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Tag: Pharmacy Benefit Managers

  • Pharmaceutical companies use scare tactics to mislead public about generics

    Pharmaceutical companies use scare tactics to mislead public about generics

    Americans are always being sold, and health care products are no exception. It’s one thing when corporations are pushing the latest snack food or toothbrush, it’s another when they are pushing to make money in ways that endanger our health and well-being. The Washington Post reports that pharmaceutical companies have been using scare tactics to mislead the public about generic drugs and to keep lower-cost drugs off the market.

    We all know that pharmaceutical companies use all the tools in their arsenal to profit off of our health. They charge Americans prices that are double what they charge in other wealthy countries, which regulate drug prices. They pay Pharmacy Benefit Managers to put their higher-cost drugs on insurance company formularies and keep generics off. They pay researchers to help ensure papers are published promoting their latest drugs. They pay TV stations to promote their drugs. They pay disease organizations to support their high prices. They contribute to election campaigns of federal and state policymakers to protect against legislation that would eat into their profits. And, the list goes on.

    Now, they are said to be doing what they can to keep generic versions of their high-cost biologic drugs–biosimilars–off the market. They are misleading people. These generic biosimilar drugs are as safe and effective as the brand-name biologics. They are made with the same ingredients.

    Biologics are made with living cells. And, they can treat a range of life-threatening diseases, including cancer. But, they tend to be extremely costly, often costing many thousands of dollars.  Indeed, the majority of growth in prescription drug costs between 2010 and 2015 can be attributed  to biologics, including Humira.

    If the pharmaceutical companies succeed, it could keep these generics off the market, and many people will be forced to go without necessary treatment. They cannot afford the cost of the biologics; biosimilars could cost as little as half as much. Not surprisingly, drug spending is estimated to be between $54 billion and $200 billion higher over 10 years, if the biosimilars are not available.

    But, what’s curious is that it is the doctors who prescribe these drugs. And, they are perfectly well positioned to tell their patients that biosimilars are as safe and effective as biologics. The Washington Post article does not explain why doctors are not prepared to do so.

    FDA Commissioner Gottlieb suggested that the FDA could step in and issue warning letters to pharmaceutical companies if they are deliberately misleading people. But, it’s hard to imagine that will be helpful.

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  • Expect big drug price increases in 2019

    Expect big drug price increases in 2019

    Reuters reports that pharmaceutical companies are hiking up prices on a lot of prescription drugs this year. Why not, if they can? And, what will President Trump do about it given his promise to bring down prescription drug prices in the US?

    Novartis, Bayer AG, Allergan, GlaxoSmithKline, Amgen, AstraZeneca, Pfizer and Biogen are all raising their drug prices this month or soon after. Novartis has announced its plan to raise prices on more than 30 of its drugs. And, Pfizer has said it will raise prices on 41 of its drugs. Glaxo claims it will not raise its drug prices more than 10 percent, a steep increase given that the rate of inflation is less than half that.

    Most of these pharmaceutical companis’ price increases are likely to be significant. These pharmaceutical companies, along with 20 others have notified the California agencies that they are planning to raise prices. They are only required to so, do under California state law, if their drug prices will go up more than 16 percent over two years.

    Many of the pharmaceutical companies are claiming that they will be offering discounts and rebates that more than offset their list price increases. That means more money to health insurers and Pharmacy Benefit Managers (PBM), which put their drugs on the health plan formularies. The pharmaceutical company rebates cement an alliance with insurers and PBMs that should serve the pharmaceutical industry well when policymakers challenge high drug prices. It provides no help to Americans. 

    And, why does Congress continue to let pharmaceutical companies charge Americans about twice as much as people in other wealthy countries. That costs us about $250 billion each year. Senator Sanders and Congressman Khanna have a bill to set drug brand-name prices at the average of what five other wealthy countries pay. Senator Warren and Congresswoman Schakowsky have a bill that would lower generic drug prices. They are in line with Trump’s assertion that we should not be paying more than other wealthy countries. But, so far, Republican policymakers have no interest in supporting one or both of these bills.

    If you want Congress to rein in drug prices, please sign this petition.

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  • Hospital upcharges for prescription drugs provides further justification for federal government drug price negotiation

    Hospital upcharges for prescription drugs provides further justification for federal government drug price negotiation

    A new report by Pharma, the trade association for drug manufacturers, looks at hospital upcharges for prescription drugs and provides further justification for federal government drug price regulation. The report suggests that hospitals are making a bundle off of prescription drugs.

