allowed Humana and other providers of Medicare Advantage plans to collect additional revenue from the federal government.

Medicare ranks privately managed plans such as Mr. Martin’s on a five-star quality scale and provides financial bonuses to providers of top-ranked plans. Mr. Martin’s plan was set to be downgraded, which would have cost Humana its bonus. So the company merged plans covering Mr. Martin and more than a million others into different contracts with higher scores. That preserved the bonuses.

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March 11, 2018 13:32 ET (17:32 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
By Anna Wilde Mathews and Christopher Weaver

FDA: Capturing the Benefits of Competition for Patients

Speech by Scott Gottlieb, MD
Commissioner of Food and Drugs
America’s Health Insurance Plans’ (AHIP) National Health Policy Conference
“Capturing the Benefits of Competition for Patients”
March 7, 2018
Washington, DC

Good morning, and thank you for inviting me to speak today about “Affording Tomorrow’s Cures.”

To some, this may seem to be an unfitting topic for me to discuss: the FDA, after all, doesn’t — and shouldn’t — regulate drug prices.

The FDA’s mission is to promote and protect public health, and helping ensure access to medicine is a vital part of this mission.

One of the primary ways that FDA helps create access is through efficient review of drug and biologic applications to determine if they’re safe and effective for their intended use.

But Congress also has charged FDA with advancing policies that maintain a balance between encouraging and rewarding medical innovation and facilitating robust and timely market competition.

And access to medicines is a matter of public health.

I want to focus my remarks today on access to generic and other follow-on medicines and, in particular, on the market for biosimilars – or follow on versions of branded, innovator biologics.

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CVS is borrowing a near-record $40 billion to bankroll a deal that hasn’t even been approved

CVS Health plans to sell $40 billion of bonds in order to finance its massive $69 billion acquisition of Aetna.

The sale marks the biggest corporate debt financing in more than two years, and the third-largest in history. And it comes at a tough time for the investment-grade fixed-income market, which is off to its worst start to a year in decades.

CVS’ large bond offering will take place with interest rates still close to historical lows. That will soon change, however, as the Federal Reserve continues to tighten monetary policy. The prospect of higher rates explains why CVS decided to act now, with rates still relatively attractive.

All of the notes besides the 30-year bond being offered will include a special mandatory redemption clause, which will require CVS to withdraw the debt at 101 cents on the dollar if the Aetna deal doesn’t close by September 3, 2019, according to a Financial Times report.

It’s a calculated risk, considering the company’s acquisition of Aetna hasn’t yet received regulatory approval.

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Joe Ciolli
Mar. 6, 2018, 10:29 PM

Patients, Government Face Increasing Healthcare Costs With DIR Fees, Rep. Collins Said

Conferences > NCODA Spring Forum 2018 – Published on: March 02, 2018
Patients, Government Face Increasing Healthcare Costs With DIR Fees, Rep. Collins Said
Laura Joszt
Coverage from the National Community Oncology Dispensing Association Spring Forum 2018.
Direct and indirect remuneration (DIR) fees have been a growing concern for community pharmacists, and pharmacists who haven’t had an issue with them yet will run into them soon, said Representative Doug Collins, R-Georgia, who was the keynote speaker at the National Community Oncology Dispensing Association Spring Forum 2018, held March 1-3 in Dallas, Texas.

Collins focused his discussion on DIR fees and how they are increasing costs for the patient—by pushing them into the donut hole and catastrophic coverage in Medicare—and for the healthcare system. In addition, since Medicare patients are being pushed into catastrophic coverage, CMS has to pick up the extra costs, which means the taxpayer is spending more.

In general, DIR fees to pharmacy benefit managers (PBMs) are driving up costs, and Collins said research has found that the average community pharmacist loses $83,000 a year on DIR fees alone. The problem is that the industry is on track for a situation where PBMs begin to either kill off community pharmacies or they buy other PBMs and consolidate even further.

