What is the Major Contributing Factor to the High Costs of Your Prescription Medications?

By N. Lois Adams, Consultant Pharmacist, MBA, HHCS HEALTH GROUP OF COMPANIES, LLC.

Have you ever heard of the “PBMs”?  No?  Well join the huge group of people- seniors, employers, workers-who look at me with the thousand- foot, stare in their eyes when I mention that term. I almost always get the answer. NO, what is that.

They, my friend, are the Prescription Benefits Managers or PBMs.. entities who have taken over a great part of the delivery of health care and have caused the prices to escalate upwards dramatically.

These entities started out as companies which only processed pharmacy prescription claims for insurance companies for you, the employee, the consumer, and any other person who received medicine which had to be billed to an insurance company so that they would receive reimbursement. Now they have morphed into gigantic entities which make billions of dollars at yours, the employers, the government entities, and others expense. They are no longer in the background of medicine. They are running many parts of it. 

They started out by touting that they ( the PBMs) would save all of us money.  They convinced the insurers that they could save money by establishing drug formularies whereby they divided medical problems into categories and developed drug lists which allegedly would contain necessary drugs in each category so that the physician could choose one of those to treat his or her patient. This was a beginning in medical practice whereby the physician could only choose a drug that was on “their” formulary in “their” designated category- no matter if that was the drug of choice to treat the disease or not. And how, in many cases, did they choose the drug in each category? Well, simple. They selected those drugs from manufacturers who gave them the largest rebates. It may not be the best drug for that particular condition but it was the only one “their” formulary would permit.

Then came the “Prior Authorization” (P.A) debacle which is the bain of the physician’s office staff’s existence. As a practicing pharmacist for over 50 years and the owner of pharmacy entities, I have interviewed people for employment at my organizations who have told me that most of those people who are engaged with giving decisions as to whether you need the drug or not, have no idea what the professional is asking them. They are , in many cases, only following a script and do not have any knowledge or training in medicine, the disease, pharmacology, etc. regarding the question as to whether the drug should be approved so that the physician may prescribe it..And the insurer can pay for it. It became my practice, if I was denied, to ask to speak with their Medical Director because “he had to be licensed somewhere.” This was only because the ill-informed gatekeeper would end the inquiry there and not allow any further questioning.

Their “off shore” offices were another step in obstruction. I was told that they would get back with me-perhaps in 2 weeks. My patient needed the medication and that was not sufficient. The next step was to “demand” that I be transferred back to the United States and I allowed  to speak with their medical director.  That usually was successful. The issue here also is that many office personnel or health care companies do not understand the lengths to which one must go to get approval and then what happens in that situation.? You get improper or inferior medical treatment.

It is necessary to enlighten my readers to let them know that the entire system and quality is based upon the number and amount of the rebates given by the pharmaceutical industry to the PBMs. Your doctor can no longer practice medicine in the way that he knows best…he has to engage the PBMs for permission to use the drug of choice. That is where we are today. It is “medicine by rebate”. I sincerely hope that our President will understand who the real culprit of rising medication costs is and take action to rescind the “Safe Harbor” laws so that the PBMs can no longer hide behind laws and regulations that only serve as a “Safe Harbor” for them…and certainly not for you and me.

I will be giving you more insight on the high cost of prescriptions for you and your family in a following column.  Please address any of your questions to me at , “ASK YOUR PHARMACIST”   Newsletter @AmacFoundation.org

No More Middlemen! Reduce Drug costs and stop medication shortages!

Guest post by By: Holly L. Thacker, MD

Why Is There An Increase in Medication Costs?

I recently read a heart wrenching story about a young man with type 1 diabetes who died from preventable ketoacidosis. Since the cost of life saving insulin has sky rocketed, he was parsing out his insulin until his next paycheck as he couldn’t afford his insulin and died just three days before he was to get his next paycheck.

In my three decade career in the field of medicine, I have seen the emergence of so called ‘middlemen’ who control the market. These Group Purchasing Organizations (GPO) and Pharmacy Benefit Managers (PBM), dubbed as “Programs Bilking Millions” by our Cleveland Clinic Chief Pharmacy Officer Scott Knoer, emerge due to a loop hole in a federal law that allows for legalized kickbacks to these middlemen who control the market. This has led to increased costs of medicines and medical supplies and critical drug shortages.

