The “Vampire Squid” The Enemy!
Now, that is money. Express Script Profits for 2011. Ready to be sent to The Caymans
Here you go. THE VAMPIRE SQUID.
The Vampire Squid are the PBMs. They are the tail that wags the dog. It is our own fault. As in other areas, we allowed non-pharmacists the nelm for the ship.
PBMs were not in existence 20 years ago. They saw an opportunity and they pounced. They went to the big insurers and said, “Hey, we can save you money. Let us administer your prescription benefits. We can save you money.
What they did not say is: “The way we will save you money is by ripping the skin off the pharmacists’ backs.”
PBMs provide NO medical care.
They are just specialized BIG BANKS. They have insinuated themselves into the “Cash Cow” Industry. It ain’t ours anymore. It is theirs.
PBMs are for-profit engines.
Okay, let’s see if this one has legs. I have to go. V and I are getting prepared for our drive back to Galveston.
Let’s see what you think. I’ll add to this later.
Comment on IT IS OUR OWN FAUL
7/16/2012 Found this in “Comments”. Too good to leave there.
From Greg Alston
You don’t have to rant about PBMs just ask the right questions.
Congressman, do you believe that mandatory patient counseling is a good law? Well thank you sir, so do I. But are you aware that PBM Mail Order plans make counseling ineffective?
Are you aware sir that the single biggest cost driver of healthcare dollars is the utilization of hospital services? Thank you, sir so am I. But did you know that Mandatory mail order plans virtually guarantee that these costs will skyrocket?
Well let me explain.
Seniors take an average of 6+ medicines and have 3+ chronic diseases being treated. At the same time their drug regimens have expanded the complexity of care has increased because they see multiple physicians.
The number one cause of hospital admissions for seniors is Drug Misadventures and the next biggest priority for their healthcare has been the problem of poor medication adherence.
So basically, a benefit design that forces or coerces seniors to use mail order takes our most frail and needy patients and puts them at the greatest risk. Just about the time they are beginning to lose cognitive function and require more careful monitoring we force them to abandon their neighbor, who has been caring for them, and leave them to fend for themselves.
Does it really make sense to increase the number of pills in their homes and decrease their contact with a professional pharmacist , to lessen drug misadventures and improve medication adherence? And the cost of these problems to the healthcare system is billions!
In addition, Mail Order pharmacy introduces multiple new potential errors in to the drug delivery system.
A. Efficacy-
Is it really in the best interests of our nation to put 90 day supplies of 6 different drugs in a bag and ship them across the country? These drugs are subjected to temperatures in excess of 104 degrees and humidity far in excess of the mandatory storage requirements any Brick and Mortar pharmacy must adhere to. (1)At the very least their is no way for the patient to prove that the drug was kept below 78 degrees like the storage labeling requires of a retail pharmacy.
Most state laws define as adulterated any drug that exceeds its 78 degrees. How can drugs left in mailboxes at temperatures that exceed 120 degrees comply with this standard? The interior temperature of a vehicle can reach 123 degrees within 60 minutes if the ambient temperature is 80 degrees. (2) Thirty-eight Children die each year from being left in their cars for just a short time. If the heat can kill dogs and children, I believe it will ruin your medication.
B. Drug Utilization Review-
Patients allocate their drug purchases between mail order and retail. As a consequence our pharmacy records are incomplete. When I run a DUR screening with incomplete drug histories, because I don’t know which drugs a patient is getting from mail order, how can I possibly provide accurate advice to patients? How many drug misadventures would be prevented if the patient used a good local pharmacist? The Asheville project suggests quite a few.
So we make mandatory counseling a law and then we insure that this counseling is inaccurate? That makes absolutely no sense. It is no wonder drug misadventures are climbing.
