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Tag: Express Scripts

  • Why do people pay so much for Humira now that it’s off-patent?

    Why do people pay so much for Humira now that it’s off-patent?

    Humira, the exorbitantly priced drug taken by millions of Americans, finally lost its patent at the end of 2022, five years later than in Europe. But, even though biosimilar drugs are available, people’s out of pocket drug costs for this drug continued to be high. The drug rebate system in the US benefits drug middlemen and insurers and hurts patients, reports Joshua P. Cohen for Forbes.

    In short, pharmacy benefit managers (PBMs) make a fortune negotiating drug discounts from manufacturers. They usually see these discounts in the form of rebates, which they can pocket and/or share with the insurers offering prescription drug coverage. Americans rarely see the benefits of these rebates.

    Moreover, PBMs, which determine which drugs an insurer covers on its formulary and at what copay, can opt not to include drugs on the formulary. So, Humira’s manufacturer, AbbVie gave PBMs a huge rebate to include Humira on their formularies. The PBMs could then opt not to include biosimilar equivalents on their formularies or to make the biosimilars more expensive to enrollees, in order to maximize profits.

    That appears to be what’s happening. PBMs are not making it easy and inexpensive for people to get a biosimilar drug, even though there are more than ten of them available on the market. These biosimilars had only two percent of market share last March, after being available for 15 months.

    Now, more people are taking a biosimilar of Humira. The big PBMs are finally offering biosimilars. But, CVS and Express Scripts, two PBMs, are doing so with a biosimilar from which they receive a co-branded licensing fee and discounts, in order to continue to maximize their profits from the drug. They steer their customers to their biosimilars, which are often more costly than others.

    What you can do? Shop around. Check out Mark Cuban’s Cost Plus Drugs, Costco and other sources for a lower-cost biosimilar.

    Here’s more from Just Care:

  • UnitedHealth, CVS and Cigna helped fuel opioid crisis

    UnitedHealth, CVS and Cigna helped fuel opioid crisis

    [Editor’s note: I am reposting this piece because it brilliantly exposes how the drug middlemen “PBMs,” who are supposed to be delivering value to Americans, deliver value primarily to themselves and the insurers they work for. They push opioids to vulnerable Americans without prior authorization because they make hundreds of millions of dollars doing so, even when they know that these opioids are killing people.]

    A recent Barron’s exposé detailing pharmacy benefit managers’ (PBMs) backroom dealings in the opioid crisis should be read by everyone. PBMs, which most Americans encounter only indirectly through their health insurance plans, have quietly amassed enormous power over which medications we have access to — and how much they cost. This power extends not only to routine prescriptions but also, as it turns out, to some of the most devastating public health crises of our time.

    The report reveals that the largest PBMs — CVS Caremark, UnitedHealth’s Optum Rx, and Cigna’s Express Scripts — were heavily involved in the distribution of OxyContin, a drug at the center of the opioid epidemic. Between 2016 and 2017, these companies raked in more than $400 million in fees and rebates from Purdue Pharma, OxyContin’s manufacturer. That these rebates were essentially tied to the volume of opioids sold is not just alarming — it’s emblematic of how these middlemen prioritize profit over public health.

    The role of PBMs in drug pricing and availability has been contentious for years. The middlemen argue that their rebate system helps lower costs for employers and insurance plans, but this claim often falls apart under scrutiny. As Barron’s found, PBMs received as much as 19.75% in rebates from OxyContin sales, depending on the dosage and the number of pills prescribed. The higher the dosage, the bigger the rebate and profits. This system, which rewards higher utilization of a dangerous opioid, contradicts the PBMs’ – like CVS Caremark’s – own professed claims of fighting opioid abuse.

    For years, PBMs have presented themselves as crucial gatekeepers, using their clout to negotiate lower drug prices. But the reality, as the article highlights, is far murkier. PBMs, including CVS Caremark and Express Scripts, claim they pass the majority of rebates back to their clients — figures as high as 99%. Yet, these rebates are negotiated in secret, and consumers rarely see the benefits. The rebates often serve to maintain PBMs’ relationships with drugmakers, who want to secure prime placement on formularies — the list of drugs an insurance plan covers.

