Canadian Drug Maker Medicure Inc. Acquires a U.S.-Based Independent Pharmacy to Market its Cholesterol Drug. What This Could Mean for the Future of PBMs.
The polio vaccine was never patented. The insulin patent was sold for $1. The average price for epinephrine is around $109 while the 2-pack EpiPen sells for somewhere between $650-$700. How does the conversation for the moral value of medication — not just market value — keep getting shoved under the rug?
That’s the question Canadian drug maker Medicure Inc. and Winston-Salem, NC-based Marley Drug were contending with when, in a moment of brilliance, they decided to align their operations for the sake of U.S. patients seeking access to affordable medication.
Loosely translated, “aligning” meant Medicure would acquire Marley Drug, a transaction that was finalized in mid-December 2020.
So why would a pharmaceutical company acquire a pharmacy? And is that even legal?
The answer may surprise you.
“It was an obvious opportunity for us and our patients. Medicure shares our moral mission to cut drug costs for consumers,” says David Marley, founder of Marley Drug along with his wife, Elizbeth. “You have a small pharmaceutical manufacturer who is willing to buck the system with us.”
“Bucking the system” could well be Marley’s motto. In the relatively small world of independent pharmacy, he’s well-known for being a “loud and proud” voice of pharmacy benefit manager (PBM) reform. Among his other advocacy efforts, Marley is the founder of Pharmacists United for Truth and Transparency (PUTT), a non-profit he formed with other pharmacy owners in 2011 to spread awareness of the types of systemic PBM abuse that now dominate the news: spread pricing; contract “gag clauses” that prevent pharmacists from telling patients about therapeutically equivalent — but less expensive — alternatives; extorting rebate kickbacks from manufacturers; reimbursing pharmacies below drug acquisition price while charging patients and their health plans drug cost plus a sizeable mark-up … the list goes on.
Winnipeg-based Medicure has its own view of working with PBMs. The small, publicly-traded company specializes in the development of medications for the U.S. cardiovascular market. Medicure came to prominence after taking its hospital-based drug Aggrastat® from 2% to 65% market share, offering a high-quality therapeutic alternative to a higher-cost brand at an affordable price.
Attempts to make its cholesterol drug Zypitamag® — a new generation statin with a low risk of adverse interaction with a patient’s other medications — commercially available to patients in the U.S. were not so successful. The reason: the contract demands of PBMs, self-appointed administrators of the U.S. prescription drug market who serve as the gatekeepers and price-setters of insurance-covered medications.
“When we launched, our approach, which I think is pretty standard, was to set a high WAC (Wholesale Acquisition Cost) price, but then to offer a steep rebate with the hope of getting coverage from PBMs,” says Medicure president Neil Owens, Ph.D. “Our assumption was that we would gain coverage, and then a provider would decide if it was right for their patient. Unfortunately, we didn’t gain very much coverage and the high WAC ended up being the cash price for anyone without insurance or who cannot use our discount card by law, such as someone on Medicare Part D.”
At first, U.S. PBMs were willing to carry Zypitamag to a limited extent … for $697 per 90-day supply. Yet Medicure can sell Zypitamag for $90 for a 90-day supply and still be profitable.
“As our company moved from a hospital-based product to a consumer prescription product, my expectation was that Zypitamag would be assessed based on its clinical benefit for patients, however, the only factor that seemed to be considered was the rebate provided. I’ve never asked (our PBM contacts) what would happen to our coverage situation if we lowered our price to $90 per 90 days, but I am guessing they would not be interested in providing coverage, and would likely drop our existing coverage,” Owens continues, “and only have (competitor) Livalo as an option.” (note: Livalo continues to raise its WAC price each year and is now $1,117 for 90 days). “Our understanding is that the PBM inflates our WAC price to the insurance company by about 10%, then offers them a rebate of 35–40%, which results in the patient bearing a significant portion of the cost.”
Even with an agreed-upon price of nearly $700 per 3 months’ supply, PBMs would not make Zypitamag available to patients until they had tried — and failed with — at least two other medications...
While 2020 may have seemed like the worst year in modern human history, it was a busy one for PUTT and our members. With just a few days before the holidays and plenty of reasons to celebrate (Rutledge v. PCMA victory; COVID vaccines) we thought we’d take a moment to reflect on some of the many accomplishments of PUTT and PUTT members over the last 12 months:
In January and February, we launched The PUTTcast, and began regularly guest-hosting on the PBM Reform podcast series for Pharmacy Podcast Network in an effort to further PBM reform by sharing information and resources. We connected members who’d been affected by OptumRx practices to attorney Mark Cuker, whose firm launched a lawsuit against the #3 PBM in multiple states.