C. Convenience-
There is no drug delivery pathway more convenient than same day or same hour delivery by a local pharmacist who correctly stores and monitors the drug, as well as provides the counseling necessary to ensure optimal drug use. Our patients don’t see coming to the pharmacy as an inconvenience. Many seniors love coming in to stay connected to the their friends and community. So with senior depression and loneliness such a huge issue how exactly is forcing them to sever their social ties good for them? We treat our patients like family we laugh, cry and play together. Are you suggesting that a website or 800 number is better than a real face-to-face relationship. Don’t judge all community pharmacies by the standard of a multi-site operator. The independent pharmacy is a much more engaged customer base.
D. Illegal Diversion-
When I did home visits to my patients in Sun City, I frequently discovered thousands of pills stashed all over the house, in large mail order bottles. And what do seniors do with too many pills? They trade them over the back fence.
It was very common for Mabel (Shout out to Lonnie Wilson), to share extra meds with the bridge club. But even more frequent is for grandkids and home care aids to help themselves to party pills. Is the risk of illegal diversion greater or lower by shipping out three times the quantity?
E. Freedom of choice
How does economically coercing patients in to mail order plans by artificially lowering the co-payments for mail order even remotely approach free choice and open access. If you removed the co-payment advantage mail order would disappear overnight because there would be no reason to use it.
I’m sorry Mabel, you can’t go to a pharmacist you trust and employs your neighbors because my company would like to make more money.
That is essentially the marketing truth for the PBM Mail Order. You all know the truth, share it with your customers.
PUTT has the proof to show you that the Mail Order mantra about saving money is a carefully fabricated lie. So support PUTT! But what I am saying is more fundamental when it comes to talking to your patients.
Patients may be sympathetic to your plight but not really engaged with helping you fix this mail order issue until you make it personal for them.
Here’s how to make it personal.
Points A ,B , C, D, and E above make it personal.
Ask them questions like:
You’ve paid for your medicine wouldn’t you like to know it is safe to use?
Wouldn’t it makes sense to keep drugs from being illegally diverted?
Wouldn’t it make more sense for you to trust your healthcare to me rather than some faceless 800 number in a different state?
Wouldn’t you like to know that someone cares about you as an individual and get help you out if your are in trouble?
How many times last year did that mail order pharmacist talk to you at church, share a cup of coffee with you or give you a hug?
We have the right story we just have to get much better at telling it.
Stay in touch with project Third Act by signing up on my BLOG List
United States Pharmacopeia has the proof that shipping puts drugs at risk.
(1)USP Report Page 8: http://www.usp.org/sites/default/files/usp_pdf/EN/aboutUSP/theStandard2010Spring.pdf
(2) http://ggweather.com/heat/#heating
23 Comments »
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Couldn’t agree with you more, PBMs are the enemy, the many legal and ethical violations they repeatedly commit are just terrible. Here is an article I wrote on the topic, I hope I can leave it here: http://studentdoctor.net/2012/06/pharmacy-benefit-managers-recent-developments-and-implications/
Spread the word, PBMs are bad news for the profession of pharmacy!
I wrote about this company back in April http://www.pharmaciststeve.com/?p=1053
It was the merger of two companies .. that now call themselves Catamaran http://www.catamaranrx.com/
Bottom line.. just another middleman… sucking money out of our healthcare system.. without providing any healthcare to individuals…just profits to the stockholders…
Graduates in my class I’m most likely to consider friends all thought going into PBM residencies was the pinnacle of pharmacy practice for them.
@Calipharma!
Ha! Calling MDs to argue about diagnostic criteria so you can take away Mrs. Jones Ondansetron’s reimbursement of $0.75. Geez, how did I let that opportunity to better the world slip through my fingers!
Been there done that YoungGun! Now I’m on the owner side of this despicable practice. Live and learn….