    The opioid crisis, as Barron’s demonstrates, could be a chilling preview of how PBM-driven rebate schemes might contribute to other drug pricing scandals. If PBMs have been willing to accept massive rebates from Purdue Pharma in exchange for keeping OxyContin widely available during a deadly opioid epidemic, what other drugs have been pushed to the forefront based on financial incentives rather than medical necessity or effectiveness?

    The documents that Barron’s obtained, many of which were previously confidential, show that PBMs had ample opportunity to stem the tide of opioid overprescribing. They could have placed stricter limitations on OxyContin or required prior authorization (which they make significant use of for medically necessary medications) to ensure that the drug was being prescribed appropriately. Instead, they allowed Purdue to maintain a stronghold on the market. According to memos, PBMs even demanded higher rebates as the opioid epidemic worsened.

    As the article suggests, this isn’t merely a historical issue. The opioid crisis may have peaked in the late 2010s, but its effects are still being felt today. And the practices of PBMs — opaque rebate deals, backroom negotiations and a relentless focus on profit — are still very much in place. While Purdue Pharma and its executives have been held accountable through legal settlements, PBMs have largely escaped similar consequences. The lawsuits against PBMs for their role in the opioid crisis are still ongoing, and CVS Caremark’s $5 billion settlement, finalized last year, didn’t even require an admission of wrongdoing.

    This begs a larger question about the pharmaceutical supply chain as a whole. If PBMs have the power to negotiate how drugs like OxyContin are covered, and if their decisions are driven by maximizing profits through rebates, can they really claim to be stewards of affordable health care? (Regular readers of this newsletter should roll their eyes at that question.)

    For too long, PBMs have operated with little transparency. As the Barron’s investigation shows, this secrecy has allowed them to profit handsomely from one of the deadliest public health crises in U.S. history. The opioid crisis could be the most egregious example of PBM malfeasance, but it’s far from the only one. As long as PBMs continue to operate without appropriate oversight, the American public will remain vulnerable to their influence over drug prices — and, by extension, their health.

    Here’s more from Just Care:

  • Republican Congressman accuses drug middlemen execs of perjury

    Republican Congressman accuses drug middlemen execs of perjury

    You might not know what a PBM–Pharmacy Benefit Manager–is, but PBMs are among the biggest companies in American, profiting handsomely from driving up your drug costs. A Republican Congressman, Rep. James Comer, who chairs the House Committee on Oversight and Accountability is going after PBM execs for misleading the Committee with findings that are at odds with the facts, reports Page Minemyer for Fierce Healthcare.

    The three biggest PBMs, which control more than 80 percent of the pharmaceutical market, are Optum Rx, owned by UnitedHealthcare, CVS Caremark, owned by CVS, and ExpressScripts, owned by Cigna. Among other misrepresentations and alleged perjuries, their execs would not concede that their companies steer patients to affiliated pharmacies or pharmacies their companies own.

    Congressman Comer said that the execs could be punished financially and sent to jail for as many as five years for their alleged perjuries. That might be a first. As a general rule, low-income individuals spend more time in jail for petty theft than executives at big companies that gouge Americans financially, harm them physically, and worse.

    But, Congressman Comer lets the PBM execs off if they “correct the record.” Based on Express Scripts’ response to Fierce Healthcare, it sees nothing inaccurate with the representations of its executives. Its spokesperson talks about how Express Scripts reduces the cost of medications, without mentioning that the bulk of those savings go into its pockets and the pockets of insurers. PBMs too often drive up costs for individuals.

    Congressman Comer focuses on the harm these PBMs inflict on local independent pharmacies through their bad acts. And, he appears to want to do something about that. If course, in a world with negotiated drug prices, which is the only way to address outrageous prices and prevent monopoly pricing, these companies would serve no useful purpose. That’s the world that Congressman Comer should be helping to create, not undermining. But, that’s not where Republicans in Congress stand. They uniformly opposed the drug price negotiation provision for Medicare in the Inflation Reduction Act.

    Here’s more from Just Care:
  • FTC criticizes Rx middlemen in new report

    FTC criticizes Rx middlemen in new report

    In a health care world filled with insane prices and complexities, the prescription drug middlemen, sometimes called Pharmacy Benefit Managers or PBMs, are at the top of the “is this even possible” list. The Federal Trade Commission or FTC criticizes PBMs sharply in a new 71-page report, reports Reed Abelson and Rebecca Robbins for The New York Times. Only when the government negotiates prescription drugs prices will we see fair prices for prescription drugs; PBMs would cease to exist.