For years, many of my patients used CanadaDrugs.com to get the same medicine at a fraction of the cost. However, this website has been shut down and it is illegal to get medications from another country. Daily, my nurses and Specialized Women’s Health fellows give patients information on how to reduce cost of their medications, including looking through coupons and trying to find rebates, ironically funded by some of these middlemen! We have told our patients to ask about the ‘cash price’ for medications as they are sometimes cheaper in cash without insurance as opposed to using medication insurance that is controlled by the PBMs.

I find that many of my patients are NOT aware of these GPO and PBM contracts. These contracts are highly lucrative for the middlemen and are this highly guarded and sadly a well-kept secret.

What Can Be Done About Expensive Medications?

1. We need to REPEAL this safe harbor loophole to reduce medication costs and end deadly drug shortages.

2. You can contact your two U.S. Senators and your U.S. House Representative.

3. Call and email your elected representatives. You can google to find your representative and call or email in just a few minutes.

4. Watch the video. Share this information with your friends and family.

5. I have become involved in the group Physicians Against Drug Shortages (PADS).

This is a bi-partisan issue, one that affects everyone regardless of political stripes. Both sides of the aisle are lobbied regularly to keep these kickbacks and control of the market in place.

Repeal of GPO Kickback Safe Harbor

It is critical that the GPO Kickback Safe Harbor {42 CFR § 1001.952} gets repealed as it:

  • Increases health care costs
  • Causes the unprecedented drug price spikes
  • Causes dangerous, even fatal shortages that began in 2006

It has been estimated that by eliminating these kickbacks in the healthcare supply chain we can save between $30 to $90 BILLION per year based upon published analyses.

If we can restore the drug marketplace so that inexpensive and available generic medications can become available to patients and rejuvenate the generic drug manufacturing industry in the U.S., it would allow for more competition, better prices and more available life-saving medications and supplies. Competition creates low prices and abundant supply. Competition lowers prices and improves quality. However, middlemen cartels inflate prices and can cause scarcity.

Be Strong. Be Healthy. Be in Charge!

-Holly L. Thacker MD

Senator Menendez: Stand Up Against Killer Kickbacks

Call Senator Menendez office today! (202) 224-4744 

Give him key questions to ask at tomorrow’s Senate meeting on PBM‘s. Please read below and call today. 

Dear Senator Menendez,

You are aware that the Senate Finance Committee meets on Tuesday, April 9, 2019,  to question Pharmacy Benefit Managers.I am truly sorry that none of the Senatorial staff from NJ could attend the meeting on April 1, at the Library of Congress. I am proud to have been intimately involved in the planning and execution of that meeting along with many others that have fresh working solutions for our health care crisis.  Patient advocates and physicians from across the aisle and across the country came together. We were especially moved by the presence of the Black Healthcare Coalition,  a group of 3000 pastors from across the country who are leaders for their African-American congregations.  It has been eye-opening for the Black Healthcare Coalition to learn their congregations are being targeted by the PBMs and GPOs, as is the rest of the nation.  The Safe Harbor for Legalized kickbacks for PBM and GPO cause artificial medication shortages and forces those with preexisting conditions to pay exorbitantly at the pharmacy counteror skip taking their medication(s) altogether. As Pastor Stephan Broden   framed the issue of legalized kickbacks, “It’s time for us to take this to the streets… because people are getting hurt.“

Congress is responsible for legalizing kickbacks for the GPO’s in 1987.  In 2003, the PBM’s  had legalized kickbacks extended to their industry.  The pay-to-play scheme for GPO is controlling which brand medications, solutions and devices are available in hospitals.   The PBM pay-to-play scheme is controlling what prescription meds are covered by insurance plans.   Patients and physicians are confronting life-threatening issues for patients, and neither the patients or physicians have any control.

