|FROM ||Ruben Safir
|SUBJECT ||Re: [Hangout - NYLXS] Community Pharmacy is being destroyed by the
Drug Middlemen Got Big Markup in New York, Pharmacists Say
By Robert Langreth
January 24, 2019, 9:10 AM EST Updated on January 24, 2019, 11:54 AM EST
CVS, Express Scripts, OptumRx dominate PBM market in the U.S.
Study sponsored by pharmacist group upset over reimbursement
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CVS HEALTH CORP
Pharmacy-benefit managers are taking increasingly large markups
on generic drugs in New York, according to an analysis of
Medicaid prescriptions at independent pharmacies in the state.
In Medicaid, private insurers are paid by the state to cover
low-income citizens. The insurers in turn usually contract with
pharmacy-benefit managers, or PBMs, paying them to provide drug
coverage. PBMs run by CVS Health Corp., Cigna Corp. and
UnitedHealth Group Inc. then bill insurers for coverage, and
reimburse pharmacies for drugs.
For years, small pharmacy owners have been complaining that PBMs
have been shortchanging them, cutting to unsustainable amounts
the reimbursement they get for dispensing prescriptions to
millions of Americans. Drugstores have also claimed that PBMs
are charging larger per-prescription amounts to their insurer
and employer clients -- and sometimes pocketing the difference.
A Bloomberg analysis this year of 90 frequently prescribed
generic drugs in Medicaid managed-care plans in 31 states found
wide variations in reimbursement and drug cost from state to
state. In some states, Medicaid plans appear to be getting a
good deal, Bloomberg reported earlier this year. In others,
plans pay markups of threefold or more on some treatments, the
Bloomberg analysis found. But Bloombergs analysis couldnt tell
how much of the markup was going to PBMs and other middlemen,
versus how much was going to pharmacies.
The new analysis sponsored by the Pharmacists Society of the
State of New York is one of the first efforts to quantify that
spread in private Medicaid plans that cover about 4.3 million
New York state residents. The state society has been a critic of
the PBM industry and represents pharmacy owners upset over
In 2017, PBMs paid independent New York pharmacies in the
analysis an average of $10.85 per generic-drug prescription.
Private health plans that provide state-financed Medicaid
coverage reported a cost of $14.34 per prescription. That
represents a markup of 32 percent over what pharmacies were
paid. The markups by PBMs more than doubled from 2016, according
to the analysis.
Drug costs have become a major national issue for patients and
politicians. Along with scrutiny of pharmaceutical companies
that manufacture drugs, distributors, insurance companies and
middlemen like PBMs have attracted attention for their role in
health costs. State officials, in particular, have looked at how
PBMs function in Medicaid, which relies on getting low prices to
cover as many low-income people as possible.
Middlemen are taking an increasing share of the margin on
generic drugs in New York, said Eric Pachman, a consultant at 3
Axis Advisors and former pharmacy executive who conducted the
study. While PBMs often keep the spread on generic drugs, the
analysis cant rule out that some of the spread was shared by
PBMs with their health plans clients, Pachman said.
The Pharmaceutical Care Management Association, a trade group
representing PBMs, said that drugstores are overpaid in the New
York Medicaid program.
New Yorks Medicaid program wastes millions every year by
overpaying drugstores, said Charles Cote, a spokesman for the
group. By defending wasteful spending in a program thats clearly
in trouble, New Yorks special interest drugstore lobby wants to
rearrange deck chairs on the Titanic without offering ways to
keep Medicaid afloat.
PBMs, including CVSs Caremark unit and Cignas Express Scripts
unit, have said that spread pricing adds stability and
predictability to drug costs for their clients. Health plans
freely choose the spread arrangements over other fee-based
options, they have said.
PBMs health-plan clients are highly sophisticated purchasers
that negotiate exactly the type of contract they want, Cote
said. Rates paid to pharmacies are designed to incentivize
drugstores to manage their generic-drug inventory so PBM clients
dont overpay, he said.
Read More: The secret drug pricing system middlemen use to rake
The societys analysis looked at payment data from 11 independent
pharmacies around New York State, which included claims paid by
17 different private Medicaid plans. Those data were compared to
a federal database of Medicaid spending. While the results are
likely to be similar at other independent pharmacies, they dont
include data from large chains that may have more bargaining
power, said Pachman.
The New York analysis follows a report by Ohio that also dug
into the practice in great detail. The full Ohio report hasnt
been released publicly.
On Jan. 20, the Columbus Dispatch reported that an unredacted
version of the Ohio report showed that CVS had been paying some
large competitors, including Walmart Inc., far less than it was
paying its own pharmacies in Ohios Medicaid managed care
CVS oversees drug benefits for about 94 million people in the
U.S., while also operating about 9,800 pharmacies. CVS declined
to comment on the New York report.