    So that we’re all on the same page: In a better world, PBMs would negotiate lower drug prices from pharmaceutical companies so that health insurance companies could pass on those savings to their members. In our world, the big health insurance companies own the PBMs and pocket all or most of the savings for themselves. Insured Americans end up paying more for their drugs in many cases than people without insurance. Sometimes, their insurers direct them to use higher cost brand-name drugs (because the pharmaceutical manufacturers pay the PBMs a fair bit to steer people to those drugs); people’s insurers might not even offer the generic substitute or do so at a higher copay.

    PBMs keep drugs prices so high that, in many instances, even with a Medicare Part D prescription drug benefit, you will pay less for the full cost of your prescription from Costco or using GoodRx than the Part D copay. PBMs also sometimes overcharge people for the cost of drugs.

    What the FTC says: “[T]hese powerful middlemen may be profiting by inflating drug costs and squeezing Main Street pharmacies.” They “wield enormous power and influence” and their practices “can have dire consequences for Americans.” The only quibble I have with that statement is the “may be;” PBMs profit substantially from these tactics.

    The FTC has not sued a PBM yet. But, the PBMs and the big insurers who own them have taken notice and now worry that they will be sued for anticompetitive conduct. Until there’s a Democratic majority in both houses of Congress and a Democratic president, it seems unlikely that our federal government will block their bad behavior. The Republicans appear to have no interest in reducing drug prices.

    Who owns the three biggest PBMs? CVS Health owns Caremark, UnitedHealth Group owns Optum Rx and Cigna owns Express Scripts. These three PBMs control about 80 percent of the prescription drug market in the US.

    It seems to me that the only way to stop the PBMs from driving up drug costs is to put them out of business. In an ideal world, the US would negotiate drug prices as every other wealthy nation does. PBMs would lose their value. Americans would not be victims of PBM abuse.

    As you might expect, the PBMs disagree strongly with the FTC’s report. They are huge corporations, and they will fight back as hard as they can. They correctly claim that they have enormous leverage to bring down drug prices. But they fail to acknowledge that once they negotiate lower prices, they pocket most, if not all of the savings, and/or pass the savings on to the health insurers who own them.

    The evidence speaks volumes: The PBMs have pharmacies that send mail-order drugs to patients. The FTC found that PBMs paid their pharmacies a lot more for two generic cancer drugs than it would cost to buy these drugs directly from a wholesaler. As a result, in less than three years, they made $1.6 billion in revenue from these two drugs.

    Here’s more from Just Care:

  • Pharmacies sue pharmacy benefits manager for overcharging them

    Pharmacies sue pharmacy benefits manager for overcharging them

    In a health care world in which, among other things, the government is now overpaying insurers offering Medicare Advantage plans $140 billion this year without seeming to blink, pharmaceutical companies are charging tens of thousands of dollars for some life-saving medicines with no government talk of across-the-board drug price negotiation, and hospital systems are dying because Medicare Advantage plans are not paying their bills, it’s refreshing to learn that pharmacies are fighting back against overcharges. Reuters reports that pharmacies are suing Express Scripts, a pharmacy benefits manager (PBM), in a class action for raising fees on them and reimbursing them at low rates.

    Express Scripts is a company that rakes in billions in profits a year for Cigna from pharmaceutical company rebates it receives for putting high cost drugs on insurance company formularies–the prescription drugs your insurance covers–and steering patients to use them. No kidding. For example, you can read here about how pharmacy benefit managers (PBMs) are getting paid big bucks from Humira’s manufacturer to steer people away from its lower-cost competitors.

    Because the pharmacy benefit managers, often in collaboration with your insurance company, are looking to maximize their profits, you could end up spending more if you get your drugs through your insurance company rather than through Costco mail-order, MarK Cuban’s Cost Plus Pharmacy or a coupon at your local pharmacy. This is true if you have a Medicare Part D prescription drug plan as well. Always check with Costco or another low-cost mail order pharmacy to save money; if that’s not an option, ask your pharmacist whether there’s a less costly option than using your insurance to cover your drugs; there often is.