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Laura Joszt

CVS-Aetna Merger Proposal Emblematic of Growing Arms Race to Consolidate, Control Consumer Access to Health Care, Prescription Drugs

The Senior Care Pharmacy Coalition (SCPC) today said the proposed merger between pharmacy giant CVS Health and health insurer Aetna represents a dangerous step towards governmental acceptance of an increasingly integrated, consolidated, oligopolistic health care system – flying in the face of the free market principles that define the American economy and allowing a shrinking number of “mega-companies” to control every aspect of Americans’ health care.

“The proposed CVS Health-Aetna merger is emblematic of the growing arms race to consolidate and control consumers’ access to prescription drugs,” warned Alan G. Rosenbloom, President and CEO of SCPC, the only federal advocacy organization devoted exclusively to the interests of the nation’s LTC pharmacies and the patients they serve.

“The merger proposal has dramatic, negative ramifications for consumer access to affordable prescription drugs,” he said, commenting on today’s House Judiciary Subcommittee hearing on “Competition in the Pharmaceutical Supply Chain” and the proposed CVS Health-Aetna merger. “Further merger and acquisition activities, rapidly accelerating vertical and horizontal integration and growing secrecy threaten the nation’s commitment to free and fair markets — and Congress, the Federal Trade Commission (FTC) and the Department of Justice (DoJ) must carefully scrutinize this CVS Health-Aetna proposal.”

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Senior Care Pharmacy Coalition
Feb 27, 2018, 14:19 ET

Health Care Policy: PBMs’ Medicaid Role Under Attack in Some States

February 8, 2018 reported by The Capitol Forum

The Medicaid role of Express Scripts, CVS/Caremark and other pharmacy benefit managers is under siege by Appalachian state legislators proposing bills that would curb or stop entirely a reliable revenue stream for the companies.

In Ohio and Kentucky, legislators proposed bills last month to replace PBMs with state agencies in performing the most important duties in managing the Medicaid recipients’ prescription benefits. West Virginia’s state Medicaid agency didn’t wait for legislation and last year unilaterally ended PBMs’ role in the program.  Read more …


CVS/Aetna: State Regulators Urged to Investigate CVS Caremark Reimbursement Cuts, Solicitation Letters, as Part of Aetna Review

Independent pharmacists are urging state insurance regulators – as part of their reviews of the CVS/Aetna merger – to examine CVS Health’s recent move to slash smaller rivals’ prescription reimbursements and then offer to buy their stores.

The reimbursement cuts, some of which involved drugs used to treat digestive illnesses and other chronic conditions, occurred around October 25—five weeks before the December 3 Aetna deal announcement, a dozen independent pharmacists said. The cuts affected pharmacies in a number of states, including Florida, Kansas, Maryland, Ohio, Washington, and Wisconsin.  Read more …

Reported by The Capitol Forum on January 12, 2018

By Ivan Kelly

The Proposed CVS–Aetna Merger Could Threaten Patient Privacy

Aetna is notable for not selling anonymized patient data—but CVS, like many pharmacy chains, does.

The proposed merger between pharmacy chain CVS and insurer Aetna would give the new combined company greater leverage to engage in a commercial trade in patient data that is largely hidden from the public but completely legal.

Prior to the proposed merger, Aetna was notable among leading insurers for not selling anonymized patient data. By contrast, CVS, like many pharmacy chains, has long sold and traded prescription records without patient names to medical data mining companies such as IMS Health, which in November renamed itself IQVIA.

“Business being business, I’d be shocked if Aetna’s conservative policies weren’t relaxed following completion of the merger,” said Tom Russell, the former chairman of IMS, long the dominant medical data mining company.

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  • By Adam Tanner on December 14, 2017
  • Scientific American

Insurance not always the best deal for prescription drugs

Just because a prescription is covered by insurance doesn’t mean that you’ll be paying lessfor them. In fact, you might be paying more, according to a New York Times/ProPublica report. The review found Americans may be overpaying for as much as one in every 10 prescriptions by using their insurance instead of seeking out an alternate source and paying cash.

The report said that the “shocking” revelation that individuals can do better for themselves than the drug prices negotiated by their insurers is revealing a problem that is far more complex than “the seemingly simple act of buying a bottle of pills.” It adds, “[A] host of players—drug companies, pharmacies, insurers and pharmacy benefit managers—are taking a cut of the profits, even as consumers are left to fend for themselves.”

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