IN THE NEWS
State Audits Show PBMs Costing Taxpayer Funded Medicaid Plans $Millions.
Just Imagine How Much these PBMs are Costing Commercial Plans!
JAW DROPPING RESULTS
Ohio Auditor Dave Yost, in a presentation to the Joint Medicaid Oversight Committee, released the results of his audit of the Ohio Medicaid prescription drug program. To be blunt, the results are jaw-dropping. While the overall spread in 2017 was $224.8 million, or 8.9%, an overwhelming majority of the spread occurred on generic drugs. - Story
More states, including Pa., are taking on pharmacy benefits managers, demanding to see the savings in Medicaid.
"Every Medicaid program in the country should be investigating what the hell is going on," said attorney Linda Cahn, a fierce critic of PBMs who runs a consulting firm that helps health plans negotiate contracts with PBMs. "It's out of control." Click on PDF to view article.
"Just as days of reckoning came for pharmaceutical companies like Valeant and Turing, which raised the price of generic medications by astronomical amounts, they are now coming for pharmacy benefit managers. In Ohio, lawmakers are demanding answers and the state auditor is opening an investigation into potential Medicaid fraud at worst and deplorable profiteering at best from customers and taxpayers whose best interests pharmacy benefit managers are supposed to have in mind.”
"The PBMs are sitting at the center of a big black box," says Linda Cahn, a drug pricing consultant to health insurers.
"...Express Scripts reported profit of $3.4 billion in 2016 up 34% from 2015, on $100.2 billion in revenue, down slightly from $101.8 billion in revenue the year before. OptumRx reported operating profit of $2.7 billion last year, up from $1.7 billion the year before. CVS doesn't break out its PBM financials. - Story
Anthem dumps Express Scripts in favor of starting its own pharmacy-benefit manager
Anthem projects that its new PBM will save it more than $4 billion a year, more than the $3 billion that the health insurer previously claimed Express Scripts owed it. Company executives said the number had been calculated in an “apples-to-apples” way with the previous $3 billion figure.
Drug Middlemen Got Big Markup in New York, Pharmacists Say
January 24, 2019, 9:10 AM EST Updated on January 24, 2019, 11:54 AM EST
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. Click here for full article
CVS Health's New Approach WILL NOT lower prescription drug costs and maximize payor cost savings!
On December 5, 2018, CVS Health introduced its New Approach to Pricing of Pharmacy Benefit Management Services. The article stated we (CVS Health) are working to help redefine the PBM industry in a way that better serves payors, patients and the entire health care system by helping to lower prescription drug costs and maximize payor cost savings." Immediately after, CVS Health states: "We believe guaranteeing the net cost is in the best interest of the client, and we are confident clients and consultants will also see it that way. Later in the article CVS Health stated that they are going to pass through all rebates to the plans.
In addition CVS faced heat throughout 2018 after revelations, in Ohio, that its pharmacy middleman business billed taxpayers far more for Medicaid drugs than it paid to the pharmacies that dispensed them, charging three to six times the standard rate. Critics said that a lack of transparency was at the heart of problems with a system that CVS and other non-fiduciary pharmacy benefit managers said was saving taxpayers hundreds of millions of dollars. Ohio found $235 Million. The states (more than 25) have joined the fight - Pennsylvania just released it’s scathing report of the many $Millions being siphoned by these PBMs.
Lastly, despite pressure by the Trump administration and the state audits of their taxpayer funded medicaid programs, Christina Beckerman, Manager, Corporate Communications at CVS Health, stated on December 5, in a Fierce Healthcare article the company does not expect CVS Health’s profitability to increase or decrease as a result of the shift to 100% pass-through rebates. Think about that for a moment. Ms. Beckerman, spokesperson for CVS Health stated. "...the company does not expect CVS Health’s profitability to increase or decrease as a result of the shift to 100% pass-through rebates."
PBMs, HEALTH INSURERS AND FINANCIAL ADVISORS
RAKING IN $BILLIONS IN PROFITS AND FEES!
AT WHOSE EXPENSE?
The overwhelming evidence of profiteering by the healthcare and benefits industries in the news today makes one wonder why self-insured employers aren't holding their providers and trusted advisors to account. Government entities and self-insured employers are now seeing the results of data analysis that is exposing the abusive practices lack of transparency in healthcare that has been costing them $billions.
PBMs, Health Insurers, and Pension Fund Managers - all being called out and held accountable!
Opinion: An economist’s change of heart: It’s time to regulate the prescription-drug middlemen
Pharmacy-benefit managers find ways to boost their bottom line at the expense of employers and patients
Published: Aug 20, 2018 10:29 a.m. ET
I’ve studied the drug supply chain for years. Like many economists, I saw pharmacy-benefit managers (PBMs) as valuable actors in restraining drug prices, particularly when they went to bat for employer-based health plans.
I’ve had a change of heart. While these giant middlemen in the supply chain still drive hard bargains with manufacturers, they are increasingly finding ways to expand their profitability at the expense of employers and patients. Federal regulators need to be empowered to restore order, and soon.
Vanguard’s Jack Bogle Wasn’t a Billionaire. He Was Proud of That.
New York Times, January 16, 2019 (Link to article)
We talked at length, and his voice got stronger as he launched into a lecture on “the relentless rules of arithmetic” for mutual funds. He said they amounted to this: The fees charged by brokerages, fund companies and advisers were sapping the returns of millions of hard-working people who were trying to save for retirement. Reduce the fees and give the money to the people who need it, he said. That, he said, was what his career was all about.
Report: Big 8 health insurers rake in more than $7B in Q3, setting up strong finish to 2018
The eight largest insurers made more than $7 billion during the third quarter of 2018 and pulled in a hefty $132.4 billion in revenue.
So far this year, the eight publicly traded companies have made more than $21 billion, a 31% increase over the same period last year. Story
Story: Tough medicine from the states -
Pharmacy benefit managers drawing more government scrutiny.
By Catherine Dunn STAFF WRITER Philadelphia Inquirer, November 11, 2018
In Pennsylvania, the amount managed care companies paid to PBMs to provide
benefits doubled in five years, according to figures they reported to the state: going from $1.41 billion in 2013 to $2.86 billion in 2017.
SELF INSURED-EMPLOYERS HAVE A CHOICE
Choose Fiduciary Standards.
STOP the profiteering at your expense.