    According to Pharma, which analyzed the prices hospitals charge for all hospital-administered drugs, on average, hospitals charge almost five times (479 percent) the price they pay for these drugs.  Just over half of hospitals (53 percent) charge between two and five times the cost of these drugs. One in six hospitals, 17 percent, are charging at least seven times their cost.  And one in twelve hospitals (8 percent) are charging more than ten times the price they pay for them.

    Uninsured patients may get hit with these exorbitant drug charges in full. Insurers generally pay a negotiated rate for the drugs their enrollees receive in hospital. That negotiated rate is typically more than twice the price that hospitals pay for the drugs, and less than what hospitals charge the uninsured. It’s no wonder the public wants Congress to address health care costs.

    These excessive hospital charges mean ever higher health insurance premiums for Americans.  They also drive people into medical bankruptcy or force them to forego necessary medicines.

    Congress should not permit hospitals to hike up the price of drugs beyond a small administrative fee.  And, health insurers, along with Pharma and the general public, should be calling on Congress to pass legislation that forbids this behavior.

    Unfortunately, our commercial health care system permits pharmaceutical companies, Pharmacy Benefit Managers (PBMs) and the insurance industry, in addition to hospitals, to make out like bandits when it comes to what they charge for drugs. Pharmaceutical companies like to shift blame to hospitals and PBMs for their markups. And, insurers and PBMs tend to keep quiet about the high price of prescription drugs, enjoying the riches they reap from the failure of Congress to negotiate one fair price for everyone.

    It’s time Congress stepped in to negotiate fair drug prices for everyone in this country. If Germany and Japan can do it, so can the US.

    If you want Congress to rein in drug prices, please sign this petition.

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  • Pharma suit dismissed in California: State can require notice of drug price hikes

    Pharma suit dismissed in California: State can require notice of drug price hikes

    Ed Silverman reports for StatNews that a federal judge in California dismissed a Pharma lawsuit which attempted to block a state consumer protection law. The law requires drug makers to disclose and justify some price hikes in advance.

    The judge ruled that the court had no authority to hear the case based on Pharma’s submissions. The judge further ruled that Pharma had failed to demonstrate any potential harm from the law. The judge did give Pharma the ability to refile its lawsuit if it could show harm.

    Pharma claims the California law is unconstitutional, violating free speech and interstate commerce. Pharma also blamed the Pharmacy Benefit Managers (PBMs)–the middlemen who decide which drugs an insurer will cover and at what copay level–for increases in the list price of drugs. And, it claimed the law should hold the PBMs accountable.

    The 2017 California law obligates pharmaceutical companies to let health insurers and government health plans know at least 60 days in advance of a 16 percent hike or more, over two years, in the list price of all drugs that cost more than $40. The pharmaceutical companies are also obligated to explain why they are raising the price of these drugs.

    The law may be working to keep at least some drug prices down. A few pharmaceutical companies let California health plans know that they were not going to raise prices on some drugs or they were going to raise prices less.

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  • Insurers drive up costs for people with diabetes

    Insurers drive up costs for people with diabetes

    The Hill has an opinion piece on a new way that insurers are increasing their profits. Insurers drive up costs for people with diabetes, making it harder for them to get needed care. Instead of applying drug copay coupons toward people’s deductibles, insurers make them pay their deductibles out of pocket.

    Insurers would rather steer clear of patients with diabetes, because they use a significant amount of health care. So, insurers are imposing an additional financial obstacle for them to get care. They are taking advantage of the fact pharmaceutical companies offer people with diabetes drug copay coupons; and, they are effectively appropriating the value of those coupons for themselves. Insurers now require patients to pay their deductibles in full out of pocket rather than allowing them to use their drug copay coupons toward their deductibles.

    Insurers have a series of crazy names for this new policy: “Copay Accumulators,” “Out-of-Pocket Protection Programs” or “Coupon Adjustment: Benefit Plan Protection Programs.” Whatever insurers name the policy, it means that people with diabetes and other costly conditions who benefit from drug company coupons that help with their cost-sharing have to pay their full deductible out of pocket before their care is covered.

    In a more just health care system, people with diabetes would not have to worry about the cost of their insulin or about meeting a deductible. And pharmaceutical companies would be required to charge fair prices for their insulin. They would not be able to hand out discount coupons that end up benefiting themselves and insurance companies more than patients.

