GPhA APPLAUDS GOVERNOR KEMP FOR SIGNING FIRST-IN-NATION PBM LEGISLATION PROTECTING PATIENT CHOICE, ACCESS TO THEIR PREFERRED PHARMACY
Georgia Pharmacy Association
Monetary Penalties for Steering Patients to PBM-Owned Pharmacies, Prohibiting Pharmacy Drug Reimbursements Based on Patient Outcomes and Public Availability of Drug Pricing Included in New Laws
SANDY SPRINGS, GA (August 6, 2020) – In a culmination of General Assembly efforts to reign in practices of pharmacy benefit managers (PBMs) and their affiliated pharmacies, Governor Brian Kemp signed a new package of bills into law that would protect patients’ choice of pharmacy and increase public access to drug pricing information by requiring online drug price reporting.
“This legislation represents one of the most comprehensive and forward-thinking pieces of legislation in the country and will help preserve patients’ right to choose their pharmacy, protect them and their providers from unscrupulous practices and save taxpayers money,” said Georgia Pharmacy Association CEO Bob Coleman. “GPhA and our members are grateful to Governor Kemp, Lt. Governor Duncan, Speaker Ralston, Representatives Knight, Cooper, and Hatchett as well as Senator Burke for their
leadership and commitment to Georgia’s patients and providers.”
The new law strengthens already groundbreaking state legislation passed in 2019 designed to rein in the unchecked power PBMs have exhibited over patients and providers. Highlights of the newly-enacted laws include:
• HB 918: Strengthens existing anti-steering provisions which prohibit pharmacies affiliated with PBMs from filling and billing for prescriptions illegally referred by PBM affiliates and applies these restrictions to pharmacies affiliated with Medicaid managed care companies. HB 918 also strengthens the Pharmacy Audit Bill of Rights, significantly curtailing PBM audit practices that often disrupt patient care and can result in steep financial penalties for pharmacies without right of appeal.
• HB 946 & SB 313: Representing a comprehensive rewrite of Georgia’s PBM code section, these companion bills strengthen oversight and enforcement of PBMs including innovative first-in-the-nation provisions such as reporting of drugs paid 10% above and 10% below National Average Drug Acquisition Cost (NADAC) every four months and making reports publicly available online; and prohibits PBMs from tying a pharmacy’s drug reimbursement to a patient’s health outcomes. The bills also require PBMs to offer drug coverage plans that do not include spread pricing and plans that allow plan sponsors to receive 100% of rebates negotiated by PBMs and imposes a first of its kind PBM surcharge when PBMs engage in certain practices.
In recent years PBMs have come under close, critical scrutiny for their “middlemen” role between the health plan sponsor, the patient and the provider. Iron-clad contracts between PBMs, pharmacy provides and plan payers including state governments, have allowed PBMs to operate with little oversight and kept many practices - including the use of gag clauses, spread pricing and holding onto to part or all of drug maker rebates instead of passing them on to the plan or patient – secret until recently.
The State of Georgia has become one of the leaders of state-level, groundbreaking PBM reform and was the first state to successfully legislate and regulate the steering of patients away from their own pharmacies to PBM-owned pharmacies.
Georgia Pharmacy Association (GPhA) represents Georgia’s pharmacists, pharmacy technicians, and advocates on behalf of their patients. GPhA has been actively involved in the enhancement of the practice of pharmacy and pharmacy patient care since 1875.
Click here for an official copy of GPhA's press release
Click here for a breakdown of HB 946 & SB 313
The National Law Review
On July 24, 2020, President Trump signed four Executive Orders related to drug pricing that direct the Secretary of Health and Human Services (HHS) to take a number of actions aimed at lowering prescription drug prices. These HHS actions generally are not expected to apply directly to employer-sponsored group health plans. However, the Executive Order on “Lowering Prices for Patients by Eliminating Kickbacks to Middlemen” (the Order) could have an indirect impact on such plans, or provide an indication of things to come.
The Order directs HHS to finalize a proposed rule that would (1) remove safe harbor protections for, among other things, remuneration that drug manufacturers provide to health plan sponsors, pharmacies or pharmacy benefit managers (PBMs) in operating the Medicare Part D program and Medicaid managed care organizations, and (2) establish a new safe harbor that would permit the same entities to apply discounts at the patient’s point of sale in order to lower participant out-of-pocket costs.
As mentioned, the proposed rule applies to Medicare Part D and Medicaid managed care organizations, and does not directly impact employer-sponsored pharmacy benefit plans. However, given the impact on PBMs, if the proposed rule is finalized, it could impact how rebates are offered in the employer marketplace. In addition, although changes to pharmacy rebates for employer-sponsored pharmacy benefit plans would require federal legislation, employers should monitor Congress’ actions and be prepared for changes that impact rebates or the marketplace.