The beginning of March brought the full onslaught of COVID. During the first weeks of the crisis PUTT developed and sent a Local Pharmacy Engagement 4-Point Plan to Boards of Pharmacy, Departments of Insurance, and the Governors’ Coronavirus Task Forces in all 50 states. We compiled the responses and published them to the media and our website.
In April and May we conducted Medicaid managed care surveys of independent pharmacies in Florida and Illinois. In response to Florida’s survey and 3 Axis Advisors independent report findings, we worked with pharmacy owners to cast light on pharmacy exploitation by CVS Caremark -- assisting them in holding their own press conferences to highlight the findings. PUTT members and friends contributed evidence that resulted in an article in the Capitol Forum, a private inside-the-Beltway publication read nationwide. The article, published on April 6th, outlines the anticompetitive PBM practices we’ve all come to know, but witnessed shamelessly taking place during the COVID-19 pandemic.
In May and June our board members filed FTC complaints against PBMs and complaints with CMS when network access requirements were not being met. In an effort to mitigate acronym confusion, we created a downloadable Managed Care “Glossary of Terms” for lay persons that can be used to help anyone decipher contract jargon and translate how it’s used as a mechanism for PBM exploitation of pharmacies.
In response to member evidence and complaints we developed the Invoice Project -- an effort to educate payors about the true discrepancies in how PBMs are using their pharmacy dollars -- and an Evidence Locker of member-supplied documentation of PBM abusive practices; as well as a PBM patient poaching survey for data on patient steering tactics.
In June and July, we continued to spearhead “PBM Reform-adjacent” campaigns that affect the viability of independent pharmacies. We conducted an anti-drug importation campaign and asked Facebook users to sign state petitions asking Governors to issue orders that would allow pharmacies to administer the full range of FDA approved vaccines as a proactive response for future COVID vaccine availability. As a COVID precaution, our Annual Summit went virtual and was a huge success. PUTT members and friends had a unique opportunity to speak directly (via Zoom) with a panel of legislators involved in PBM reform from across the country, and even pre-submit questions to be answered.
In August and September PUTT co-authored a 27-page summary proposal of recommendations requested by the White House on healthcare reform with FDA Senior Advisor, Dr. David Gortler, and the input of multiple other pharmacy groups including PSSNY, LIPA, NCPA, and IPMD -- the culmination of multiple meetings with high-ranking White House staff on the need for national PBM reform measures.
In October we welcomed new "official" and unofficial state chapters of PUTT in Michigan and Minnesota spearheaded by members of our board; and enjoyed moments of nail-biting camaraderie when we hosted our live SCOTUS "watch party" of the Rutledge v PCMA proceedings. The final months of 2020 brought a wave of PCMA-funded false patient coalition websites for "Affordable Rx". In response to their bogus claims of "independent pharmacy lobbies", we began a community education campaign putting a "face" to independent pharmacy through social media #UNselfie graphics using pictures submitted by PUTT members and friends. We plan to continue this campaign into 2021.
In November PUTT wrote and defended policy language at the American Legislative Exchange Conference (ALEC) HHS committee which was attended by members from both the political and private sectors, including PCMA. And, a year after we first began coordinating evidence and interview subjects, NBC released its investigative report on mail-order abuse of patients -- a huge win in the battle to educate legislators and the public on the dangers of forced pharmacy mail-order.
PUTT is nothing without the efforts of our members, so this year’s 4th Quarter Membership Campaign has focused on creating solidarity with all healthcare organizations using the title RxRevolution -- we encourage all who are abused by PBM business practices to join the fight!
While 2020 has definitely been "one for the record books," it has also been a year of intense scrutiny on PBM business practices. This is due in large part to our board of directors and members who’ve continued to work hard to educate lawmakers, patients and plan payers -- all while serving as front-line essential workers in the worst global pandemic in a century.
As this year comes to an end, we thank you all for your hard work, your sacrifices and for going the extra mile for your patients and staff. We thank you for your support of PUTT and look forward to working alongside you in 2021 for PBM reform.
Happy Holidays from all of us at PUTT!
The schoolyard bully doesn’t like it when the other kids finally stand up for themselves.
