Smerconish

There's an old French proverb, "the more things change, the more they stay the same." Nothing could be truer of the U.S. healthcare system, especially in the shell game of prescription drug pricing. Although the cost and accessibility of healthcare – particularly medication – has hovered among voters' top concerns in presidential and midterm elections since at least 2012, elected officials have little power to control, let alone keep their campaign promises to lower drug prices. It's counterintuitive to think those who can create, execute, and enforce the laws somehow lack the power to rein in the drug industry. But it's not "Big Pharma" who's the problem, it's "Big Health Insurance."

It doesn't get any bigger than CVS Health, UnitedHealth/OptumRx, and CIGNA/Express Scripts. These three behemoths – publicly-traded corporations and their pharmacy benefit manager (PBM) divisions – hold an estimated 74% of the market share for prescription drug benefits.

They are the true arbiters of drug prices.

You may have heard the term "PBM middlemen" (or just "middlemen"). Most people don't know PBMs, but they see the carrier logo emblazoned on their prescription drug coverage card. That carrier is the PBM.

PBMs began by processing pharmacy claims in the late 1970s-early 1980s, but have grown to a nearly $400 billion industry. They are the designers of benefit plans, gatekeepers of patient plan formularies, the approvers of prior authorizations, and the enforcers of "step" or "fail first" therapies.

Though they are drug price negotiators, they are not negotiating on anyone's behalf but their own. They "negotiate" by requiring drug manufacturers to pay "rebates" – you and I would call them "kickbacks" – for drug placement on the patient's plan formulary of approved drugs. The more expensive the rebate/kickback, the better or more exclusive the drug's placement. This is why some patients are required to buy brand medicines instead of less-expensive generics. The PBM makes more every time that brand is dispensed.

The travesty of these "negotiated" prices is the end payers - often the patient's employer - and the patient see almost none of these savings. If PBMs' alleged competitive edge is their so-called ability to negotiate better prices, their secret revenue gain comes from the difference between the price they charge the plan and the amount they reimburse the pharmacy. Several studies of different states' Medicaid programs have shown taxpayers footing the bill for anywhere between $224 and $300 million in spread – the profit pocketed by PBMs.

The first study in Ohio found the average spread was more than $6 per prescription, meaning the State of Ohio paid an average additional $6 per prescription per Medicaid enrollee per month. And that's just one state – 49 others are dealing with some version of spread pricing and rebate kickbacks to PBMs. 

And that's just on the "normal" prescriptions. The news is far worse for more expensive "specialty" medications, where studies are finding PBMs steer patients to PBM-owned pharmacies and mail order. Self-dealing and patient steering are revenue generation schemes straight out of the PBM playbook. Still, their unfortunate consequences leave patients scrambling as "pharmacy deserts" emerge in the wake of independent and community pharmacies' closures. No business can withstand for long having its customers routed to the competitor.
Continue Reading

Healio

The American College of Rheumatology and 11 other provider and patient groups have called on UnitedHealthcare to cancel its proposed copay accumulator initiative, arguing it would increase financial burdens and limit access to treatments.

According to the group, United Healthcare will as of Jan. 1 require providers to report the amount their patients receive in copay assistance for office-administered treatments. The insurer will then use this information to enforce a copay accumulator, which would prevent funds from assistance programs from being applied to patients’ annual deductible and out-of-pocket maximums, the ACR said in a press release.

The ACR and 11 other provider and patient groups have called on UnitedHealthcare to cancel its proposed copay accumulator initiative, arguing it would increase financial burdens and limit access to treatments. Source: Adobe Stock“Rheumatologists treat many patients with chronic conditions like rheumatoid arthritis and lupus that sometimes require using complex biologics to avoid debilitating pain, disability or life-threating complications,” Chris Phillips, MD, chair of the ACR Insurance Subcommittee, said in the release. “Unfortunately, biologics are expensive, and for the past few years, insurers have been moving them into ‘specialty tiers’ that require patients to pay a percentage of the actual cost of the drugs.”

“Copay assistance programs thereby preserve patient access to otherwise unaffordable drugs when out-of-pocket expenses are high,” he added. “The dramatic increase in out-of-pocket expenses will put these treatments out of reach for many patients, potentially leading to disease flares, expensive surgeries, permanent disability and higher overall health care costs.”

According to the ACR, the annual price for biologic therapies ranges from $22,000 to $44,000, with patients on specialty tiers having to pay hundreds or thousands of dollars in copayments each month, or otherwise going without treatment.