Finally, note that the Order directs HHS to confirm that the proposed rule will not increase federal spending, Medicare beneficiary premiums or out-of-pocket costs for patients. These conditions make it significantly less likely that the proposed rule will take effect. Prior to the Order, HHS had withdrawn the proposed rule following a Congressional Budget Office finding that it was expected to cost taxpayers $177 billion over the next decade and would have raised premiums under Medicare Part D.
The other Executive Orders do not directly impact employer-sponsored health plans, but aim to change the prescription drug marketplace, and could have a far-reaching impact. These Orders aim to allow the importation of drugs from other countries at favorable prices, make EpiPens and insulin more affordable for patients of community-based health centers, and apply “most favored nation” status for the United States, which would tie the prices that Medicare pays for drugs to the prices other countries pay. It likely will take considerable time for HHS to implement these initiatives.
President Donald Trump announced new policies Friday aimed at lowering prescription drug prices under Medicare by linking them to rates paid in other countries and allowing Americans to buy medication imported from Canada.
The changes are included in executive orders that come as Trump seeks to repair his standing on health-care issues, particularly with senior voters. Polls have shown sentiment is souring over his handling of the coronavirus pandemic and efforts to eliminate the Affordable Care Act without having a ready replacement.
Related: How states could take the lead on drug price reform
The president also announced a new policy to require federally qualified health centers to pass discounts they receive on insulin and EpiPens directly to their patients, and a drug rebate rule that removes legal shields for reimbursements paid by drugmakers to middlemen and insurers.
The orders “represent the most far-reaching prescription drug reforms ever issued by a president,” Trump said at an event in Washington. They will “completely restructure” the prescription-drug market, he said.
Democrats and drugmakers quickly pushed back. House Speaker Nancy Pelosi said the moves “take no real action” to lower prices and will put Medicare beneficiaries at risk of higher premiums. Industry lobbyist Stephen Ubl, head of the Pharmaceutical Research and Manufacturers of America, called the pricing policy “radical and dangerous.”
The order tying prescription-drug prices to international benchmarks, which Trump described as the “most favored nations” clause, won’t go into effect until Aug. 24 to give drugmakers time to come up with alternative measures for lowering costs, Trump said. Several top pharmaceutical companies have requested a meeting on the issue, which will be held on Tuesday.
$17 billion savingsThe international drug price rule is the only policy backed by the administration that would boost the government’s ability to decide what it will pay for medications. Health officials estimate the policy change proposed by Trump will save Medicare $17 billion in the first five years. In 2018, Medicare spent $335 billion on prescription drugs, a 2.5% rise from the previous year.
“We pay for all of the resources and all of the development and foreign countries pay absolutely nothing,” Trump said. “Americans are funding the enormous cost of drug resource for the entire planet.”
Trump’s plan to import cheaper drugs from Canada is less likely to be effective. Canada’s pharmaceutical market is likely not big enough to satisfy the U.S. demand for drugs.
Secretary of Health and Human Services Alex Azar said that personal importation of insulin would be allowed, after not allowed last year under the previous importation proposal.
Rebate ruleTrump also revived his drug rebate rule, stripping legal shields for reimbursements paid by drugmakers to middlemen and insurance plans providing coverage through Medicare’s Part D drug program or Medicaid.
Those payments create incentives for higher drug prices, drug companies have argued, because they push companies to raise prices in order to meet discount demands by drug middlemen. Instead of middlemen receiving discounts based on the price of drugs, they’d get a fixed fee under the policy change.
The pharmaceutical industry supported the plan, which was one reason for its initial demise. Trump was also apparently concerned in the past that the policy would raise insurance premiums. Lawmakers criticized the rule for its massive price tag too. It would cost taxpayers $177 billion over a decade, according to the Congressional Budget Office.
Jon Conradi, an outside spokesman for the Campaign for Sustainable Rx Pricing, which represents insurers, pharmacy benefit managers, and hospitals, lambasted Trump for bringing it back to the table.
“A reboot of the Rebate Rule, after the administration’s own admission it would increase premiums on Medicare beneficiaries and cost taxpayers hundreds of billions, would be a stunning cave to Big Pharma at the expense of American seniors and taxpayers,” Conradi said before the executive order was announced.
Discount programThe plan to use the federal drug discount program, known as 340B, for hospitals to get cheaper insulin and EpiPens is also new. The 340B program requires drug companies that want to sell their drugs through state Medicaid plans to offer steep discounts to hospitals that serve primarily low-income patients. The program has grown considerably in the last few years. Continue Reading
To read a copy of the President's Executive Order on 'Eliminating Kickbacks to Middlemen' click here
Ohio Capital Journal
Federal officials are probing actions taken in Ohio in 2017 by the largest Medicaid managed care provider in the United States, a source familiar with the investigation has told Ohio Capital Journal.