Such was the case this week when CVS Health posted a 4-paragraph response to losing the $400 million State of Louisiana employee and retiree pharmacy benefits contract.
With zero irony, the largest health company in the U.S. complained on their LinkedIn page:
“By inserting themselves in the state’s process of selecting a firm to manage prescription drug coverage … special interest groups representing Louisiana’s independent pharmacists attempted to line their own pockets at the expense of the state’s taxpayers, employees, and retirees …
“This situation has set a dangerous precedent, endangering the healthcare coverage of state employees, threatening the fiscal solvency of the state employee and retiree benefit plan, and emboldening special interest groups whose sole concern is lining their own pockets. This bullying behavior, at a time when the state is facing unparalleled economic uncertainty from a global pandemic and countless natural disasters, is nothing short of shameful. Moreover, it represents an alarming trend that all states should be concerned about.”
Translation: the tables have turned and they don’t like it. Not one little bit.
The problem wasn’t that “special interest groups” inserted themselves into the process. Procurement was complete by the time Louisiana’s Office of Group Benefits submitted the CVS Health contract to the State Joint Legislative Committee on the Budget (JLCB) for approval, citing an “emergency.”
The problem was there wasn’t an emergency.
And so the JLCB had questions. How did this happen? Why was the state rushing to sign a contract with such poorly defined terms? (e.g. definition of a generic drug: “any drug that isn’t a brand”) Why CVS Health, with its documented track record of screwing over patients and undercutting small pharmacies? What about those state Medicaid studies implicating CVS for overcharging Medicaid nearly a half-billion dollars?
Without satisfactory answers, the JLCB voted unanimously to reject the CVS contract and now CVS blames the state’s small business independent pharmacists, who showed up en masse to protest the contract on behalf of their patients and the state.
But put CVS’ sore loser attitude aside for a moment. Review their statement, especially the subtly abusive and blame-shifting language.
“This situation has set a dangerous precedent, endangering the healthcare coverage of state employees … the fiscal solvency of the state employee and retiree benefit plan …”
Anyone who’s ever attempted to leave a toxic relationship knows what it’s like to be taunted with sentiments like these. CVS is effectively saying “Louisiana, this is a dangerous precedent you’re setting … if you leave you’ll endanger the family … you’ll ruin yourself financially …”
And it only gets worse as the statement goes on. “You’re being fiscally irresponsible! You’re letting your friends influence you when you should be listening only to us! There’s a pandemic out there! You’re already helpless from countless natural disasters! To leave now is shameful, you should be ashamed of yourself!”
And finally, “YOU are bullying ME!”
This is classic projection, a common practice among tormentors toward their tormentees, except here we’re talking about the actions of the 5th largest company in the U.S. toward a state caught between a rock and hard place.
Stay classy, CVS.
Publicly whining about the loss of a sale is not a good look, but it’s downright distasteful if the whiner is the corporation currently holding 2/3rds of Louisiana’s Medicaid pharmacy benefits contracts (CVS). Bear in mind, CVS generated revenues of $256 billion in 2019.
And then there’s the matter of calling small business pharmacy owners “greedy”. How they can possibly say that with a straight face when CVS CEO Larry Merlo’s 2019 compensation jumped 66% to over $36 million and is now 790 times that of his average employee’s compensation is the very definition of hypocrisy.
This is the same Larry Merlo who earlier this week bragged about how well the COVID-19 pandemic has played into CVS’ business model, making no apologies for moving into the physician space and heralding the sinister-sounding “omnichannel” as a new approach to healthcare in the retail space.
It’s worth noting that nowhere in CVS’ complaint did they mention Louisiana’s independent pharmacists turning down a $2-per-prescription dispensing fee — paid by the Office of Group Benefits (i.e. taxpayers), not CVS — in exchange for a “yes” to the contract. Nowhere do they mention dragging the state and local pharmacists into a week of contract negotiations focused solely on whether or not CVS would agree to follow Louisiana state laws.
Yes, you read that right. Because CVS had entered “if applicable” in the areas of the contract that dealt with following the law, it became necessary to negotiate following the state’s pharmacy and tax laws.
That’s the kind of business CVS is. Arrogant enough to think the laws may or may not apply to them; trigger happy and ready to spend $9000 or so on a full-page print ad in the state’s main newspaper addressed to the “People of Louisiana” to inform them they now face financial doom because their state declined a contract. Nothing like a little misleading public shame and fear mongering to shape the tide of public perception.