If copay assistance funds are no longer counted toward deductible and out-of-pocket maximum requirements, the ACR argued, patients will be forced to pay these additional costs.

“This is particularly concerning for rheumatology patients, because the medications they require are often single-source therapies with no equivalent generic product or therapeutic alternative that is cheaper,” read the ACR release.

In addition, the groups said requiring physicians to report on the amount their patients receive in copay assistance forces them into an ethically objectionable position.

“Reporting this information knowing that it would likely price a therapy out of reach for a patient who needs it to avoid flares and further disease progression is counter to our oath to first due no harm,” Phillips said in the release. “It would also strain the doctor-patient relationship and would be unethical under AMA guidelines. No one living with a chronic disease should have to choose between their physical and financial health.”
The groups expressed these concerns to the insurer in a letter dated Oct. 7 to Lewis G. Sandy, MD, FACP, executive vice president of clinical advancement for UnitedHealth Group.

Other than the ACR, the signatories include the AIDS Institute, the American Academy of Dermatology Association, the American Academy of Neurology, the American College of Gastroenterology, the American Gastroenterological Association, the American Kidney Fund, the Arthritis Foundation, the Association for Clinical Oncology, the Cancer Support Community, the Council of State Rheumatology Organizations and the National Multiple Sclerosis Society.

A spokesperson for United Healthcare did not immediately respond to a request for comment.

According to the ACR, at least four states have prohibited copay accumulators in individual and small group health plans, due to concerns of patients abandoning their prescriptions during the deductible phase.

Salt Lake Tribune

I help people. That’s what I do. I’ve been a practicing nurse since 1986 and a nurse practitioner for the past 11 years. I’ve watched the health care profession entirely change when the coronavirus emerged.

Suddenly, nurse practitioners like me are in the spotlight, on the front line, rather than quietly doing our jobs in the background. Many of the nurse practitioners I know would rather be doing our work one patient or family at a time, rather than in public. But, now that NPs are more visible, I have a few recommendations that I think could make a positive change for all of us.

As a global positive change, know that every health care worker feels the stress of this moment with you. We see the statistics every day, the evidence of our patients' panic with every cough, and the arm’s-length distance that people keep between themselves and anybody wearing scrubs. Even in the difficulties of this year, we’re using our experience, education and personal approach to help people make it through their medical problems and their fears. We feel the weight of this. Each patient is an individual. Your nurse practitioner cares.

We’ve all seen the landscape of health care change significantly. The bureaucracy. The paperwork. The insurance red tape. All the ever-changing mandates and regulations and loopholes that lead patients to view health care as a burden. We all feel the frustration rather than feeling, well, healthy.

Which brings me to the local change. In my practice, I have come to dread the words “pharmacy benefit manager.”

Pharmacy benefit managers work for health insurers. They insert themselves as intermediaries between patients and their care providers. The PBMs' job is to secure “rebates” on prescription drugs to get preferential treatment on the insurers' drug plans. But this also limits which medications will be paid for on your plan.

For me, the decision on whether patients can use a particular prescription medication should be based on their personal health history and need. This can prevent more side effects and having to “try” multiple medications before we can use the right one.

Unfortunately, the reality is that these PBMs keep a chunk of the rebate for themselves and the health care plans, rather than the full discount going to the patient who needs the medication. That “rebate” the drug companies offer would otherwise go straight to the patient, not the PBM. In 2015, as much as $106 billion in rebates went straight to those PBMs, not the patients. This means that you may be paying out of pocket for the medication you need, but many cannot afford those high costs.

Earlier this year, the Utah Legislature considered changing this practice to pass those rebates to the customers at the pharmacy counter instead. At the last minute, the bill did not pass.

I’m a nurse practitioner, which means that I wear many hats. But I was not trained as a financial counselor. When I’m talking to patients about the medications that could help them live healthier, happier lives, I should be able to prescribe the medication that I need to without having to worry about which insurance company bureaucrats are taking how much of a percentage. And my patients shouldn’t have to worry about that either.

PBMs restrict medical practice and your access to medications. Ask your legislator to put some action behind those “clap for our heroes” gestures of gratitude so that you can get the care that you need. Because what I’d like to do most is focus on helping people like you. That’s what I do.

Melissa J. Hinton, Salt Lake City, is president of Utah Nurse Practitioners and has a doctor of nursing practice degree from the University of Utah.