Of the 150 drug shortages currently listed by the FDA,  roughly 90% of those medications have a single manufacturer because they bought the right to “sole-source contracting.” This unethical business practice by the PBMs was exposed in the second Senate Finance Committee hearings on February 26, 2019. I saw you both in attendance at that hearing, Senators.  I watched the hearing; many patients and physicians watched it, many of your constituents, and some are copied on this email.

Senator, you took an oath, just as physicians have taken an oath.  And we are fulfilling the Hippocratic Oath in the best way we know how, by speaking out for our patients who are hurt by continual drug shortages,  and high prices at the pharmacy counter and on hospital bills.Social media, The Black  congregations, the Hispanic population (Dr Wust Smith,  Pa pediatrician,  who is writing for the Hispanic outlook magazine and also attended the conference ) and the 1.8 million member Association of Mature American Citizens (also  in attendance Monday)  are all solidly behind repealing kickbacks for organizations who are robbing the American public of $200 billion a year while offering no research and development no manufacturing,  not even distribution of medications. As Pastor Broden says, “ We are gonna shine light and Make noise!”

Will you stand up for patients and the citizens of New Jersey, Senator Menendez, and ask the PBMs the following questions this Tuesday?

  1. How much do they take in rebates (kickbacks) from drug manufacturers and others. He should follow up with where do the so-called rebates go? They are supposed to go to the plan sponsor, employer, or individual purchasing the policy to keep prices down. They actually drive up prices and costs for all.
  2. Senator Menendez should insist that the PBMs make their rebates(kickbacks) transparent and report them to HHS, CMS, Congress and the public at large.
  3. Senator Menendez should advocate for the transparency and public report for all processes and payments by PBMs.
  4. Recommend that he advocate Senate and House to repeal the PBM safe harbor of 2002 that empowered PBMs to extort drug manufacturers for kickbacks called rebates, at the expense of patients, third parties, states, fed, and all taxpayers.
  5. Full repeal of 2002 PBM safe harbor for not only Medicare and Medicaid but also all payers including commercial and individual payors.

Senator, we are here to help you  take steps that are righteous and good in order to get our patients what they need which is affordable prescription medications, transparency of price and accessible quality healthcare.

Lastly, we would like to know  your position on the kickbacks themselves? Are you going to support Senator Braun’s Bill which will codify the Azar rebate rule as well as extend kickback repeal to the general insurance marketplace?

Simply put we are asking you, “do you stand for patients or do you stand for profits?”

Action Alert: Stop Killer Kickbacks

On Tuesday April 2, the Oversight and investigations subcommittee of Energy and Commerce is holding a hearing investigating Insulin pricing https://energycommerce.house.gov/committee-activity/hearings/hearing-on-priced-out-of-a-lifesaving-drug-the-human-impact-of-rising

Team: we need to and HAMMER them with calls.

Congressional Switchboard: (202) 225-2927
Chair Rep. Diana Degette Phone: (202) 225-4431
Vice Chair Rep. Joseph P. Kennedy (202) 225-5931
Rep. Janice D. Schakowsky (IL) (202) 225-2111
Rep. Raul Ruiz (CA) (202) 225-5330
Rep. Ann M. Kuster (NH) (202) 225-5206
Rep. Kathy Castor (FL) (202) 225-3376
Rep. John P.Sarbanes (MD) (202) 225-4016
Rep. Paul Tonko (NY) (202) 225-5076
Rep. Yvette D. Clarke (NY) (202) 225-6231
Rep. Scott H. Peters (CA) (202) 225-0508
Rep. Frank Pallone (NJ) (202) 225-4671
Rep. Brett Guthrie (KY) (202) 225-3501
Rep. Michael C. Burgess (TX) (202) 225-7772
Rep. David B. McKinley (WV) (202) 225-4172
Rep. H. Morgan Griffith (VA) (202) 225-3861
Rep. Susan W. Brooks (IN) (202) 225-2276
Rep. Markwayne Mullin (OK) (202) 225-2701
Rep. Jeff Duncan (SC) (202) 225-5301
Rep.Greg Walden (OR) (202) 225-6730

Put their numbers in your phone find 3 friends to do the same. Tell them to call and to have people call tomorrow and Monday to say:

“Insulin costs so much, because of GPO and PBM rebates. stand for people over profits, and make PBM and GPO kickbacks illegal.”