That, by the way, is an abuser playbook tactic called “triangulation” — adding a third party to a discussion in which they are not directly involved. Abusers, in their distorted thinking, can find ways to make any private discussion “relevant” to a public audience.
But that’s CVS, a classic bully and tormentor of anyone who doesn’t fall in line with their view of the world.
Why should they have to conform to the practices of professionalism and good business; show some character, good sportsmanship, or a little humility at the loss of a sale? Why should they consider what lessons could be learned or applied when they can unleash the full firepower of the finest legal, lobbying, and PR army money can buy? And then, turn that army on the small business pharmacies, taxpayers and employees of the State of Louisiana?
Why would they, when no one — not even the federal government — can truly hold them accountable? And so here we are, back where we started.
But the good news is, this is what it looks like when the other kids on the playground finally stand up to the schoolyard bully.
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Dr. David Gortler, PharmD, FCCP, a 2nd generation independent pharmacist and the first pharmacist to be appointed to a senior advisory position with the U.S. Food and Drug Administration, and PUTT Executive Director Monique Whitney co-authored a Summary Proposal of Recommendations to lower drug prices which was submitted to the Trump Administration on Monday, Sept. 14th.
Pharmacists Society of the State of New York (PSSNY), the Louisiana Independent Pharmacies Association (LIPA), and several other pharmacy organizations contributed to the document, which was submitted at the request of senior ranking trade advisors.
The 27-page plan contained a series of recommendations focused on strict PBM reform measures. Guidelines submitted included:
PUTT is proud to have been requested to assist the federal government with reform that could benefit all patients, providers, and pharmacies. This is one of the many ways we are working on behalf of our members and we will continue to push for state and federal reform until PBM abuse is eradicated.
To view an excerpt from the summary recommendations document click here
To view the full submitted document click here
An article in Managed Healthcare Executive reported that over the past few years, PBMs have begun expanding from pharmaceutical management to accepting responsibility for managing healthcare’s overall costs. The article explains PBMs are engaging in ‘self-reform’ in four key ways:
Supporting Physicians and Providers at the Point of Care
According to Prime Therapeutics, “PBMs are working with all parts of the supply chain and with payers and providers to make changes quickly and thoughtfully. All parties are aligned in helping drive the best care in a consumer-focused manner at the most affordable price.”
Our response: If Webster’s Dictionary is seeking examples of doublespeak, this is a ‘prime’ example (so to speak).
PUTT regularly hears from doctors and pharmacists with evidence of the opposite. Patients are denied care, doctors’ orders are overridden by step-therapy requirements - unfulfillable during COVID - and despite executive orders from state governors, PBMs deny medication pre-fills, refills, or refuse to reimburse pharmacies for prescriptions.
These must be examples of “making changes quickly and thoughtfully” and are probably a driver behind surprisingly healthy PBM revenues during a time when everywhere else is experiencing a pandemic-driven economic downturn. One can only assume the PBM definition of “consumer-focused” equals ‘shareholder dividends’.
Assuming More Responsibility for the Total Cost of Care
PBMs claim they're “assuming responsibility for managing the total cost of care.” They purportedly do this by monitoring medication adherence, utilizing “value-based contracts”, and offering reinsurance on specialty drugs to control spending.
PBMs "monitoring medication adherence" is like cats watching a goldfish bowl - they only do what’s advantageous for themselves and there’s a good chance they’ll try to benefit when no one’s looking. And the PBM description of “value-based contracts” - paying more for medication that works, and less for medication that doesn't - defeats the purpose of lowering costs since the only way to pay less is if a treatment is a flop.
But let’s focus on reinsurance.
Reinsurance is a secondary form of insurance companies use to hedge their bets on losses. For example, a trucking company might worry about accident losses. Purchasing reinsurance would cover an additional percentage of any accident losses incurred. It’s like using a bigger umbrella in a rainstorm - the user will still get wet, but less so than before.
Reinsurance is expensive, and applying it to specialty medication is a maneuver that could only raise backend costs which would (logically) raise end-payer prices. Unless the PBM plans to take a revenue cut on each specialty drug reinsured, the employer, payer, and patient will end up being charged more to cover the expense.
Our response: Adding costs will lower drug prices? Even a first-grader understands how that math can’t work.