Ohio Capitol Journal

Ohio Medicaid, which provides health care to more than a quarter of the state’s population, is poised to take a big step in a major overhaul of the program.

Gov. Mike DeWine on Tuesday said that on Wednesday a request for applications will hit the streets seeking pitches from companies to manage the care of more than 90% of Ohio Medicaid recipients.

“This is the first major overhaul of Medicaid in 15 years,” DeWine said.

That might be overstated. In 2013, under former Gov. John Kasich, Ohio greatly expanded the Medicaid rolls under the Affordable Care Act. It was one of several big changes to Medicaid over the years.

At present, five care organizations manage the bulk of the $27 billion Ohio Medicaid spends annually. But DeWine said state officials have been in the field for months, meeting with patients, providers such as doctors, dentists and pharmacists, as well as the companies that manage the care plans.

“From these conversations and this process, we have developed a new plan, a new vision, for Ohio’s Medicaid program, one that focuses on people and not just on the business of managed care,” he said. “A vision of what we hope will be a better, healthier, more productive state of Ohio.”

The governor said Medicaid will also restructure its programs for children with serious behavioral health problems.

The reforms are ambitious and they were praised by some policy experts as long overdue.

“Frankly, I’m happy to see (this) move forward,” tweeted Loren Anthes, who leads the Cleveland-based Center for Community Solutions’ Center for Medicaid Policy. “It’s been long overdue need for the state to revisit these valuable contracts. Devil’s in the details, but we could be doing a lot better than we are. I can’t wait to review the proposal.”

However, some others have questioned whether the Medicaid’s leadership has the bandwidth to complete the overhaul by next summer, when it’s supposed to be complete. Not only is the state in the midst of a historic pandemic, the department has failed to meet important deadlines to disburse supplemental payments to pharmacists and to create a single pharmacy benefit manager.

Continue Reading

National Law Review

The regulation of drug prices has received significant recent bipartisan support in Congress. Democrats and Republicans in both houses have proposed approximately eighty bills relating to drug pricing over the past two years. The charts below summarize the key provisions of representative bills.[i]

Although the proposed price-regulating mechanisms differ from bill to bill, the bills do not indicate a clear difference in the parties’ goals when viewed at a high level. Many of the proposed bills focus on price transparency as well as reporting to the Department of Health and Human Services (HHS). Certain bills would require pharmaceutical manufacturers to provide data on, and justifications for, the pricing of certain drugs that would exceed specified price increase limits. These bills usually include penalties for reporting failures; however, they usually do not provide a procedure to lower a price that triggers the reporting provisions. Instead, they often establish or enhance public databases for the reported information, and some go as far as requiring pharmacists to communicate this information to the patient at the point of sale.

Other proposed bills would set caps on drug pricing, albeit through different approaches. Certain bills would require HHS to negotiate drug prices with the manufacturers of covered drugs, for example, and some of these bills grant HHS the power to establish a price if an agreement is not reached.

Although many bills on this topic have been proposed throughout the current legislative session, most are stalled in committee, often since their day of.”


Senate Bills
S. 3384
Lowering Prescription Drug Prices for America’s Seniors and Families Act of 2020 
Sen. Martha McSally (R-AZ)  03/03/2020
Referred to Committee on Finance

• Allows HHS to negotiate prices for certain Medicare Part D drugs.
• Allows individuals to import drugs from Canada.

S. 3166
Prescription Drug Affordability and Access Act
Sen. Cory Booker (D-NJ)  01/08/2020
Referred to Committee on Health, Education, Labor, and Pensions

• Establishes the Bureau of Prescription Drug Affordability and Access.
• Puts limits on price increases of drugs and otherwise regulates drug prices.
• If a manufacturer intends to increase the WAC by more than the percentage by which the Consumer Price Index for All Urban Consumers for that year exceeds the index for the preceding year, then the manufacturer must submit information about the price increase to the Bureau 60 days before the increase is to take effect.
• In determining whether the price increase is appropriate, the Bureau will consider several factors, including the size of the patient population, benefit of the drug, impact of price on drug access, costs of drug development, revenue, and the price of the drug in other countries.
• If the price is not appropriate, the Bureau shall direct the manufacturer to lower the WAC to an appropriate price, and the Bureau will determine a rebate process for patients impacted by the inappropriate price.