It’s NOT enough to support the HHS PBM rebate Rule, not enough to support S. 657 The Drug Price Transparency Act (S. 657), intro by Senator Braun of Indiana.

April 1, in the Library of Congress, Physician and Patient Advocacy Leaders will be telling the world exactly this on LIVE STREAM! The meeting attendees represent over 30,000 physicians. Lawmakers are most welcome to attend or send your Health Care Aide Congress must introduce and support a bill that repeals GPO kickbacks as well as PBM !!

How can anyone possibly support legalized kickbacks for GPO/PBM Pharma Middlemen who do no Research, no manufacturing and distribute no product?” The only ENDURING solution for safe affordable medications like insulin is full repeal of the legalized kickbacks enjoyed by BOTH PBM AND GPO. Remember, congress, you work for US!!!!

Tweeters can tweet and retweet right @ those lawmakers and @potus, @pence @senatorbraun, etc:

Make insulin affordable by repealing the PBM AND the GPO #kickbackskill https://www.theintell.com/opinion/20190306/guest-opinion-make-lawmakers-cut-kickbacks-hold-drug-companies-accountable .

American ingenuity and free markets can solve the problem of rising drug prices… if we allow it.

A couple of major threats to the health of the prescription drug supply chain are finally getting some long overdue attention.

  1. We are over-reliant on foreign production.

More than 90 percent of our prescription drugs are either manufactured in China or contain key ingredients that come from China, and China isn’t our best friend. Drugs on this Chinese-sourced list include antibiotics, birth control pills, cancer treatments, anti-depressants, statins (for high cholesterol), and HIV/AIDS drugs.

Why in the world are we outsourcing this mission-critical aspect of American medicine to countries hostile to our nation? (Not to mention the fact that countries like China are stoking the opioid epidemic by exporting deadly illicit Fentanyl to our shores).

Steve Jobs famously took the Obama administration to task over the main reason Apple had 700,000 factory workers employed in China, instead of the U.S:  D.C. is not business-friendly and it is impossible to build a factory in the United States due to regulations and unnecessary costs.

https://www.businessinsider.com/president-obamas-lack-of-resolve-frustrated-steve-jobs-2011-10

Unfortunately instead of cutting the red tape, Sen. Elizabeth Warren and colleagues are proposing exactly the wrong solution to bringing drug production back to the US of A. Instead of unleashing the market forces that built America into the #1 economy in the world, Warren hopes to import the same policies that sank behemoths like the U.S.S.R. and helped ignite the dumpster fires consuming Venezuela and Cuba: nationalized takeover of production.

Even the most profitable industries are not immune to the destruction that government-run production can bring. Case and point: Nationalization has driven Venezuela from oil powerhouse into the poorhouse:

So let’s look for proven solutions instead of dooming the drug industry to a fate of greater drug shortages, stagnation, and even higher prices.

Yes, there is already a sea of red tape and failed policies standing between American patients and inexpensive drugs. Thankfully, unlike Senator Warren, the Trump administration’s FDA Commissioner Scott Gottlieb MD and HHS Secretary Alex Azar seem truly interested in getting to work cutting through it by unleashing competition not warmed over communism.

Which brings us to the second major threat to the supply chain that is getting some overdue sunshine:

2) Kickbacks to Group Purchasing Organization and Pharmacy Benefit Manager Middlemen.

According to nomiddlemen.org:

GPOs and PBMs are perpetrating “a dangerous and unethical game of ‘pay-to-play.’ It’s the dirty little secret behind the outrageous cost of medications and the shortages of many drug and medical supplies. Unfortunately, a law was passed that allows these medical market “middlemen” to accept kickback payments from drug and medical supply companies in exchange for exclusive sales contracts! It created a government-sanctioned system of racketeering that would be illegal in any other industry.