The U.S. Centers for Medicaid and Medicare Services declined to confirm or deny the existence of an investigation. But the source said the agency is looking into a finding by a consultant hired by the state to analyze billions of dollars in drug transactions in the state’s Medicaid managed-care program during 2017 and 2018.
The finding raised questions about whether Centene — a company which is not well known but is a huge player in state Medicaid programs — effectively billed the state for duplicate services while working with another of the nation’s largest corporations, CVS Health.
The potential problems found in Ohio would not be the first for Centene, The company already has faced more than $23 million in fines and lost incentives over separate issues with its performance in more than a dozen state Medicaid programs, the Des Moines Register reported in 2018.
Loads of hidden money
As with most other states, Ohio’s $26 billion Medicaid program is mostly privatized. And some of the corporations that contract with the agency have long been accused of using their size and a lack of transparency to take outsized profits from a Medicaid system that is known for underpaying providers such as doctors, hospitals, dentists and pharmacists.
Experts say it’s especially critical now to make sure corporations aren’t extracting excessive profits from Medicaid, something they’ve been increasingly accused of in a rapidly consolidating marketplace. That’s because the global coronavirus pandemic is driving large numbers of new patients onto the Medicaid rolls even as the disease is squeezing the economy and sapping tax revenue to pay for the program.
The state’s Medicaid caseloads had dropped in all but two of the 18-months leading into 2020, but then they expanded rapidly when the new coronavirus hit. After increases of fewer than 10,000 in January and February, they leapt by 25,000 in March and 94,000 in April, the latest month for which data are available.
The Ohio Department of Medicaid contracts with managed-care companies to coordinate health care for almost 90% of the roughly 3 million patients in the program.
The companies, in turn, contract with doctors, hospitals and other providers. They also contract with pharmacy benefit managers, which decide what drugs get covered and how, determine pharmacy reimbursements, leverage manufacturer rebates, reconcile pharmacy claims and provide other services.
Pharmacy benefit managers, or PBMs, fight hard to keep information about how they determine drug reimbursements secret. But in the summer of 2018, The Columbus Dispatch obtained confidential reimbursement information from 40 pharmacies. It showed that the two PBMs — CVS Caremark and OptumRx — serving Ohio Medicaid’s five managed-care organizations were charging the taxpayer-funded managed-care companies a lot more for drugs than they were paying the pharmacies that had bought them and dispensed them to patients.
Then, under political pressure, the Medicaid department got the PBMs to cough up all of their reimbursement data between April 1, 2017 and March 31, 2018, and hired the consulting firm HealthPlan Data Solutions to analyze it.
Perhaps the biggest finding was that the pharmacy-benefit managers serving Ohio Medicaid charged managed-care companies such as Buckeye almost a quarter-billion dollars more for drugs than they paid the pharmacies that had dispensed them.
But in addition to that eye-popping number, the analysis also found that one of the state’s five managed-care plans, Buckeye Health, paid its PBM, CVS Caremark, through Envolve, a “pharmacy benefit administrator.”
There is a close relationship between Buckeye and Envolve. Both are owned by St. Louis-based Centene, which represents 13% of Americans enrolled in Medicaid managed-care plans. That makes Centene, No. 42 on Forbes’ Fortune 500, the largest Medicaid managed-care company in the United States. Continue Reading..
Robert Stanley calls his son Payton "a multi-million-dollar man." Before Payton was even born he had a stroke in his mother's womb during the third trimester. At two months old, he began having seizures, at times more than 100 in a day. He's had a portion of his brain removed. Today, at age five, he requires a specialized breathing treatment and cannot walk. The family makes regular trips from their home in Vinita, Oklahoma, to Memphis' LeBonheur Children's Hospital, which is widely recognized for its pediatric neurology and epileptology care. Stanley has worked two jobs so that Payton's mother Stephanie can stay home full time. Payton requires 30 medications every day, many of which cost, in Stanley's words, an "extremely stupid" amount of money.
I called Stanley last month to talk about the cost of one medicine in particular. Acthar is an injectable drug manufactured by St. Louis-based Mallinckrodt Pharmaceuticals and used to treat infantile spasms. Payton was on it for eight months in 2015. Disappointed with the pediatric care they found in Oklahoma, where doctors had misdiagnosed Payton, the family had made their first trip to LeBonheur. The doctors there diagnosed Payton with infantile spasms and prescribed Acthar. And despite the litany of high-cost medications that have been prescribed to Payton over the years, the sticker shock that came with Acthar still sticks in Stanley's memory.