Providing Increased Cost Control and Transparency in Pharmacy Benefit Design
According to OptumRx, PBMs’ new benefit design allows them to “contract in a performance-driven model" where PBMs are "paid based on the ability to manage the cost and quality of care.” OptumRx claims to do this by “excluding high-cost medications with high rebates and including lower-cost generic alternatives.”
The truth is, PBMs have never disavowed rebates, they’ve simply renamed them ‘manufacturer management fees’. The money is still there - bypassing the intended recipient (the patient) and going elsewhere - usually PBM pockets. Lower-cost generics may be included in plan formularies, but without pharmaceutical companies paying some form of ‘management fees’ those generics will never make it into the hands of consumers under formulary terms.
Performance-driven metrics have been (mis)used by PBMs in pharmacy contracts for years. PBMs twist the language to justify rapidly escalating DIR fees, punitive audits, nickel-and-dime transaction fees, clawbacks, and below-cost reimbursements. To now declare that PBMs themselves will be paid based on “performance metrics” - of their own creation - is not new and is exactly what they’ve promoted themselves as doing for at least the last decade. What WOULD be new is transparency - something that hasn’t yet been tried by any of the “Big 3”.
Our response: Follow the money. Without an independently verifiable, reference-based system for cost management and quality care, PBMs are just a healthcare Ponzi scheme.
Responding to Criticism About PBM Contracting Strategies
After saying that the business model is moving away from rebates, PBMs claim (paragraphs later) that they “pass all rebate dollars back to health plans.” So which is it?
PBMs have claimed to be passing rebates back to 'clients' for years. The problem is the ‘clients’ are the insurance plans - which own or are affiliated with the PBM - so they’re really only passing the money back to themselves. It’s a vertical integration game that creates healthcare monopolies condoned by the FTC - at the expense of the most vulnerable. Employers and government entities who sign PBM contracts may think they're saving money but they're actually being swindled by confusing rhetoric.
Our response: PBM contracts are written to ensure any ‘savings’ are funneled through the contract terms into the pockets of the PBM/Insurance company. The only benefit reform these companies are engaging in is that which benefits themselves.
And Here We Go Again: Express Scripts Targets Pharmacies, Citing “Validity of Doctor-Patient Relationship” as Justification for Reclaiming Payments From 2015
In what may be the latest version of blame-shifting, Express Scripts appears to be clawing back tens of thousands of dollars on 5-year-old Tricare claims for certain prescriptions, according to complaints recently received from PUTT members.
The Department of Defense made their dissatisfaction clear regarding Express Scripts’ failure to handle compounds appropriately, ultimately costing the government billions of dollars in 2015. Since then, the handful of pharmacies that had engaged in the fraudulent scheme were shut down and the pharmacy owners sent to jail.
However, Express Scripts appears to be ramping up its efforts to claim the money it lost on the government’s behalf by dredging up old claims and forcing innocent pharmacies to pay for the PBM’s past failure.
At issue, according to Express Scripts, is the validity of the doctor-patient relationship. Express Scripts justifies reclaiming payments (taking back money for prescriptions) made 5 years ago by accusing pharmacies of not verifying the patient’s relationship with the prescribing doctor prior to filling the prescription. This rationale allows them to take payments back on claims on which Express Scripts itself failed to contain costs for the TRICARE program.
This is an especially sticky situation for patients who pay their providers in cash or choose not to use their insurance. In instances of cash payments where there may not be a lengthy paper trail, patients and providers are effectively being told they must insert the PBM into the process or risk audits and punitive fines similar to the TRICARE takebacks. Patients, physicians and pharmacies shouldn't be forced to introduce an intermediary that’s irrelevant to the patient’s treatment if the patient chooses to pay out of pocket.
While Express Scripts’ “pharmacies should have known better” rationale is weak, it hasn’t stopped the company from helping itself to pharmacies’ bank accounts. Earlier this week several webinars took place, detailing how pharmacy owners can defend themselves against TRICARE clawbacks. Unfortunately, most pharmacy owners will incur legal expenses to fight these unwarranted takebacks.
Pharmacy owners’ frustration is palpable. While most patients’ prescriptions are electronically submitted by the physician’s office (in compliance with HIPAA), PBMs are now shifting the burden to pharmacies to verify doctor-patient relationships. What’s the point of medical record technology or paying “switch” and “transaction” fees if the process itself doesn’t prove the patient-doctor relationship?
Our response is swift and direct: Express Scripts failed to do its job to contain prescription costs for the TRICARE program and is now attempting to shift the blame and the punishment to pharmacies. This is a common PBM practice: selling themselves as price negotiators and patient/plan protectors, only to point fingers when their failings are exposed.