 

The FDA along with HHS have signaled a willingness to end the kickbacks. And since the beginning of 2019 Senator Susan Collins and the new Chair of the Senate Finance Committee, Chuck Grassley have also stated they are going to take a close look at these shameful business practices

https://www.collins.senate.gov/newsroom/senator-collins-urges-administration-prioritize-reducing-drug-prices

https://www.grassley.senate.gov/news/commentary/grassley-top-priority-reducing-health-care-costs

Bottom line? American ingenuity can solve the problem of rising drug prices. If we will let it.

Click and Comment to End Killer GPO/PBM Kickbacks

Co-Founder of Physicians Against Drug Shortages, Bob Campbell, writes:

Go to this site and click on the right button “Comment Now”
https://www.regulations.gov/comment?D=HHSIG-2018-0002-0001

There are already a bunch of comments from PADS members and you are able to read them first for inspiration. Those representing organizations should also submit a comment on behalf of their organization’s membership.

I wrote the passage below and then added an attachment GPO/PBM Facts which is added here as an attachment. There are some great WSJ comments below too which may be an inspiration. I hope this makes it easy. Say who you are why you care and then cut and paste to your heart’s delight. Also you can just compose from the heart.

During our October 22 White House meeting I hope to have a “large number” of comments to get rid of the Middlemen Kickbacks. I will personally deliver a “click count” to the White House so lets aim to impress.

Best
Bob Campbell

Suggestions for Comments:

In my 29 year career in medicine I have witnessed the emergence of middlemen GPO/PBM Kickbacks. What began as a nuisance has become the largest cost driver in healthcare. HHS should formally recommend repeal of the GPO/PBM Safe Harbor. It is a policy that is long overdue. Independent analyses demonstrate 35%-47% of the consumer cost of drugs is used to fund kickbacks. These GPO and PBM contracts are highly guarded and kept secret for a reason. Repeal the Safe Harbor. Reduce costs and end deadly drug shortages.

Repeal the Group Purchasing Organization (GPO) Kickback Safe Harbor {42 CFR § 1001.952(j)} and make the American healthcare system great again.

The GPO/PBM Middleman is the cartel responsible for spiraling healthcare costs, They are responsible for the unprecedented drug price spikes and dangerous, even fatal shortages that began in 2006. The GPO executives and there enablers are growing immeasurably rich in the process. Meanwhile the American people are facing escalating hospital costs. Americans can no longer afford health insurance or medications.
HHS OIG, the Department of Justice, and the Federal Trade Commission are failing to intervene to restore a competitive healthcare supply chain. Congress has failed to confront the powerful businessmen who have criminalized the healthcare supply chain.
Eliminating kickbacks in the healthcare supply chain will save $30b-$90B per year based upon empiric published analyses.

What can saving these billions of dollars do?

Restore the drug marketplace so that inexpensive and available generic medications are once again available to patients.

Rejuvenate the moribund generic drug manufacturing industry in the United States with the creation of hundreds of new plants and tens of thousands of new high paying jobs for American workers.

Allow savings to the Medicare and Medicaid programs totaling $11.1B-$33.3B that would occur immediately with no reduction in health care delivery.

Restore competition in the purchasing of all healthcare supplies. Kickbacks create high prices and low supply. Competition creates low prices and abundant supply. Competition lowers prices and improves quality. Cartels inflate prices and diminish quality.

End dangerous drug shortages that sometimes hurt and sometimes kill patients
Ending the healthcare supply chain kickbacks are a required component of any remedy for the rising cost of healthcare. It is also a necessary step if we are to continue to improve the quality of healthcare in any and all healthcare delivery institutions across the country. The intersection of law, economics, and medicine is where the next chapter in improving patient safety and extending high quality health care to all citizens begins.

The anticompetitive healthcare supply chain should be replaced by one that omits the market allocation fees and vendor access kickbacks. It is a necessary and inevitable event. There is no pathway to affordable high quality healthcare until Medicine’s Mobster Middlemen are vanquished.

Letters to WSJ:

Drug Rebates Help Many, but Not Patients

Pharmacy-benefit managers that are middlemen to middlemen, two orders of magnitude between the consumer and producer.