"I heard about the price when I went to go pick up the medicine. I asked the representative that night, 'How much is this stuff?'"
The representative's answer: "Fifty-thousand dollars a vial."
"I about had a heart attack," Stanley told me.
A standard Acthar treatment lasts a month and requires two to three vials. Payton ended up being on the drug for eight weeks.
Fortunately, the family's insurance covered the treatment, though it ended up being ineffective for Payton, who had to eventually have a portion of his brain removed in order to treat the seizures. At least they hadn't been bankrupted by Acthar.
However, someone had to pay for those $50,000 vials. And about a year after Stanley first heard of Acthar, it also came to the attention of Larry Morrissey, then the mayor Rockford, Illinois. Like Stanley, Morrissey couldn't believe the price. Unlike Stanley, Morrissey's city actually had to pay.
Rockford is a city of about 150,000 people, 90 miles west of Chicago. Like a lot of Midwestern cities, it has suffered from crime, depopulation and an image problem, occasionally ranking high on those dubiously researched "Worst Places to Live" articles. Morrissey, a Democrat, was elected on an agenda of cost saving and infrastructure improvements. One of those cost-saving initiatives was to find out exactly how much the city, which funds its own health plan for municipal workers, was spending on health care. In 2016, the auditors noticed something unusual: The previous year, the city had spent nearly half a million dollars on a drug called Acthar. Only two people on the city's health plan took the injectable drug, and between them they took a total of just nine vials. That came out to more than $54,000 a vial.
"These are funds that could have been directed to public infrastructure, economic development or crime reduction," Rockford spokesperson Laura Maher says. "[Half a million] is equivalent to approximately five police officers annually."
In the year 2000, a vial of Acthar sold for just $40. The two-decades-long story of how this drug saw its price increase from $40 to $54,000 is riddled with allegations of kickbacks, sketchy marketing and a "murky alliance" between a drug manufacturer and America's biggest pharmacy benefit manager. Key to the story are two of St. Louis' biggest corporations.
In 2017, Rockford filed a lawsuit against the drug's manufacturer, St. Louis-based Mallinckrodt, and the drug's sole distributor, Express Scripts, which also has its headquarters in St. Louis. Rockford's suit accuses the two companies of colluding to artificially raise the price of the drug. It also accuses Mallinckrodt of essentially paying doctors to prescribe Acthar even when cheaper, more suitable drugs were available.
The RFT reached out to Mallinckrodt and Express Scripts for comment. Representatives of both entities replied that they cannot comment on pending litigation.
U.S. Magistrate Judge Iain D. Johnston, who is handling the early portion of the Rockford case, wrote in a pre-trial opinion, "The issues at stake in these cases are large ... [T]he potential amount in controversy is extraordinary. The cases contain racketeering and antitrust claims, which, if successful, could lead to huge damage awards. In today's legal vernacular, these are 'bet the company' cases."
From a pig's gland to a $6 billion company
Acthar is the brand name for the naturally occurring adrenocorticotropic hormone (ACTH). In the 1940s, physician Philip Hench and chemist Edward Kendall discovered it could be extracted from the pituitary gland of a pig (usually after the rest of the pig had been butchered for meat) and injected into a human. ACTH causes humans to create more cortisone, which reduces inflammation, and for decades Hench and Kendall's discovery worked wonders for people who suffered from rheumatoid arthritis. The two men later won a Nobel Prize in Physiology or Medicine for their work.
But as decades passed, advances in medicine led to other anti-inflammatory therapies, such as Prednisone, which can be manufactured cheaply and don't come with the inevitable trace impurities that are extracted from a pig's gland along with ACTH.
By the 1990s, ACTH was no longer the preferred treatment for anything except infantile spasms, or IS, a form of epilepsy that is as rare as it is serious.
Pediatric neurologist Jim Wheless told me that there are about 2,000 new cases of IS a year. "If these kids are not treated timely with effective medication, then almost all of them will go on to have significant mental impairment," he said.
Wheless added that when it comes to treating IS, there are really only two FDA-approved medications, and of those two Acthar has been clearly shown to be superior, with an efficacy rate of about 90 percent.
"If it was your child or your grandchild and I'm sitting across the table saying, 'Gosh, if we don't jump on this and treat this effectively, the child is probably going to have significant mental challenges the rest of their life. There's only two medicines, and this one works better — what do you want to do?'" Wheless said. "You can guess what most families are going to opt for."
Wheless added, "Now, what if I tell you that the ideal medication is so expensive you have to mortgage your house? Or that you can't have a house?"