Read more: This bottle of pills costs $20 in one state and $130
OptumRx, the third big drug benefit manager, is a unit of
insurer UnitedHeath Group Inc.
(Updates with comment from PBM industry group starting in ninth
On Wed, Jan 23, 2019 at 11:57:49PM -0500, Ruben Safir wrote:
> The profession of pharmacy is being strangled to death by the Pharmacy
> Benefit Management Companies, especially Express Scripts and CVS
> Carmark. Pharmacist do valuable jobs, and earn their pay by working
> with the entire scope of the healthcare system. My entire life has been
> committed to helping patients across New York City, amongst nearly all
> ethnic groups and economic classes and a through a wide swath of
> neighborhoods in the five boroughs, from the Upper East Side of
> Manhattan to East New York. I’ve worked for Veterans, in hospitals, in
> chain drug stores and in independent pharmacies. Independent pharmacy
> has been the linchpin to my career. There have been years, even
> decades, when chain drug stores and hospitals had refused to hire
> Orthodox Jews. Without independent pharmacy, my career would have ended
> in the 1990’s. It was only because of the pharmacist shortage that
> civilian positions started to open among chains and hospitals, and only
> as floating pharmacists, or working through agencies.
> In my years of experience in independent pharmacy, I’ve come to work
> with and help communities on a deeply personal level. I’ve had to work
> with Holocaust survivors that had been inadvertently become addicted to
> narcotics while looking after their mental health and families. I’ve
> had to work with AIDs patients as they were dying and to mediate with
> their families and the broader medical establishment as they were used
> as human guinea pigs for experimental treatment that most often didn’t
> work. I have had to call hospital clinics to intercede for impoverished
> patients who left outpatient facilities at major city hospitals, with
> Maalox prescriptions, as they were doubled over in pain at my counter,
> obviously in life threatening conditions, but ignored by the clinics due
> to their minority status and their history of drug abuse. Twice such
> interactions had saved patients from bleeding ulcers which would have
> killed them, as evident by their being then admitted for emergency
> services and surgery after I reached attending doctors directly.
> I’ve also had to deal with my fair share of attempts at fraud. I’ve had
> to turn down Immigrant patients with books of prescriptions, trying to
> get money for prescriptions multiple times, and try to figure out when
> they really needed treatments or were just conning the system. Drug
> abusers, pimps, scam artists, workman comp scammers, etc have all had to
> be vetted at my door. And while not perfect, I have dealt with these
> cases with honesty and to the best of my ability, and in return, I have
> been appreciated by families of all backgrounds, in conditions that are
> unique to New York City.
> In today’s hostile environment, every day I go to work knowing that law
> enforcement looks at me as a criminal more than an asset. And every day
> I come home without being investigated, I feel like I’ve put my head in
> the lions mouth and escaped, yet one more time.
> More than once I have left employment over ethical issues from
> hospitals, chains and independent ownership. I’ve seen Duane Read put
> thousands of dollars of inventory in conditions that render the drugs at
> best impotent in a Midtown location. I’ve dealt with hospitals who let
> premature babies die because of failure to get needed IV orders to
> floors on over night shifts. I’ve seen numerous pharmacies being run
> without pharmacist, especially in Elmhurt Queens because of a basic
> failure of the Board of Pharmacy to enforce the law. I reported
> narcotics loses to one hospital administration and was then fired. I’ve
> had to deal with corruption in OMIG which nearly cost me my career for
> no cause other than doing my job and keeping the public trust.
> What I do, is deep in the trenches of the healthcare system and it
> provide an invaluable service to the community. But my career has been
> destroyed by the fraud and greed of the Pharmacy Benefits Management
> companies who has promised New Yorkers to control costs and to improve
> access, but instead act to prevent access, and have raised costs.
> Specifically they have targeted the city’s outer boroughs, Brooklyn, the
> Bronx and even Queens for discriminatory practices designed to crush my
> profession for their own profits, and the biggest targets of all are in
> minority communities.
> To be continued...
> So many immigrant groups have swept through our town
> that Brooklyn, like Atlantis, reaches mythological
> proportions in the mind of the world - RI Safir 1998
> DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
> http://www.nylxs.com - Leadership Development in Free Software
> Being so tracked is for FARM ANIMALS and extermination camps,
> but incompatible with living as a free human being. -RI Safir 2013
So many immigrant groups have swept through our town
that Brooklyn, like Atlantis, reaches mythological
proportions in the mind of the world - RI Safir 1998
DRM is THEFT - We are the STAKEHOLDERS - RI Safir 2002
http://www.nylxs.com - Leadership Development in Free Software
http://www2.mrbrklyn.com/resources - Unpublished Archive
http://www.coinhangout.com - coins!
Being so tracked is for FARM ANIMALS and extermination camps,
but incompatible with living as a free human being. -RI Safir 2013
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