In the coming days PUTT will issue a formal statement to the media condemning Express Scripts’ actions and will contact the members of the Department of Defense, the Senate Finance Committee and House Energy and Commerce committees, asking members to account for why the federal government continues to award contracts to Express Scripts and other bad actors when there’s documented evidence of mismanaged taxpayer funds.
PUTT will also be submitting Freedom of Information Act requests for the 2015 Tricare claims so we can attempt to understand how Express Scripts’ failure to properly manage compounded prescriptions has become the problem of community pharmacies to handle.
It is well-established that pharmacies do not control the prescriptions doctors write nor do they control PBM reimbursements (PBMs call that “proprietary” information!) These practices are strictly managed by doctors and PBMs respectively, as both groups’ trade associations have often publicly announced on digital platforms, in op-eds, and in testimony before Congress.
To now attempt to hold pharmacies accountable for the lack of oversight by Express Scripts and a few “bad apple” pharmacies (which Express did NOTHING about) is another below-the-belt punch for the frontline healthcare providers who have loyally served this nation’s healthcare system.
Community pharmacies did not create this problem and are not to blame for the actions of the primary, non-transparent entities whose contract with the federal government clearly stipulated their responsibility to properly manage taxpayer dollars.
The answer is simple: punish Express Scripts. Demand PBM transparency. It is the only way the broken prescription drug system will ever be fixed.
Frontline healthcare providers have a unique insight into the depths of systemic injustice. As independent frontline healthcare providers, we have first-hand experience of systemic injustice, and just how brutally it affects patients, especially those in communities of color, in rural areas, or those of lower socioeconomic status.
While the rest of the country is just beginning to examine how these communities have been disproportionately affected by COVID-19, the independent pharmacies who serve those populations have long been sounding the alarm about how much more damaging it will be if these patients lose their neighborhood pharmacies.
A JAMA Internal Medicine letter published last fall explored the impact of “pharmacy deserts” on poor and minority communities, gaining much media attention but little change. Last year this compelling Al Jezeera story shed light on the problem, but again, no change. As pharmacists, we are tired of the platitudes and excuses, and as we have seen in our fight against PBMs, we must work together to see progress across our country.
Pharmacy deserts are the result of the PBM business model, which relies on secrecy, exploiting loopholes, abusing pharmacies, and playing patient-steering games in the name of saving somebody - no one knows for sure who - money. These PBM-created pharmacy deserts will cause larger divides in healthcare access, inevitably creating problems across our communities that we won’t be able to fix.
The best antidote for these despicable PBM tactics is transparency. Transparency is a tenant PUTT was built on. Transparency highlights where reform is most needed. Reform should provide stability and allow equal opportunities for communities within the system, enabling stronger, more united communities to flourish. It can also bring to light to truths many people did not previously see or want to acknowledge. A complement to transparency is advocacy, and advocacy stimulates change.
Since the pandemic began, we’ve seen evidence in Florida and other states of PBMs blatantly ignoring Governors’ executive orders to allow patients to receive 90-day prescription fills and pharmacies to be paid for dispensing them. In classic passive-aggressive style, PBMs have been blocking or slashing reimbursements, forcing pharmacies to reconsider participating in the Medicaid network. Just when the positive light of community solidarity is needed most, there go the PBMs: gaming the system, squeezing every available dollar from Medicaid for themselves and forcing pharmacies to subsidize patient care off of dangerously shrinking margins.
Many who desperately depend on their local pharmacies are within the hardest-hit communities by the pandemic and its economic fallout. And while the coronavirus doesn’t discriminate on the basis of skin color or socioeconomic status, PBMs do - by using policies that all but ensure those pharmacies serving minority, rural, and poorer communities are driven out of business or scooped up by giant retailers at fire-sale prices.
PBMs will gladly route those patients into mail order, a costly and wasteful system that generates millions in additional revenue for corporate shareholders. But it's a slap in the face to the communities and patients who most need access to healthcare and an even more disturbing statement of where PBM loyalties lie. Spoiler alert: it’s not with the patients.
As pharmacists, our patients are our top priority, and we have all given so much to help our communities during these difficult times. It is not enough to simply say we support our communities. We must strive to be more inclusive and understanding of what our friends, neighbors and customers are enduring. We spend an incredible amount of time educating patients in our stores, but genuinely listening is a valuable part of educating ourselves.