But a single vial of Acthar didn't always cost more than a down payment on a starter home.
In the 1990s, Acthar was a product of Aventis Pharmaceuticals, the only company producing ACTH of any kind. At that time, a vial of Acthar from Aventis cost about $40, and the low incidence of infantile spasms combined with the low price meant that Aventis lost money on the drug. They tried to stop producing it in the 1990s, but pediatricians intervened, saying that without Acthar parents whose children suffered infantile spasms would be without an important treatment.
In 2001, Aventis sold Acthar to California-based Questcor for just $100,000, making Questcor the only source for the first-line drug against infantile spasms. The company used this monopoly to essentially set its own price. Right after acquisition, Questcor raised the price of Acthar from $40 a vial to close to $800 a vial. The price grew steadily from there. By 2007, insurance companies and Medicare were paying nearly $2,000 a vial.
But that was just the beginning. In 2007, Don Bailey became CEO of Questcor. Over the next thirteen years, the "one-drug company" turned that one drug into a $6 billion business.
During the first year of Bailey's leadership, Questcor struck a deal with Express Scripts, making the St. Louis-based pharmacy benefits manager the sole distributor of Acthar.
Over 80 million people get their medications through Express Scripts, a buying volume that gives the company considerable power to negotiate lower prices from drug companies. The company regularly posts revenues of more than $100 billion a year.
However, Rockford's suit alleges, because of the exclusive distribution deal Express Scripts inked with Questcor, the e-pharmacy had no incentive to negotiate for a lower price and therefore did not do so.
In the months following the Questcor deal with Express Scripts, the price of Acthar went from $2,000 a vial to more than $29,000 a vial.
Eric Liebler was a senior vice president at Questcor around the time of the Express Scripts deal. Though he wasn't involved in the deal with the e-pharmacy, he was privy to the company's conversations about dramatically increasing the price of Acthar. He told me that prior to the deal the company drafted two plans for how it could increase the drug's worth.
Option one was to do a lot of research on Acthar, find new uses for it and, while doing so, raise the price gradually over several years in a way commensurate with the increased number of uses.
"Option two was, 'Let's just do it all at once,'" Liebler said. "You're going to get yelled at for raising the price no matter what you do, so go from $1,500 right up to $21,000."
Liebler says he recommended the first approach, doing it gradually. The company went with the second, dramatically raising the price in short order.
"I helped them write the press release, but then I resigned immediately," Liebler said. "There are many companies who have played the price-increase game, but I'd never seen anything like this at this magnitude."
By 2012, insurance companies were increasingly dubious about both the price of Acthar and its efficacy. Health insurer Aetna reduced reimbursements for Acthar, a spokeswoman telling Reuters at the time, "The decision was based on the lack of clinical evidence that the drug is more effective than existing steroids."
In the wake of Aetna's announcement, Questcor's stock price dropped by 40 percent.
However, good news for Questcor and their shareholders came in 2014 when St. Louis-based Mallinckrodt Pharmaceuticals paid Questcor $5.9 billion as part of a merger between the two companies. The merger raised eyebrows. At the time, Questcor was the subject of two federal whistleblower complaints, a Securities and Exchange Commission investigation related to the marketing of Acthar and an ominous 2012 New York Times article that highlighted the extreme price increase. "I have a Cadillac in my refrigerator," says one Acthar patient quoted in that article, referring to an unused 5 ml vial.
One month after the merger, Bailey, the Questcor CEO whose tenure coincided with most of Acthar's price increase, sold almost a quarter million shares of Mallinckrodt, worth nearly $19 million, according to stock market tracking tool Wallmine. Bailey also joined Mallinckrodt's board of directors.
"Most of the Questcor people who stayed when I was uncomfortable, they became very rich, ungodly amounts of money," Liebler said. "Their [stock] options were back at 40 cents, 80 cents, and they probably sold at one hundred bucks. When I write the checks for my daughter's college, I know that would have been easier financially to stay. But I did the right thing."
The controversy and litigation stemming from Acthar, its pricing and marketing have only increased since Mallinckrodt's $6 billion acquisition.
While the data supporting Acthar as an effective treatment for infantile spasms is strong, the market for IS treatments is limited given the rarity of the disease. Wheless, the pediatric neurologist, said that he also believes given Acthar's price it's only a matter of time until alternative, cheaper treatments for IS appear on the market.