    Because the pharmacies have the will and the money to take on Express Scripts, they should be able to correct the problem and end the gouging. If only the government would step in on behalf of individuals to keep the pharmacy benefit managers from gouging us.

    The complaint by four pharmaceutical companies accuses Express Scripts of collaborating with Prime Therapeutics to hike up reimbursement rates and fees.

    Here’s more from Just Care:

  • Drug companies can make out like bandits regardless of drugs’ value

    Drug companies can make out like bandits regardless of drugs’ value

    Two recent exposes reveal how easy it is for pharmaceutical companies to raise prices on what should be low-cost drugs and make out like bandits. The reason: Doctors can prescribe virtually all drugs at any price; and, in most cases, insurers cover them, regardless of their value. So, drugmakers can effectively pay doctors to prescribe their high-priced drugs over less costly ones that are as effective.

    Evan Hughes explains in The Pain Hustlers for The New York Times that “Selling drugs is a relationship business.” He details how a small pharmaceutical company, Insys, identified and targeted doctors whom Insys knew to be big opioid prescribers. And, it persuaded these doctors to prescribe the Insys high-priced opioid. To clinch the deal, the drugmaker offered the doctors the ability to serve on their “speakers’ program” for a tidy sum of money.

    The “speakers’ program” provided doctors with a forum to promote the opioid to other doctors; it also could be little more than a group dinner. Either way, it enabled the pharmaceutical company to justify monetary payments to the doctors. And, it led to a large number of sales and nearly $100 million in revenue for Insys in the year after it got one doctor to prescribe its opioid drug. Hughes writes, “The drug was so expensive that a single clinic, led by a motivated doctor, could generate millions of dollars in revenue.”

    Lesley Stahl for CBS News tells the story of how the inflated cost of one prescription drug in Rockford, Illinois, a suburb of Chicago, busted the city’s health budget, keeping it from hiring policemen and firefighters. Rockford self-financed the cost of drugs for its employees.

    One Rockford employee needed Acthar, a drug that treats, among other things, infantile spasms, a rare and fatal condition, for his baby twins. The drug has been on the market, unchanged since 1952. And, 16 years ago, it cost $40 for a dose. Now, the same drug costs more than $40,000.

    Achtar’s manufacturer, Mallinckrodt, which bought the drug in 2014, settled charges of price fixing and anti-trust violations with the FTC for $100 million. But, that’s a small penalty. Mallinckrodt has revenues of over $1 billion a year.

    The price hikes began when Questcor bought the right to produce the drug. Questcor also bought Acthar’s competitor drug, Synecthen, eliminating the competition in the US. Synecthen sells for $33 in Canada. Questcor raised the price of Achtar to $32,000 a vial.

    Questcor also marketed Achtar for use by older adults with a variety of health conditions, including rheumatoid arthritis, without any clinical evidence of its efficacy. Achtar had been approved for these other uses in 1952, but back then approval did not require a showing of efficacy.

    Dr. Peter Bach explains that there are better and less expensive drugs available for older adults with these conditions. But, Mallinckrodt pays doctors millions to prescribe its drug over the less expensive ones. So, they do. Medicare now spends more than $500 million a year on Achtar.

    Express Scripts, the Pharmacy Benefit Manager (PBM), Acthar’s exclusive distributor, is also charged with bringing down the price of Acthar. But, it appears not to have done its job. It could have used its leverage to reduce Acthar’s price had it asked another company to manufacture a generic version of the drug. When employees in Rockford needed  another drug that had experienced a 500-fold price spike, from $13.50 to $750, in one day, Express Scripts had found a generic manufacturer to produce that drug for a low price.

    But Express Scripts, like its two large rival Pharmacy Benefit Managers, is conflicted. It makes more money the more doses of Acthar it sells at a high price. Dr. Bach notes that the heart of the problem is that every entity in the drug distribution chain, pharmacies, hospitals, doctors (and insurers, though Bach does not mention them) all have incentives to sell higher-priced drugs.

    So long as Congress does not insist that we pay no more than what other wealthy countries pay for their drugs, Americans, both the taxpayers and the people who need costly drugs, will pay too high a price for them.

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    Now available: The Ten Should-Do’s for Your Health, Purse and Peace of Mind, Chapter One of Aging, Schmaging, by Diane Archer. For $5, you can help yourself and the people you love, and you can help support Just Care.

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