S. 3129
Lower Costs, More Cures Act of 2019
Sen. Mike Crapo (R-ID)  12/19/2019
Referred to Committee on Finance.

• Increases drug price transparency and requires drug price information in advertisements, including a requirement that if the price of a qualifying drug is increased by 10% or more in a single calendar year, or 25% or more within three consecutive calendar years, then the manufacturer must submit a report to HHS with information certain information on the drug and a description of the price increase.
• Gives HHS the authority to implement the recently defeated Disclosure Rule.

S. 2543
Prescription Drug Pricing Reduction Act of 2019
Sen. Chuck Grassley (R-IA)  09/25/2019
Legislative Calendar under General Orders (Calendar No. 225)
S. 4199 (introduced 07/02/2020) reintroduces S. 2543

• Requires manufacturers to provide a justification to HHS for a price increase of 100% more than the price in the previous 12 months, or greater percentages over longer periods of time.  If the drug is in the top 50th percentile of net spending under Title XVIII or XIX of the Social Security Act during any 12 month period in the previous 60 months, a justification is required if there is a 15% increase over the price in the previous year, or greater percentages over longer periods.
• Drug manufacturers must issue rebates to CMS for certain covered drugs, including those for which the average manufacturer price increases faster than inflation.

S. 1987
End Price Gouging for Medications Act
Sen. Jeff Merkley (D-OR)  06/26/2019
Referred to Committee on Health, Education, Labor, and Pensions

• HHS must establish annual reference prices based on the median retail list price in Japan, Germany, the United Kingdom, France, Italy, Canada, Australia, Spain, the Netherlands, Switzerland, and Sweden.
• If information is not available in at least 3 reference countries, then the reference price will be determined by HHS based on factors including the therapeutic effect, value, patient access, costs, and other appropriate factors.
• Drugs covered under federal health programs may not exceed the reference prices.
• Drugs must be available to uninsured people on private health insurance at this price.

S. 1664
Prescription Drug Price Reporting Act
Sen. Rick Scott (R-FL)  05/23/2019
Referred to Committee on Health, Education, Labor, and Pensions

• Requires manufacturers to submit information to HHS about drugs marketed in the U.S., including information about cost, pricing, and rebates.
• Manufacturers must submit notice of price changes 30 days in advance.
• HHS must establish a database allowing consumers to subscribe to price change notifications.

S. 1437
Drug-price Transparency in Communications (DTC) Act
Sen. Richard J. Durbin (D-IL)  05/13/2019
Referred to Committee on Finance

• Requires direct to consumer advertising for prescription drugs covered by Medicare and Medicaid to include “truthful and non-misleading pricing information,” giving statutory authority for the recently-defeated Disclosure Rule.

S. 1391
Fair Accountability and Innovative Research Drug Pricing Act of 2019
Sen. Tammy Baldwin (D-WI)  05/09/2019
Referred to the Committee on Health, Education, Labor, and Pensions

• Establishes reporting requirements for drug prices and price changes.
• Requires HHS to make these reports public after 30 days.

S. 977
Transparent Drug Pricing Act of 2019
Sen. Rick Scott (R-FL)  04/01/2019
Referred to Committee on Health, Education, Labor, and Pensions

• At the point of sale, pharmacists must disclose out-of-pocket costs and the price without insurance.
• Health insurers must publish the co-payment amount for each covered prescription drug prior to the annual open-enrollment period.
• Retail list price is temporarily prohibited from exceeding the lowest retail list prices in Canada, France, the United Kingdom, Japan, and Germany.

S. 709
Prescription Drug Pricing Dashboard Act
Sen. Robert P. Casey, Jr. (D-PA)  03/07/2019
Referred to Committee on Health, Education, Labor, and Pensions

• HHS must establish an online dashboard with specific information on pricing and utilization of drugs in federal programs.

S. 637
CURE High Drug Prices Act
Sponsor: Sen. Richard Blumenthal (D-CT)  02/28/2019
Referred to Committee on Health, Education, Labor, and Pensions

• Prohibits price gouging by manufacturers of prescription drugs covered by a federal health care program.
• Price gouging is presumed if the manufacturer increases the price: (1) 10% or more within the previous 12-month period; (2) 20% or more in the previous 36-month period; (3) 30% or more within the previous 60-month period.
• If HHS has reason to believe that an increase constitutes price gouging, it will notify the manufacturer who must submit a justification for the price increase.