    There are now 30.3 million adults in the US with diabetes. And, they are increasingly struggling to get needed care. Over the last 15 years, costs for insulin have more than tripled. Moreover, pharmacy benefit managers (PBMs) are no longer covering many medications and supplies that people with diabetes need. (Another 84.1 million adults have pre-diabetes, a condition which, if left untreated, tends to lead to type 2 diabetes within five years.)

    There are insulins, including NPH, which are far less expensive than the newer insulins. NPH is available without a prescription for less than $30 a vial at some pharmacies. NPH works, but it is harder to manage blood sugar with NPH than it is with more expensive insulins—Humalog or Lantus.

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  • Doing away with drug rebates alone will not bring down drug costs

    Doing away with drug rebates alone will not bring down drug costs

    Pharmaceutical companies charge too much for their drugs. And, they probably charge more because they pay pharmacy benefit managers (PBMs) rebates. (PBMs decide which drugs will go on an insurer’s formulary at what copay level.) But, simply doing away with drug rebates likely will not bring down drug costs.

    We need to eliminate both the rebates and the PBM middlemen, which are in the business of choosing drugs and copays for insurance company formularies based in no small part on how much pharmaceutical companies pay them to promote particular drugs. These perverse incentives undermine the public health.

    Neither PBMs nor health insurers, which also benefit from rebates, should be steering people to drugs based on how much these companies profit from them. These misaligned incentives result in some drug formularies including brand-name drugs but not the generic substitutes.

    Pharma says it does not like the rebate system and wants to “delink” it from the drug’s list price, Katie Thomas reports for The New York Times. My read: Pharma feels that pharmacy benefit managers, insurers and pharmacies are getting too much money from the sale of prescription drugs, and it wants a greater share of that money.

    It is hard to imagine that eliminating rebates would lead drug companies to lower their prices. When was the last time a drug company lowered its prices? Moreover, drug companies will always find ways to pay distributors to promote their drugs over others, to pay doctors to prescribe their drugs through speaking fees and other gifts, and to pay individuals to take their drugs through copay coupons and the like. That’s how they increase sales and profits.

    To be sure,  Americans would benefit most if the federal government regulated all drug prices and had an independent agency determining which drugs add value and which are unsafe and ineffective or overpriced relative to other drugs on the market.  That’s what the UK, France and Italy do.

    HHS Secretary Azar recognizes that everyone in the drug supply chain makes money off of the drug’s list price. He suggests that it might be time to eliminate rebates. But, even if rebates go, don’t assume that ordinary Americans will benefit.  It will mean more money for Pharma and less money for PBMs, insurers and pharmacies. And, in all likelihood, to make up for that lost revenue, they will find ways to drive up health care costs for individuals even further.

    If you want Congress to rein in drug prices, please sign this petition.

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  • Trump shows his support for big Pharma

    Trump shows his support for big Pharma

    President Trump’s blueprint to address prescription drug prices reveals his desire to ensure big Pharma thrives. It represents another broken campaign promise. Indeed, it was such a relief to Pharma investors that stock prices for pharmaceutical companies and pharmacy benefit managers rose following Trump’s release of his plan. What’s wrong with Trump’s plan and why are the drug companies and their investors so happy?

    1. The plan leaves power in the hands of pharmaceutical companies to raise prices enormously in the US and encourages them to raise prices around the world. The President appears fine with the prices Americans pay for drugs. He just wants pharmaceutical companies to charge other countries more for them.
    2. The plan does little or nothing to help people with Medicare or complex conditions needing astronomically priced drugs. It does not support Medicare drug price negotiation, let alone drug price negotiation for all Americans, which is what is needed. It suggests that there is some way for Part D plans to better negotiate without specifying what that way might be.
    3. The plan would allow some Medicaid agencies not to cover certain critical prescription drugs. This could mean that some people with Medicaid may be forced to go without needed medicines.
    4. The plan does nothing to address the pharmaceutical industry practice of keeping their drugs on patent and keeping generic substitutes off the market through a variety of tactics.
    5. The plan does not encourage drug innovation to address major public health issues.

    Just to say it, President Trump does not single out the pharmaceutical companies for price gouging but rather suggests that other parties are to blame, particularly the Pharmacy Benefit Managers and lobbyists. Since pharmaceutical companies set the prices and quash generic competition any way they can, Trump gives them a free pass. Or, perhaps, a multimillion dollar pass, given that Novartis paid $1.2 million to Trump’s lawyer and lord knows how much other pharmaceutical company money traded hands with Trump’s team.

    Trump’s plan appears to throw consumers a bone or two, but appearances can be deceiving.