Joseph Antos and James C. Capretta write in support of pharmacy-benefit managers (PBM) that are middlemen to middlemen, two orders of magnitude between the consumer and producer, with market discipline totally absent (“Drug Rebates Aren’t ‘Kickbacks’” (op-ed, Sept. 17). Certainly, in today’s electronic age pharmaceutical manufacturers could have websites for consumers to purchase their products after an electronic prescription is received. Alternatively, for a known additional amount, a pharmacist could advise and dispense. Americans with health accounts could pay directly for most drugs, especially generics. Insurance could supplement the individual’s payment to purchase the newer, more expensive items. Reforms of the drug-approval process to lower costs would be beneficial.

Kenneth A. Fisher, M.D.
Kalamazoo, Mich.

The entire PBM industry is all about kickbacks and market manipulation. The more rent takers, the more forced manipulation of consumers and the less transparency there are, the less free any market can be. Oligopsony is the antithesis of a free market and directly leads to increased consumer prices. The safe harbor allowing kickbacks and market manipulation for PBMs needs to be rescinded.

Howard C. Mandel, M.D., FACOG
Los Angeles

Rebates create an environment where higher-list-price drugs are favored, providing zero incentive for pharma companies to introduce lower-priced medicines in competitive therapeutic classes. Over the last five years, according to the Department of Health and Human Services, pharmaceutical spending has increased by 38% while the average individual health-insurance premium has increased by 107%. During the same period, rebates, discounts and fees paid by the biopharmaceutical industry to insurers and PBMs have risen from $74 billion to $153 billion—an increase of 107%. Rebates, discounts and fees haven’t slowed precipitous premium increases.

Because PBMs retain a portion of negotiated rebates and other price concessions as compensation for their services, list prices are rising rapidly even as net prices have held steady. Unsurprisingly, manufacturers are willing to raise prices and transfer the greatest list-price-based rebate value to middlemen to secure preferred formulary position at the expense of real free-market competition, while also limiting the therapeutic options of physicians and patients.

Most rebates are generated from the medicines needed by the sickest patients, including those with cancer, autoimmune disorders and HIV. These patients pay 10 times more out of pocket than healthy patients and are forced to try cheaper or more rebate-rich drugs before getting medicines that work best. Faced with higher out-of-pocket costs and barriers to access, people are more likely to stop their treatment, getting sicker and more expensive to treat.

Rebates targeting the most vulnerable Americans aren’t just kickbacks, they are discriminatory and deadly measures as well.

Peter J. Pitts, Robert Goldberg
Center for Medicine in the Public Interest
New York

Legalized kickbacks for an industry that is controlling the prescription market? This has turned the pharmaceutical market into a pay-to-play operation as manufacturers can pay an increasing kickback for a coveted place on the formulary. Euphemistically calling them rebates is simply a way to keep the money flow of health care hidden from the unsuspecting public.

Marion Mass, M.D.
Perkasie, Pa.

Forget Pens, How About Banning Kickbacks?

Back in 2008 the Pharmaceutical industry ostensibly took the high road and called for a moratorium on branded items handed out to doctors. No more free pens. Then in 2010 the Physician Payment Sunshine Act cemented in place red tape impeding other gifts to physicians. No more free lunches … with out filling out a form for Uncle Sam.

Well the truth is: “We’ve got big problems in health care, and I don’t think the problem is pens,” stated Houston physician Stephen Lapin, MD, speaking what was on the mind of virtually, if not literally, every physician.

These changes didn’t accomplish much if anything but a few warm fuzzy feelings for politicians, while the folks in C-Suites likely congratulated each other with a slap on the back for yet again shifting the blame onto doctors and covering up their own corruption.

This time doctors are fighting back and asking for real change, change with the potential to save patients to the tune of $100 billion dollars. How? By axing out the Pharmaceutical industry kickbacks being used to bribe the middlemen in control of American’s pharmaceutical benefits.

Your action is needed by July 16 to help end these improper bribes that are driving up costs, creating shortages, and controlling the prescriptions covered by your plan.

Speaking out is easy and instructions can be found here: https://aapsonline.org/alert-and-special-legislative-update-pharmacy-benefits-managers/.