S. 474
Stopping the Pharmaceutical Industry from Keeping drugs Expensive (SPIKE) Act of 2019
Sen. Ron Wyden (D-OR)  02/13/2019
Referred to Committee on Finance

• Requires manufacturers to submit to CMS written justification for price increases of certain percentages.

S. 378
Stop Price Gouging Act
Sen. Sherrod Brown (D-OH)  02/07/2019
Referred to Committee on Finance

• When there is a price spike, this bill imposes an excise tax ranging from 50%-100% of the price spike revenue received by the company.
• A price spike occurs when the price is increased by more than the price increase allowance, which is the percentage by which the Chained Consumer Price Index for All Urban Consumers (C-CPI-U) for that year exceeds the C-CPI-U for the previous year.
• HHS can exempt drugs from the excise tax if (1) a for-cause price increase exemption should apply, or (2) the drug has an average manufacturer price of not greater than $10 for a 30-day supply and is marketed by at least 3 other holders of FDA-approved applications.
• Pharmaceutical companies must submit data about drug prices and revenue to HHS, and HHS must submit an assessment of the data to the IRS.

S. 102
Prescription Drug Price Relief Act of 2019
Sen. Bernard Sanders (I-VT)  01/10/2019
Referred to Committee on Health, Education, Labor, and Pensions

• Establishes oversight and disclosure requirements to HHS relating to prices of brand-name drugs.
• Requires HHS to conduct annual review for excessive pricing of drugs.
• Prices are considered excessive if the domestic average manufacturing price exceeds the median price of the drug in Canada, the United Kingdom, Germany, France, and Japan.  If the price does not exceed this average, or if data is unavailable in at least three of these countries, the price can still be considered excessive depending on several factors, including cost, revenue, the value of drug to patients, and the size of the affected patient population.

S. 99
Medicare Drug Price Negotiation Act
Sen. Bernard Sanders (I-VT)  01/10/2019
Referred to Committee on Finance

• Similar to H.R. 275, requires CMS to negotiate prices of covered drugs.

S. 62
Empowering Medicare Seniors to Negotiate Drug Prices Act of 2019
Sen. Amy Klobuchar (D-MN)  01/09/2019
Referred to Committee on Finance

• Similar to other legislation, requires CMS to negotiate prices of Medicare drugs and institute a price structure for reimbursement of covered drugs.

House Bills
H.R. 5281
Drug Price Transparency in Medicaid Act of 2019
Rep. Earl L. Carter (R-GA-1)  12/04/2019
Referred to the Subcommittee on Health

• Requires pass-through pricing.

H.R. 5239
​Prescription Drug Price Reporting Act
11/21/2019
Rep. David P. Joyce (R-OH-14)
11/22/2019
Referred to the Subcommittee on Health

• Manufacturers must submit to HHS any price changes to prescription drugs 30 days in advance, as well as information about drug cost, pricing, and rebates.
• Requires HHS to maintain a public database with this information (including prices).

H.R. 5039
Life-Sustaining Prescription Drug Price Relief Act of 2019
Rep. Daniel Lipinski (D-IL-3)  11/13/2019
Referred to Subcommittee on Health.

• Places restrictions on prices of “life-sustaining prescription drugs.”  Specifically, the domestic average manufacturing price cannot exceed 110% of the average price for the drug in Canada, the United Kingdom, Germany, France, and Japan.
• Allows HHS to negotiate drug prices for drugs covered by Medicare Part D.
• Requires HHS to maintain a drug price database.

H.R. 4640
Affordable Pricing for Taxpayer-Funded Prescription Drugs Act of 2019
Rep. Peter A. DeFazio (D-OR-4)  10/14/2019
Referred to Subcommittee on Health

• If federally funded healthcare research and development results in development of a drug, a patent for the drug will not be granted unless the entity receiving the patent agrees to a reasonable pricing agreement with HHS.

H.R. 3
Elijah E. Cummings Lower Drug Costs Now Act
Rep. Frank Pallone, Jr. (D-NJ-6)  12/12/2019
Passed House
Senate – 09/08/2020 Placed on Legislative Calendar (General Orders, Calendar No. 521)

• Drug price cannot exceed 120% of the average price in Australia, Canada, France, Germany, Japan, and the United Kingdom, or, if that information is not available, 85% of the average manufacturer price in the U.S.
• Requires CMS to issue regulations requiring ads to display the price of a 30 day supply or the typical course of treatment.
• Requires HHS to negotiate certain drug prices.