    • For people with Medicare Part D, HHS could lower out-of-pocket drug costs. But, would that simply lead Part D plans to increase premiums?
    • Trump seems to want to limit the power of Pharmacy Benefit Managers (PBMs) to benefit from drugmaker fees and rebates at the expense of people buying the drugs. But, it is not clear what that will mean for consumers.
    • HHS might address the ability of drugmakers to give rebates off the list price of drugs. Again, that is not likely to deliver a net benefit to consumers.
    • HHS could limit increases in prices drugmakers charge under Medicare Part B.

    Meanwhile, the Hill reports that House Republicans might actually pass a bill that addresses high prescription drug prices. They are working on a “compromise” to the CREATES Act, which might help speed more generics to market. Some Republicans say that they are concerned that the bill would lead to “frivolous lawsuits” against drugmakers. Of course, the drugmakers are using every arrow in their quiver to keep the CREATES Act from being enacted in any form.

    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.

    ___________

    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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  • Medicare encourages doctors to use costliest cancer drugs 

    Medicare encourages doctors to use costliest cancer drugs 

    The Trump Administration has identified one problem with Medicare payment rates for drugs. StatNews reports that CMS Chief Seema Verma critiqued Medicare regulations that encourage doctors to use the costliest cancer drugs as well as incentivize pharmaceutical companies to charge a high price for cancer drugs.

    You can be sure that pharmaceutical companies give doctors a strong financial incentive to use their most costly cancer therapies. In exchange, Pharma may pay for their vacations, dinners and speaking fees. But, Medicare gives doctors a second incentive to prescribe the highest-cost cancer drugs. It pays them more to use them.

    Medicare pays doctors for the cost of chemotherapy drugs plus six percent for administering these drugs. The higher the cost of the drug, the more the doctors earn.  It should go without saying that ease of administration has nothing to do with the amount Medicare pays doctors.

    Why would Medicare pay a doctor $6,000 to administer a $100,000 drug therapy, much less $30,000 to administer a $500,000 drug therapy. Why would Medicare pay different amounts for the same drug therapy depending upon whether it is administered in a hospital or an outpatient clinic? It is all about the influence of the pharmaceutical companies and big Pharma.

    In a recent speech, CMS chief Seema Verma posed these questions and critiqued Pharmacy Benefit Managers (PBMs) for having a conflict of interest. They allegedly negotiate lower drug prices for insurers. But, they also pocket money from the drug manufacturers to promote their costly drugs. According to Verma, they may keep some of the drug discounts they achieve for themselves.

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  • CVS Caremark accused of $1 billion in Medicare drug fraud

    CVS Caremark accused of $1 billion in Medicare drug fraud

    Pharmacy benefits managers (PBMs)–middlemen who determine the list of approved drugs for health insurers and pay pharmacy claims– argue that they drive down drug prices. But, they also can drive drug prices up in a host of ways. StatNews reports on a whistleblower lawsuit that charges CVS Caremark, a pharmacy benefit manager, of reporting higher than actual generic drug prices to the federal government, defrauding taxpayers, Medicare and older adults and people with disabilities.

    According to the Aetna actuary who filed the lawsuit, CVS Caremark overcharged people with Medicare enrolled in a Part D drug plan and the federal government for generic prescription drugs. Put differently, the price CVS Caremark paid pharmacies for generic drugs allegedly was less than it charged Aetna’s Medicare Part D plans. CVS Caremark pocketed the overpayments.

    CVS Health claims the allegations of fraud are “without merit,” but, the whistleblower in this lawsuit discovered that people with Medicare in other Part D plans were paying less for generics than CVS Caremark was charging Aetna Part D plan members. Why would CVS Caremark not have been able to achieve the same low generic prices for Aetna’s Part D plan members as other Part D plans were able to get for their members? And, CVS Caremark charged Aetna Part D plan members significantly more–25 to 40 percent more.

    CVS is currently in the process of buying Aetna. Had it owned Aetna at the time the lawsuit was filed, in 2014, Aetna’s actuary likely would have had no reason to look into the price discrepancy between what its members paid for generics and what other Part D plan members paid. Aetna would have benefited from the overcharges.

    If Congress stepped in and allowed the federal government to negotiate prescription drug prices for everyone–effectively to set drug prices no higher than the average price of the seven wealthiest countries in the world–not only would it bring down drug prices for everyone by nearly 60 percent, but these types of taxpayer and consumer fraud would not be possible.

    If you want Congress to rein in drug prices, please sign this petition. 

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