Currently, with the overwhelming effects of social unrest and a worldwide pandemic, the need for reform is greater than ever. Feelings of anger, bitterness, sadness, and grief cause deep divisions that have bubbled to a breaking point. The senseless deaths of Rashard Brooks, George Floyd, and countless others in our own communities, needs to end now. Patients need accessible healthcare providers who fight for them. As community pharmacists, we advocate on behalf of our patients daily, but being the best healthcare champions we can be requires advocating for fairness in all areas, especially in the most routinely silenced segments of our own cities and towns.
The issues created by PBM biased business tactics and unfair patient treatment will never be resolved if we do not take a stand on behalf of our patients and fellow pharmacists. The past few months have forced us to put our priorities in order. Bricks and mortar can be replaced. Patient lives lost due to injustice or blind corporate greed cannot.
At PUTT we support equality for all members of our communities regardless of their skin color, age, or economic status. We are united in the need to end racism and inequality because only when everyone is treated equally can we say we are truly honoring our oath as pharmacists "to consider the welfare of humanity and the relief of suffering as (our) primary concerns".
M. Scott Newman, PharmD
Pharmacists United for Truth & Transparency
Over Half of Florida’s Community Pharmacies May Be Forced to Discontinue Participation in the State’s Medicaid Program
According to a recent survey of Florida independent pharmacies conducted jointly by PUTT and Small Businesses Aligned for Pharmacy Reform (SPAR), a Florida advocacy group, more than 60% of pharmacies surveyed may be forced to discontinue Medicaid if changes to the state’s current Medicaid reimbursement structure are not implemented soon.
Survey results indicated that 93% of the 123 Florida pharmacies that responded have had to turn away at least one Medicaid patient per month because the loss per prescription was too great, and almost one-third reported having to turn away 10 or more patients per month for the same reason.
Results also showed that pharmacy benefit managers (PBMs), who have publicly claimed to ‘put patients first’ throughout the COVID-19 crisis, blatantly ignored Governor DeSantis’ early refill executive order and current Florida statutes on patient medications, denying authorization to 61% of respondents’ Medicaid patients for 90-day supply pre-fills and/or refills during the pandemic.
According to the pharmacies surveyed, patient prescriptions most likely to be reimbursed at grossly below-cost levels include those for life-threatening conditions such as diabetes, HIV, mental health, and pediatric conditions - all drugs that fall into specialized, more expensive categories and create a substantially greater hardship on neighborhood pharmacies when required to dispense them at a loss.
If the results of this survey are any indicator, PBMs and their MCO counterparts are using the COVID-19 crisis as another way to reconfigure the healthcare industry into their own privatized profit machine.
The drug pricing model in a state-funded health plan needs to be transparent with rigorous oversight. Managed care can be non-transparent and deceptive, fooling taxpayers and consumers into thinking their medicine costs have somehow been contained, or “managed”. The survey shows that PBMs and MCOs are not obeying the law, are reducing patient access, and are forcing neighborhood pharmacies to lose money so they can maximize their record-breaking profits during a public health crisis.
The 50-question survey covered topics related to Florida Medicaid managed care reimbursements. Respondents were asked to describe the percentage of their business dedicated to Medicaid; average profit margin; estimated back-end and transaction fees (fees PBMs charge pharmacies to submit claims for reimbursement, appeal claims and other costs of business assigned by the PBM); effect on patients and on the future of their pharmacies.
The Florida Medicaid MCO survey can be found here.
On March 30, 2020, PUTT issued a formal letter including a 4-Point Plan to all state Boards of Pharmacy (BOP), Insurance Commissioners, and Governors in an effort to engage the use of independent pharmacies to combat COVID-19. The plan was simple, straightforward, and would allow pharmacies to relieve pressure on hospital systems while ensuring independent pharmacies remained solvent throughout the crisis.
PUTT heard back from a handful of states:
The Idaho, Kentucky, and Pennsylvania Boards of Pharmacy responded by thanking us for our suggestions and, in some cases, including additional helpful information while also deferring to their Departments of Insurance and/or Governors' offices. Minnesota's BOP Executive Director took the time to email a more detailed response of the state's efforts in our noted areas of concern both prior to, and during the COVID-19 crisis and included a PDF of documentation for reference going forward.