H.R. 3379
Price Relief, Innovation, and Competition for Essential Drugs Act
Rep. Janice D. Schakowsky (D-IL-9)  06/21/2019
Referred to the Subcommittee on Health

• Shortens the marketing-exclusivity period for biosimilars to five years after the reference drug is licensed.

H.R. 2115
Public Disclosure of Drug Discounts and Real-Time Beneficiary Drug Cost Act
Rep. Abigail Davis Spanberger (D-VA-7)  10/28/2019
Passed House
Senate – 10/29/2019 Committee on Finance

• Requires CMS to publish certain information regarding Pharmacy Benefit Managers (PBMs) and prescription drugs, including information related to generic dispensing rates, drug discounts and rebates, and payments between PBMs, health plans, and pharmacies.

H.R. 2087
Drug Price Transparency Act
Rep. Lloyd Doggett (D-TX-35)  05/21/2019
Subcommittee hearings

• Requires manufacturers of drugs without rebate agreements under the Medicaid Drug Rebate Program to report information to CMS, including average sales price, total units, and WAC.

H.R. 987
Strengthening Health Care and Lowering Prescription Drug Costs Act
Rep. Lisa Blunt Rochester (D-DE-At Large)  05/16/2019
Passed House
Senate – 05/20/2019 Committee on Health, Education, Labor, and Pensions

• Requires HHS to submit a report to Congress as to whether increases in prescription drug costs caused Medicare beneficiaries to forego recommended treatment.

H.R. 448
Medicare Drug Price Negotiation Act
Rep. Elijah E. Cummings (D-MD-7)  09/25/2019
Subcommittee Hearings Held

• Requires CMS to negotiate with drug manufacturers.  If CMS is unable to negotiate an appropriate drug price, then the price must be the lowest of the following: (1) the contract price pursuant to 38 U.S.C. § 8126; (2) the average price during the most recent 12 month period in Canada, the United Kingdom, Germany, France, and Japan; or (3) the best price determined under § 1927(c)(1)(C) for the most recent rebate period.

H.R. 275
Medicare Prescription Drug Price Negotiation Act of 2019
Rep. Peter Welch (D-VT-At Large)  09/25/2019
Subcommittee Hearings Held

• Requires CMS to negotiate with pharmaceutical companies regarding prices of drugs covered by Medicare.

[1] The charts above summarize selected drug pricing bills put forth in the 116th Congress.  Although these lists are not exhaustive, they provide examples of the types of price-regulating measures under consideration. These bills were identified by searching congress.gov for the terms “drug pricing” and “drug price.”

EIN Presswire
Pharmacies Allege OptumRx Knowingly Paid Them Less Than Large Retail Chain Pharmacies and Misused Patient Information

The newest litigation against a major pharmacy benefit manager comes from a most likely source: their small business victims. Unwilling to tolerate the low reimbursements which threaten to drive them out of business, more than 30 California independent pharmacies have sued pharmacy benefit manager (PBM) OptumRx, a division of UnitedHealth Group, charging the company violated California laws by paying them less than their acquisition costs and illegally steering their patients to Optum’s own mail-order pharmacy.

The lawsuit alleges that OptumRx ignored California law, unlawfully paid California pharmacies substantially less than it paid large chain retail pharmacies - like CVS or Walgreens - and its own mail-order pharmacy for the same prescriptions. The lawsuit further alleges that OptumRx deliberately reimbursed these independent California pharmacies below their wholesale cost to acquire generic prescription drugs necessary for their patients.

PBMs administer the prescription drug portion of health insurance and self-insured plans, acting as a middleman between the insurance plan and the pharmacist. Over the last 20 years, these companies have accumulated immense, unregulated power - the three largest PBMs controlling over 80% of the healthcare market - and have utilized that power to increase prescription drug costs, decrease competition, and restrict patient choice.

Paying independent pharmacies less than their acquisition and dispensing costs is likely one reason why OptumRx is the most profitable component of UnitedHealth Group; the world’s largest health insurance company, with over $225 billion in annual revenues.

The California pharmacies in the lawsuit allege that:

PBMs dictate reimbursements without notice or negotiation, and the dictated rates are often unrelated to the pharmacies’ actual wholesale costs to acquire the drugs for their patients.