Seeking to expand the market for Acthar, Questcor and Mallinckrodt have both promoted it as a treatment for conditions other than infantile spasms, and at times these promotions have drawn accusations that the drug is being promoted in ways outside its FDA approval.
n 2016, a man named Barry Franks who had worked in sales for Questcor and later Mallinckrodt filed a lawsuit against the company claiming that he was fired for not selling Acthar to doctors based on uses that were not FDA approved. Acthar is FDA approved as an additional treatment for acute flare-ups of rheumatoid arthritis, or RA, but Franks claimed salespeople were incentivized to promote the drug and encourage refills as a long-term therapy to manage RA. Express Script's own prior authorization process stated that in treating rheumatic disorders, Acthar is only approved for "short term administration for an acute episode."
Furthermore, Franks' suit claimed the salaries for Mallinckrodt's sales staff were pegged directly to their ability to push Acthar to doctors as a long-term RA treatment. In addition to base pay, salespeople took part in an "Incentive Bonus Plan" — according to Franks this was referred to within the company as the "Rheum Incentive Plan" — through which salespeople could potentially earn more than their base salary.
Meanwhile, by 2018, four years after Mallinckrodt acquired Acthar, the price of one vial reached $40,000.
In addition to what Acthar is promoted as a treatment for, there are also considerable concerns about who is doing the promotion. Continue Reading
The Supreme Court of The United States (SCOTUS) has rescheduled the Rutledge v. The Pharmaceutical Care Management Association (PCMA) hearing for October 6, 2020.(1) The initial April hearing date had been postponed due to the coronavirus disease 2019 pandemic (COVID-19).(2)
Rutledge v. PCMA revolves around whether states have the right to regulate pharmacy benefit managers (PBMS). Arkansas Attorney General Leslie Rutledge has petitioned the court to overturn the US Court of Appeals for the Eight District’s earlier decision to maintain Arkansas’ statute regulating PBMs’ drug reimbursement rates. In a legal brief filed in February 2020, however, Rutledge argues the statute is preempted by the Employee Retirement Income Security Act of 1974.3
At least 4 pharmacy groups, The American Pharmacists Association, The Arkansas Pharmacist Association, The National Alliance of State Pharmacy Associations, and the National Community Pharmacists Association have publicly expressed their support for states’ rights to regulate PBMs.3 According to an earlier report, these 4 groups have jointly argued that unregulated PBM business practices limits access to pharmacists care and prevents the optimal use of medications.(3)
In April 2020, the Academy of Managed Care Pharmacy (AMCP) filed an amicus brief in support of the Eighth District’s decision.4 The brief argues that ruling in favor of Rutledge will drive up health care costs, and also will have a big effect on patients too by limiting their ability to access affordable medications, hindering health outcomes.(4)
The AMCP brief also argues that ruling in favor of Rutledge can lead to issues at the administrative level, and can lead to varying and possibly contradictory state laws as well.4
Yost’s new lawsuit vs. PBM could be one of many shoes dropping in battle over drug price accountability
The Columbus Dispatch
At the beginning of last year, Ohio Attorney General Dave Yost observed that he often gets asked whether another shoe would drop in the state’s battle to rein in drug chain middlemen known as pharmacy benefit managers.
’Baby, we’re in DSW,” Yost remarked, referring to the giant shoe store chain.
He had just taken action against OptumRX, accusing the PBM of overcharging the Ohio Bureau of Workers’ Compensation by some $16 million.
But a year and a half went by and nothing new came from the attorney general’s office except motions in the workers’ comp suit. Still, the office insisted the effort continued with investigatory work behind the scenes.
Monday the probe burst into public view with a 17-page lawsuit from Yost’s office accusing PBM Express Scripts of “silently pocketing millions of dollars in overcharges” on prescription drugs through the Ohio Highway Patrol Retirement System.
“I intend to shed light on the PBM business model and bring true transparency – they need to answer the tough questions and repay what they owe,” Yost tweeted.
The PBM repeatedly violated its health-care agreement with the retirement fund “by not dealing truthfully, accurately and honestly with it,” says the lawsuit filed in Franklin County Common Pleas Court.
“This particular PBM egregiously charged for services it didn’t deliver,” Yost said in a release. “Its repeated breaches cost Ohioans millions, and we want our money back.”
Jennifer Luddy, director of corporate communications for Express Scripts, said the company would not comment on the lawsuit or Yost’s remarks about it.
Scott Knoer, CEO of the American Pharmacists Association and formerly of the Cleveland Clinic, tweeted: “Bravo to Ohio’s dragon slayer @yost4ohio for working to bring taxpayer justice to yet another egregious PBM contract that this time soaked the Ohio Highway Patrol Retirement System. The PBM drug pricing games must to come to an end!”
Yost’s lawsuit comes on the heels of the Ohio Department of Medicaid’s failure to meet a July 1 legislative deadline to ready the state for a single PBM, instead of the three now serving the agency that provided health coverage for the poorest Ohioans. The agency also missed the legislature’s deadline to use $100 million allocated to subsidize community pharmacies serving low-income clients.