The PBM’s are huge ‘leeches’ on our healthcare system. They are making tons of money by sucking it from insurance companies, employers, drug mft’s, and pharmacies. They are a big threat to pharmacy. And, they are increasing the price of drugs. The companies that provide health insurance to their employees are being ‘ripped off’ by the PBM’s. Their professed purpose for existence is to save money for the insurance company(which can then lower premiums) is a big illusion. The PBM’s have multiple ways of skimming money from our healthcare system. Here is a link to an article that spells this out: http://www.policychoices.org/pharmacy_benefit_managers.shtml
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“The three largest PBMs – Medco, Caremark and Express Scripts – administer 80% of insured prescriptions and 90% of insured mail order prescriptions.” Don’t you think that 3 companies that control 80% of prescription reimbursement through insurance third parties constitutes a monopoly? Is FTC must be corrupt?
I couldn’t agree more. I see it everyday. It’s getting so bad that the PBMs are playing so many games just trying to get more business for their mail-order with bogus script rejects. They make it so hard for someone to get a med through prior authorizations that the patient will just pay for it out of pocket or do without something they need. PBMs are also the biggest reason I am working with a skeleton staff trying to multitask to the point of endangering patient safety. The corporate “bean counters” definitely share responsibility, but PBM reimbursement was the cause. They are middlemen that only exist to increase profits for their shareholders. They have very little incentive to focus on providing quality healthcare….and they have gotten too BIG!
Haha YoungGun. Perfectly reasonably minded people in my class (in a soup of complete awkward retards) choose this track of work so they can have an office and be off their feet.
Give me retail any day. Despite the stakeholders, it’s way more gratifying.
…eh em until further notice, til transfer coupon do we part.
There is not one damn thing gratifing about working retail. It is a shitty job that is only going to get shittier! I bailed out of retail to work for a PBM and it is the best thing I have ever done. I would be a garbageman before i went back to retail.
@Peon… no one seems to stop and look at the pricing trend in pharmacy… Since the PBM’s have basically taken over the prescription process… drug costs have went from 6% of overall medical costs to 12%
When they started (1970) .. there was virtually no generic utilization … and now it is 70%-80%??
Taking the average Rx price in 1970 was $6.00 +/-.. with NO GENERICS… apply the CPI and it would be in the $30 range today.. with all that generic utilization.. we have today… one one expect that price to be will at or below that number
And the average Rx price today??? I found some stats from 2007 … of 120 for brand and 34 for generics… you can probably add 7%/yr for brand price increases putting brand in the 150-170 range…
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Average for all Rxs in 2007 — $70.00/each
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The big difference over 40 years… the push for generics by all the insurers and all the bureaucracy and paper shuffling imposed on the system by the payors … in trying to save money… has the cure been more expensive than the disease ?
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How many more people could afford their medications today if the system had been LEFT ALONE ?
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Like everything else with a bureaucracy .. once it gains traction .. its mere design is to be self-perpetuating growth entity… decommissioning such a bureaucracy is nothing more than a “pipe-dream”.. even when the bureaucracy itself .. does not meet its initial goals and/or is even detrimental to whatever portion of society that is involve in or have oversight over.
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IMO.. the whole PBM industry is a “poster child” for such a bureaucracy.
We all recognize that mft’s of new drugs are pricing their drugs for the PBM’s. The PBM lists the drug on their coverage list and gets a kickback from the mft. The one interest of the PBM is the kickback. This is where they make some money. The high cost of the new drug is simply passed along to the insurance company that passes it along to the policyholder. Why do mft’s price for PBM’s? Because the majority of people have insurance and the one thing the mft wants to do is get their drug on the PBM list. They price it high because they have to pay the PBM that kickback for listing the drug. The listing of drugs on the coverage list by PBM’s is based on kickbacks and not on saving money for the insurance companies. The PBM’s have gotten so big and to the point that only a few control the market that they dominate the prescription market in the US.