Sometimes for a prescription filled by the pharmacy, Optum charges the patient’s health care plan the brand price while paying pharmacies the lower generic price for each prescription. This allows Optum to collect huge profits on prescriptions merely by changing their classification.

Optum built a wall of secrecy around its conduct by forcing network pharmacies into confidentiality agreements that conceal the truth - specifically how much Optum is paid by insurance plans for prescriptions, how much Optum receives in rebates from drug manufacturers, and how little Optum pays to pharmacies who actually serve the patients and dispense the drugs.

Optum illegally takes patient information it receives from independent pharmacies through the claims process and uses it to steer those customers to Optum’s own mail-order pharmacy.

The survival of independent pharmacies in the U.S. healthcare system is seriously threatened by the unethical, predatory business practices of PBMs. This lawsuit seeks to break this wall of secrecy and hold Optum accountable.

The California pharmacies are represented by Mark Cuker and Neal Jacobs of the Jacobs Law Group, and the California firm of Barrack, Rodos, and Bacine. Cuker and Jacobs also represent over 500 independent pharmacies in lawsuits pending in Pennsylvania and Illinois.

For more information about the Independent Pharmacies vs. PBM lawsuits, contact Mark Cuker at (215) 531-8512 or 215-569-9701.

# # #
Mark R Cuker, Esq
Jacobs Law Group
+1 215-569-9701
email us here

Bloomberg Law

Cigna Health & Life Insurance Co. convinced a federal judge in Connecticut to trim a proposed class action claiming the insurer schemed with pharmacy benefit manager OptumRx Inc. to overcharge health plan participants for prescription drugs.

Judge Jeffrey Alker Meyer of the U.S. District Court for the District of Connecticut on Monday dismissed Billy Ray Blocker’s state law claims alleging breach of contract and breach of the implied covenant of good faith and fair dealing. Cigna isn’t a party to Blocker’s health plan, which is self-funded by a county government in suburban Atlanta, and there’s no indication Cigna assumed any obligations under the health plans between Blocker and the county, Meyer said.

Meyer’s ruling addressed only two of the lawsuit’s 10 counts.

The lawsuit accuses Cigna and other defendants of scheming to overcharge people for prescription drugs, sometimes by as much as 300%. The lawsuit claims that when a given prescription drug costs less than a patient’s copayment amount, the insurer “claws back” the difference through an improper scheme kept hidden from patients. This sometimes causes insured patients to pay more for drugs than they would without insurance, with pharmacists contractually prohibited from telling patients this information, according to the lawsuit.

The lawsuit was allowed to proceed over Cigna’s motion to dismiss in 2018.

Other insurers have been accused of similar violations. UnitedHealth Group Inc. defeated a clawback lawsuit in 2017. Humana entered into a confidential settlement in 2018, and cases against CVS Health Corp. and Walgreens Boots Alliance were voluntarily dismissed.

The health plan participants are represented by Zimmerman Reed PLLP; Whitfield, Bryson & Mason LLP; Keller Rohrback LLP; Izard, Kindall & Raabe LLP; Scott & Scott LLP; Motley Rice LLC; Sarraf Gentile LLP; and Lockridge, Grindal, Nauen PLLP.

Cigna is represented by Morgan, Lewis & Bockius LLP.

The case is Negron v. Cigna Health & Life Ins. Co., 2020 BL 331303, D. Conn., No. 3:16-cv-01702, 8/31/20.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bloomberglaw.com

Specialty Pharmacy Continuum
Matthew Gibbs, PharmD
​
I worked as a pharmacy intern and technician for six years in a large retail chain pharmacy. I admired the relationship the pharmacist I worked under, let’s call her Mary, had with her patients and the unbelievable amount of trust they put in her advice. Mary’s acuity with patients underscored the value that pharmacists—the highest-educated health care professionals on medication topics—bring to the health care team. Indeed, they are uniquely trained to help providers and patients deal with complex issues involving medication management.

I aspired to be a respected resource for my community when I entered pharmacy school, but by the time I graduated in the late 1990s, a major shift in the industry already had taken hold.

I noticed Mary and other pharmacists scrambling on the phone with insurance carriers, calling doctors’ offices to get prescriptions changed to comply with their patients’ formulary. I saw Mary’s relationship with her patients turn from a helpful exchange of medical information to managing copay charges and trying to explain why the price of a medication kept changing each time they went to refill.

Mary is not alone. Pharmacists are reporting higher workloads, more stress and less overall job satisfaction, as a recent survey showed (bit.ly/2ZKgQb8).