Express Scripps Inc. is now part of Cigna’s Health Services segment, which reported $70.8 billion in adjusted revenues for the nine-month period ending Sept. 30, 2019, according to Yost’s office.
The PBM had claimed “that through its ‘solutions’ it can ’deliver better value″ to its pension system clients” like the Ohio pension fund.
“But defendant ESI’s ‘solutions’ only served defendant ESI as it repeatedly breached the agreement to drive up plaintiff HPRS’s costs by overcharging plaintiff HPRS,” the lawsuit alleges.
Those contract breaches “were committed knowingly in bad faith and with the intent to deprive plaintiff HPRS of the benefit of its bargain and to frustrate its reasonable expectations under the agreement” between the pension fund and Express Scripts, the court filing said.
One tactic used by the PBM cited in the litigation: It “repeatedly misclassified and/or continued to classify generic drugs as brand drugs.” Brand-name drugs typically cost many times more than generics.
A specific amount of damages was not sought. Since only Express Scripts has the full financial records, Yost’s office asked the judge to order them produced so they can be examined to determine the full extent of damages to Ohio.
“It’s no secret that PBMs have been keeping secret their prescription pricing in order to evade public scrutiny and rake in revenue,” Yost said. “I intend to shed light on their business model and bring true transparency to the process — they need to answer the tough questions and repay what is owed.”
And now Ohioans will wait to see if Yost has more shoes ready to pull out of the DSW warehouse — such as possible action against PBMs for Ohio’s other four state retirement funds. They are all far bigger than the pension fund serving the Highway Patrol, so the potential damages by PBMs presumably could be far bigger as well.
The Albany Herald
ATLANTA -- State Rep. David Knight had a triumphant look Friday when talking about his quest for more oversight and restrictions on the PBM industry.
Pharmacy Benefit Managers are basically corporate middlemen between health insurers or large employers and drugmakers in handling pharmaceutical benefits. The Georgia General Assembly approved a group of bills to rein in how PBMs operate.
“I think these bills probably are the most comprehensive PBM reform legislation in the nation,’’ said Knight, a Griffin Republican. He has arguably been the biggest legislative critic of these entities, and he led the push for the new measures.
The restrictions included closing current loopholes on laws prohibiting PBMs from steering patients to certain pharmacies. They create new oversight over government health care contractors, and provide more transparency on prescription pricing.
The atmosphere at the Capitol in Atlanta on Friday was a vivid contrast to such concluding days in past General Assembly sessions. The typical circus-like gathering of lobbyists, relatives of lawmaker and visitors clogging the halls gave way this year to mostly empty corridors.
COVID-19 fundamentally changed the logistics of the legislative session, causing a hiatus that stretched into months. Yet over the last two weeks, after lawmakers finally reconvened, they produced several important bills involving health care and a budget that had milder cuts to vital programs than had been feared.
For at least five years, proposals to curb surprise medical billing have run into intractable deadlocks in the Legislature. Not so this year.
House Bill 888, which passed both chambers, addresses surprise billing that occurs after elective surgery or emergency care, when the facility itself is in the patient’s insurance network but the ER physician, anesthesiologist, radiologist or pathologist is not. In such cases, the patient gets a separate, unexpected bill from that out-of-network doctor, a bill that can reach into the thousands of dollars.
The legislation won’t apply to people covered by large, self-insured employers.
Another bill, sponsored by Rep. Mark Newton, R-Augusta, who’s a physician, establishes a rating system that patients could use to determine which physician specialty groups in their insurer’s network serve a specific hospital.
Newton’s bill applies to anesthesiologists, pathologists, radiologists and emergency room physicians – doctors often responsible for the most cases of surprise billing.
SENIOR CARE: Legislation to impose new oversight and staffing requirements on senior care facilities passed overwhelmingly. The House unanimously signed off on the Senate’s version of the bill, which added requirements for handling COVID-19 to the bill’s reforms of the senior care industry.
“I am so proud of Georgia’s House and Senate for making the necessary changes to ensure the safety of our seniors who choose to live in assisted living facilities,” said Rep. Sharon Cooper, R-Marietta, the lead sponsor of the bill.
MATERNAL MORTALITY: Georgia will get more financial resources to lower its high rate of maternal mortality. That’s defined as the death of a woman while she is pregnant or within one year after the end of her pregnancy, from any cause related to or aggravated by the pregnancy or its management.
House Bill 1114 authorizes the state to apply for a federal waiver that would allow Georgia to offer Medicaid coverage to eligible women up to six months after they give birth. The current Georgia Medicaid program permits coverage only up to two months.