New Mexico's BOP response was unique in that not only did their Executive Director take the time to respond via email, she also immediately reached out to the state's independent pharmacy group requesting detailed information in the 4-Point Plan areas to determine next steps. Maine's BOP informed us that our plan has been added to their May meeting agenda. We will update members on the outcome of the meeting.
Arkansas, Ohio, Texas, and Kentucky Departments of Insurance responded via email with links to executive orders that have been issued regarding pharmacies' expanded roles during the COVID-19 crisis. Virginia's DOI penned a letter outlining (at the time) upcoming legislation that would rein in PBMs in the areas of licensure, audits, fees, and reimbursements. That legislation was subsequently signed by the Governor a week later.
The state of Washington's DOI sent the most impressive response to date. Their Deputy Insurance Commissioner's comprehensive 4-page letter addressed each of our points individually with regards to the state's emergency efforts and legislation - both in effect and upcoming - in each area. Disappointingly, Connecticut's DOI while acknowledging our communication, provided a "that's not in our jurisdiction" statement.
PUTT appreciates responding states' time and attention to our request amidst COVID-19. While responses were a mixed bag, any response is preferable to no response.
COVID-19 has exposed vulnerabilities in our country's healthcare system and is providing a unique opportunity to shine the light on how PBMs exploit the system for their own gain. Our 50-state outreach is only the beginning of our efforts. Even with a global pandemic occupying the country's thoughts, PUTT will continue to push for PBM reform.
Paraphrasing the immortal words of John Paul Jones, "(We) intend to go in harm's way ... Surrender? (We) have not yet begun to fight!"
It takes courage to call out cheaters, but independent pharmacies are showing courage in spades - and with inspiring results - as PBMs continue to shamelessly game the system to their own profiteering advantage. Below are just a few of the exciting victories we've been following and/or participating in since January 1:
Following the Florida Medicaid Analysis' jaw-dropping report of overt patient steering, specialty pharmacy abuse and PBM non-compliance with the state's Single Preferred Drug List, community pharmacists launched a series of local press conferences calling for immediate reform. Florida legislators have been gridlocked on the PBM reform issue since Rep. Jackie Toledo's HB 961, one of the state's most aggressive PBM legislation bills in years, was tabled in favor of a more neutral committee bill. Refusing to back down, independent pharmacies have scheduled press conferences at their stores over the next two weeks.
After a year-long effort to launch meaningful reforms in Wisconsin, Assemblyman Michael Schraa's AB114 PBM reform bill finally got its hearing this month - and saw the bill greatly reduced in strength just hours before the hearing. Undaunted, Wisconsin local pharmacists attended the hearing and testified with their patients, along with patient group representatives, pharmacy audit representatives, a former CVS employee and members of the public in a 6-hour hearing that stretched well into the evening. Assemb. Schraa's wife and daughter, whose treatment at the hands of PBMs prompted the bill, provided emotional testimony that left committee members asking how a bill that had garnered some 99 sponsors couldn't be passed as originally introduced. The following week, SB 100, the companion bill to AB114, had more than 4 hours of testimony from pharmacists, patients and advocates. Track AB 114 progress here.
In classic "zero to hero" fashion, Illinois went from virtually no protective legislation for patients and pharmacies two years ago to a series of new bills introduced this session by Senator Andy Manar. Proposed legislation would eliminate certain underhanded practices including below-cost reimbursements and forced mail order. Sen. Manar, a tireless champion for community pharmacy, has been working closely with independent pharmacies to bring change to a state where (for a little while at least) PBM reform seemed all but impossible.
With last year's victorious enactment of Senator Fred Mill's comprehensive SB 41 anti-PBM abuse legislation, Louisiana's independent pharmacies are now preparing for the possible topic of PSAO regulation - one the opposition's primary talking points - as the state's legislative session kicks off next month. Louisiana independent pharmacies are also keenly interested in helping their fellow independent pharmacies in other states draft and pass meaningful PBM reform legislation, with the end goal of bringing state reform momentum to the federal government.
California pharmacies are fighting back after the state Medicaid program decided to recoup millions lost to PBM spread pricing from pharmacies - the very people who reaped no benefit from spread pricing whatsoever. See our article (below) for how California Pharmacists Association is working to thwart Medi-Cal's misguided efforts.
To date more than 100 PBM legislation bills have been introduced, with more on the way. Look for updates on these and other inspiring victories in upcoming issues of this newsletter, and please contact us at email@example.com for more information on how these and other states are winning against PBM abuse.