Compounding this issue, the largest pharmacy benefit managers (PBMs) now exclude hundreds of products. Brand-name medications are particularly prone to such exclusions: Their removal increased by as much as 63% in 2020, according to CoverMyMeds’ 2020 Medication Access Report (prn.to/3f6nz5P). Moreover, nearly 70% of patients report having made personal or financial sacrifices to afford prescriptions, and 30% say they’ve had to abandon a prescription due to cost, the CoverMyMeds report noted. That abandonment rate is even higher when out-of-pocket costs exceed $100 (Figure). Additionally, formulary exclusions of brand-name medications continue to increase. These barriers to care impede a pharmacist’s ability to play the role they are trained for and limit where they can effect meaningful change.
Continue Reading

The Columbus Dispatch

The bipartisan Joint Medicaid Oversight Committee wanted answers.

And Ohio Medicaid Director Maureen Corcoran was summoned to provide them during a special meeting Wednesday in the Statehouse.

After 90 minutes of testimony, leading members of the panel still weren’t satisfied.
Chairman Dave Burke, GOP senator from Marysville who’s also a pharmacist, said a “serious trust issue” remains with Corcoran and the department, which provides health-care coverage for 3 million poor and disabled Ohioans.

Among those issues:

‒ Corcoran asserted that a July 1 deadline for a provisional single pharmacy benefit manager to handle the state’s $3 billion-a-year prescription drug program was merely a benchmark to inform the legislature how the project was going. That was news to Burke and others, who regarded the July 1 date included in the bill passed last year as a deadline for actually implementing the new setup.

“That was a go-live date, not a let’s-see-how-we’re-doing date,” Burke said.

‒ She said authority granted by legislators to pay more starting in early 2019 to pharmacies that provide health-care service beyond dispensing drugs won’t take effect until January of 2021. The agency views the measure OK’d by lawmakers as merely “permissive” and not mandatory.

‒ Corcoran revealed that $100 million allocated starting this past Jan. 1 by the legislature to bolster pharmacies with a high caseload of Medicaid recipients has been put on indefinite hold because of budget cuts ordered by Gov. Mike DeWine.

Burke was almost sputtering as he searched for words to describe the department’s lack of action to carry out items approved by the legislature, including the state budget.

“We passed the bill in its entirety. The governor signed the bill in its entirety. So either that means something in its entirety or it doesn’t,” he said.

“We have to stand up. I mean, we do pass the laws and these laws have meaning. And you can’t just pick the laws you like and implement those and say, well, that’s legislative authority, and the ones you don’t like you never implement and say, well, we’re getting there, we have a budget issue or it’s COVID or they ran out of cupcakes in the vending machine.”

‒ The director was peppered with questions about the department’s request for proposals for the single PBM. Corcoran responded to some but said she wasn’t prepared to answer others.

Sen. Bill Coley, a Republican lawyer from southwest Ohio, said the proposal has such loose language he “could drive a truck” through the loopholes.

“We’re going to get hosed on this thing. I just really see it,” he said.

Corcoran surprised the oversight panel by saying yet another contract will be signed with an entity — possibly another PBM — that will have the job of monitoring the single PBM.

The gathering was called after an Aug. 2 Dispatch story detailed the mystery surrounding a 2019 report by a Medicaid consultant hired to look at state reforms designed to rein in PBMs rolling up huge profits at the state’s — and Ohio pharmacies’ — expense.

The Dispatch pointed out how top department officials — including Corcoran herself — denied for several months that any earlier versions of the consultant’s report existed. They finally fulfilled a Dispatch public records request for such material last month, more than a year after it was filed.

The department’s spokesman also had denied for three months that the consultant’s report had been submitted. When confronted with that falsehood, Corcoran told The Dispatch that the original report dated June 28, 2019, “reflected when the (consultant’s) analytic work was completed, not when the final report was produced and delivered to us.”

She repeated that defense Wednesday after Burke began the meeting by reading a large portion of the story out loud. But as she did then, Corcoran did not address her false denials that an earlier versions of the report existed.

When the study — plus additional analytical material added by department officials — was finally released at the end of September, so much material had been removed that it was down to 20 pages from the 27 in the June original.

Several lawmakers expressed fury because they feel they were misled by Medicaid officials about the study as well. The oversight panel is made up of a bipartisan mix of five senators and five representatives.  Continue Reading

​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