LIABILITY PROTECTION: The General Assembly passed legislation aimed at shielding businesses and health care providers from lawsuits filed by people who have contracted coronavirus since March. The bill would shield companies from legal liability unless they show “gross negligence, willful and wanton misconduct, reckless infliction of harm, or intentional infliction of harm.”
Los Angeles Sentinel
African Americans in California face significant disparities in diagnosis, treatment, and access to health care they need. The recent COVID-19 pandemic has only exacerbated many of those inequalities. Our lawmakers have again expressed their desire to seek solutions to health disparities and rising health costs once the pandemic ceases, but action is needed. As California waits for the number of cases of COVID-19 to stabilize and, ultimately, for the state to lift its emergency orders, we urge policymakers to pursue sustainable solutions that reduce costs and create better long-term health outcomes for vulnerable communities.
In communities of color, rising health care costs have increased the likelihood of developing life-threatening diseases like heart disease, diabetes, and cancer. Treatments for many of these conditions have become unaffordable for Los Angeles families due to health care industry middlemen who manipulate drug pricing to increase their bottom line.
Though little known to the general public, pharmacy benefit managers (PBMs) are one of the most powerful players in health care. PBMs are middlemen who negotiate drug prices with pharmaceutical manufacturers on behalf of health insurers. These negotiations determine what treatments are available on your insurance plans. The role of the PBM was initially to provide the best pricing and pass the savings onto the consumer. The reality is that PBMs, who operate with little transparency, exploit the current drug rebate system to increase their profit margins on the backs of patients.
A report from the California Department of Managed Health Care found that CA health plans and pharmacy benefit manager profits are the leading cause of insurance premium spikes. More specifically, profits from California health insurance companies rose by 172 percent in just one year while insurance premiums increased by 6.2 percent. All while manufacturers have given more than $1 billion in rebates that PBMs are not passing down to consumers.
Without more stringent oversight, patients may continue not to see cost-savings in their pocketbook. One commonsense solution would be regulating the PBM industry to ensure that cost savings realized through drug manufacturer rebates are passed down to consumers. During these unprecedented times when health care concerns are at the forefront, it is important for policymakers to help the most vulnerable afford treatments and clear a pathway to access new and innovative life-saving drugs. This is particularly important with the advent of a new class of drugs called biosimilars.
Biosimilars are medicines that have nearly the same quality, safety, and efficacy as a more expensive brand biologic drug. Biosimilars are like generic medicines for the biologics market. But because PBMs determine what treatments are available on a drug formulary, and because they receive rebates based on the cost of the drugs, they would have little incentive to include these types of more affordable treatments. The higher the cost of the drug, the bigger the rebate for the PBM.
Our communities have been greatly affected by decades of racial health disparities. The high rate of infections and fatalities for the coronavirus are just the latest example. As our country and our state begin to discuss solutions to address the health inequities among communities of color, we urge them to end loopholes that are allowing PBMs to pocket the cost savings that are rightly due to California consumers. By regulating and requiring PBMs to pass rebates directly to consumers, lawmakers would be able to narrow the healthcare gap and save millions of dollars for families living in Los Angeles.
Felicia Jones is Executive Director of Healthy African American Families II located in Los Angeles, CA.
Several Little Rock buildings have been vandalized, leaving behind scorched walls and broken glass.
However, their owners turned them into messages of peace.
CEO of the Arkansas Pharmacist Association John Vinson said the last few days haven’t been easy.
“Over the last three nights, our building has sustained damage with broken windows and a fire. And we’ve been cleaning up, boarding up our windows. We’ve been moving valuables that survived the fire out of the building all day today,” Vinson said.
He decided to turn their boarded-up wall into something beautiful.
“In a very difficult time in our community, when emotions are hot and there are a lot of challenges that need to be solved, a lot of conversations that need to happen, a lot of relationships, a lot of love that we need to see in Arkansas and in Little Rock,” Vinson said.
That’s exactly what a muralist, who goes by X3mex, aims to do.
“It sparks dialogue with our community. Whether they like it, whether they hate it, they agree with it, they don’t,” X3mex said.
This is the fourth mural he’s done in the last few days to raise awareness about racial injustice.
“We are here doing our part, using our platform to spread that message,” X3mex said.
He also worked on a mural on the Democratic Party Headquarters building after windows were smashed.
“It’s disheartening and no one deserves that, but it’s an opportunity to focus on the real issues and have everyone involved and everyone working toward a common goal,” Democratic Party Chief of Staff Karyn Bradford Coleman said.
In the center are the names of those who’ve died, with George Floyd’s at the top.
“We can’t forget about Breonna Taylor. We can’t forget about Sandra Bland,” Coleman said.