Amazon Rx: a cure for supply chain kickbacks or just another poison pill?

Amazon is throwing its hat into the pharmacy business and Bob Campbell, MD of Physicians Against Drug Shortages weighs in on what this could mean:

The Amazon folks do not show their cards. When this began it was called the 1492 Project before it was reported by the press. I have asked them directly are you trying to undercut the GPO/PBM supply chain or do you just want to get in on the kickbacks? They didn’t say then and they don’t say now.

Some insights…they hired a ton of people from the GPO industry presumably to understand the supply chain dynamics.

Their initial focus was the hospital supply chain but they subsequently backed down from that publicly due to the “special relationships” of GPO and Hospital entities. Now their focus is the outpatient pharmaceuticals.

I have maintained that Amazon is the only non governmental entity with the scale and resources to create a parallel competitive marketplace as an alternative to the normal anticompetitive market. Still they will never dominate only survive and carve out a niche. The easier more lucrative approach would be to collect kickbacks. Amazon is different enough they may do the right thing. The Bezos model is your margin is our opportunity. The 43% Kickback rate in outpatient Pharma plus the usual participant margins makes for a fat gross margin to target.

Until Amazon says what they are really up to we can only speculate.

Shenanigans, Larceny, And Fraud Define The Corporate Practice of Medicine

Bob Campbell, MD, co-founder of Physicians Against Drug Shortages writes in:

I have been gathering a lot of information for a “Corporate Practice of Medicine” project. Not sure what will come of it if anything but some of the shenanigans are very harmful at times. At other times just simple larceny.

The federal court in Philadelphia has issued a new decision in Aetna v. Mednax/Pediatrix Medical Group, 2018 WL 5264310 (E.D. Pa. 2018) involving fraud allegations asserted by Aetna against Mednax, a pediatric private equity firm.

The federal court held that Aetna’s allegations regarding Mednax’ alleged fraud upcoding scheme could proceed in litigation. Aetna alleged that Mednax routinely listed CPT codes that exaggerated the care needed and performed by designating infants as being sicker than they truly were so that it appeared as if the infants required more intensive treatment than was truly the case. This process allowed Mednax to submit inflated bills to Aetna so that Aetna would reimburse Mednax for more money than was justified.

Aetna also alleged the upcoding scheme permeated Mednax’ operations. Mednax trained and required physicians to engage in upcoding and encouraged physicians to perform unnecessary services to support higher billing rates. Mednax also sometimes inflated the codes itself above the level indicated by the physicians before submitting the claim forms. Aetna obtained evidence from former employees of Mednax that were aware of the upcoding scheme.

The court ultimately held that the specific types of upcoding that allegedly occurred, such as listing an infant as requiring critical care rather than general hospital care, sufficiently established the legal basis for fraud.

The federal court also allowed the litigation against the private equity firm controlling pediatric/neonatal intensive care physicians to proceed far beyond the 2-year statute of limitations based upon the “continuing fraud violation doctrine.”

I just wanted to keep you apprised of additional developments in the fraud realm in the context of private equity firms and some of the concerns raised about driving profits improperly. This is literally in your backyard, but also involves an alleged nationwide scheme.

You are either FOR Killer GPO PBM Kickbacks or Against Them

Bob Campbell, MD, co-founder of Physicians Against Drug Shortages writes:

Want to introduce an element of competition into healthcare? Ending the GPO/PBM kickbacks is the best place to start. Low hanging fruit and no room for compromise. You are either FOR sole source pay to play inflationary kickbacks or against.

So far since Trumps rumored new introduction of barriers to the kickbacks have been “rumored” to be “possibly written for possible introduction “ as new HHS rules Sen Warren and Hatch and Congressman Walden have emerged to keep the kickbacks in place and unfettered by HHS. They have not seen the rumored rules but if the rules might interfere with the essential kickbacks then the rules must never be enforced. Not good for America. Senators Toomey and Casey of Pennsylvania are both long time defenders of pay to play kickbacks. Pennsylvania Senate campaigns are very expensive and the PBM GPO cartels are very generous to supporters. Remember Trump can only erect barriers to access to the safe harbor. Congress made kickbacks and racketeering legal for GPOs and PBMs with the safe harbor law. Only Congress can make pay to play payola illegal again. That is an enduring solution. Trump cannot do that. Congress can.

A bill that is written, reviewed polished, and ready to go for any courageous Member of Congress. One version for the House and one for the Senate. President Trump says not one person in Congress is capable enough to take action on this matter. Is anyone willing to take him up on his challenge? All we need is a Healthcare Hero.  How about 100 new generic medication manufacturing plants with 200 jobs at each plant all in the state that leads the way. High paying clean manufacturing jobs that will stay busy throughout economic boom and bust cycles. Hundreds more just like it across the country, but the state of the Member of Congress who will introduce the bill gets first dibs.

A capital investment frenzy occurs if this bill passes. We need chemotherapy, saline, potassium chloride, potassium phosphate calcium carbonate, calcium chloride, sodium bicarbonate, epinephrine,ephedrine, norepinephrine, dopamine dobutamine, glucose, nitroglycerin, cardiac surgical drugs, antibiotics, obstetric medications, pediatric seizure medications and hundreds more.

I need drugs to paralyze people and unparalyze them. I need drugs to increase blood pressure and increase heart rates when they are too low. I need drugs to decrease blood pressure that is too high and slow down heart rates that are too high. Right now using smoke and mirrors. We should postpone all cardiac surgery until the Unsafe Safe Harbor is repealed. Right now we have Fake Anesthesia.

Trust me that is way more dangerous than Fake News. No more Fake Solutions from politicians for explosive healthcare costs and drug shortages. Exclusive Pay to Play Market Allocation Contracts is all that is keeping American companies from lowering costs for drugs and ending drug shortages. All contracts are written by an unnecessary extra layer of Middlemen inserted into the healthcare supply chain with a uniquely powerful ability to demand kickbacks from manufacturers to permit them to make lifesaving medications and medical devices for Americans who need healthcare. Drug Shortages never had to happen and can be ended. Healthcare Kickbacks never had to happen and can be ended.