Ed Silverman reports for Stat News on a whistleblower lawsuit against CVS. The lawsuit alleges that CVS won’t cover some low-cost generics, driving up costs for people in the CVS SilverScript Medicare Part D prescription drug plan, while boosting CVS profits. It sounds like CVS is engaged in a big bait and switch with its Medicare enrollees.
We don’t have the numbers, but many people throughout the US in the CVS SilverScript Medicare Part D plan complain about being forced to buy a higher-cost brand-name drug rather than the generic drug equivalent if they want CVS to cover their medication. CVS kept at least twelve popular low-cost generics off its formulary. The generic drugs treat a multitude of conditions, including high eye blood pressure, dementia, ulcerative colitis and hepatitis C.
For example, a Part D SilverScript drug plan did not cover a generic form of Advair, an asthma medicine, on its formulary. Instead, CVS required people to buy the brand-name medicine at a much higher cost.
CVS is charged with keeping its Medicare Part D enrollees from getting generic drugs in order to profit more from covering brand-name drugs beginning in 2015. You would expect CVS to do everything in its power to maximize profits. So, why doesn’t the Centers for Medicare and Medicaid Services (CMS) require all Medicare Part D plans to cover all generic alternatives to any brand-name drug they cover? Moreover, why doesn’t CMS require Part D plans to cover drugs their enrollees secure through Mark Cuban’s Cost Plus Pharmacy and other outlets, when they offer the lowest price for generic drugs?
CVS can profit more from covering brand-name drugs because their manufacturers send CVS rebates for including their brand-name drugs on its formulary. CVS could redistribute these rebates to its enrollees through lower premiums and copays. But, it can also keep the rebate money for itself. I’ll leave it to you to guess what it does.
Because CVS owns retail pharmacies, a Part D prescription drug insurance plan, and a Pharmacy Benefit Manager, CVS has myriad ways to boost profits. For this reason, back in 2012, it agreed to maintain a firewall between its different businesses to keep it from engaging in activities that could undermine competition. The lawsuit claims it broke that commitment.
The lawsuit further claims that CVS developed formularies with fewer generic drugs for patients in Medicare’s Extra Help program, for whom the federal government pays most or all of the copays. These people would be less likely to notice that they were forced to get a brand-name drug, since getting a brand-name drug would have little effect on their copays.
At the same time that CVS did not offer generic substitutes on its formulary, it also allegedly kept these drugs from being stocked in its pharmacies. What better way to ensure people bought brand-name drugs and not their generic drug equivalents?
SilverScript is also charged with not making enrollees aware of higher costs associated with brand-name drugs or with using their Part D drug coverage rather than paying cash for drugs.
Here’s more from Just Care:
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