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Steve mentioned the increased utilization of generics once the PBM’s came on the scene. Now, suppose there had been no generics? In the 1970′s, the price of drugs was not beyond the reach of people’s ability to purchase them. And, this was a period when drugs were all name brand. What has happened in the intervening years? Has the introduction of generics actually saved healthcare dollars? Or, without the PBM’s, would mft’s be pricing their drugs at a more reasonable price? Has the introduction of generics actually saved healthcare dollars or just shifted the market away from name brand to generics? I can remember when mft’s of name brand products would price drugs cheaply. For you older pharmacists, remember buying your winters supply of antibiotics because a mft had a good deal on it? The antibiotics were not expensive and the pharmacies could mark them up quite a bit and make a good profit. Without the introduction of PBM’s, the name brand mft’s would still be pricing drugs where people could afford them without having to have insurance. The insurance industry has increased healthcare costs in the US.
Pharmaciststeve,
It’s a little short sighted to JUST blame the PBMs.
When you account for PhRMA’s R&D, and the likelihood of the drug actually getting approved, you can see why they justify their prices. The advancement in biologic drugs doesn’t come cheaply.
@ Peon.. I prefer the term “SENIOR PHARMACIST”.. “older pharmacist” has such a NEGATIVE tone…:-) anyway.. back in the ’70 when Congress was looking at MAC.. the then FDA commissioner Donald Kennedy .. told Congress… that “they would never compromise quality for price”.. after the MAC legislation was passed.. the quote became ” We can accept a variation in quality TO MAINTAIN A PRICE ”
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How much of this bureaucracy that is suppose to save the system money.. is the underlying reason why we have 30-50 million without insurance and can’t afford their medications?
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from my perspective.. the health care bureaucracy is alive and well… and employs a lot of people
You don’t have to rant about PBMs just ask the right questions.
Congressman, do you believe that mandatory patient counseling is a good law? Well thank you sir, so do I. But are you aware that PBM Mail Order plans make counseling ineffective?
Are you aware sir that the single biggest cost driver of healthcare dollars is the utilization of hospital services? Thank you sir so am I. But did you know that Mandatory mail order plans virtually guarantee that these costs will skyrocket?
Well let me explain.
Seniors take an average of 6+ medicines and have 3+ chronic diseases being treated. At the same time their drug regimens have expanded the complexity of care has increased because they see multiple physicians.
The number one cause of hospital admissions for seniors is Drug Misadventures and the next biggest priority for their healthcare has been the problem of poor medication adherence.
So basically, a benefit design that forces or coerces seniors to use mail order takes our most frail and needy patients and puts them at the greatest risk. Just about the time they are beginning to lose cognitive function and require more careful monitoring we force them to abandon their neighbor, who has been caring for them, and leave them to fend for themselves.
Does it really make sense to increase the number of pills in their homes and decrease their contact with a professional pharmacist , to lessen drug misadventures and improve medication adherence? And the cost of these problems to the healthcare system is billions!
In addition, Mail Order pharmacy introduces multiple new potential errors in to the drug delivery system.
A. Efficacy-
Is it really in the best interests of our nation to put 90 day supplies of 6 different drugs in a bag and ship them across the country? These drugs are subjected to temperatures in excess of 104 degrees and humidity far in excess of the mandatory storage requirements any Brick and Mortar pharmacy must adhere to. (1)At the very least their is no way for the patient to prove that the drug was kept below 78 degrees like the storage labeling requires of a retail pharmacy.
Most state laws define as adulterated any drug that exceeds its 78 degrees. How can drugs left in mailboxes at temperatures that exceed 120 degrees comply with this standard? The interior temperature of a vehicle can reach 123 degrees within 60 minutes if the ambient temperature is 80 degrees. (2) Thirty-eight Children die each year from being left in their cars for just a short time. If the heat can kill dogs and children, I believe it will ruin your medication.
B. Drug Utilization Review-
Patients allocate their drug purchases between mail order and retail. As a consequence our pharmacy records are incomplete. When I run a DUR screening with incomplete drug histories, because I don’t know which drugs a patient is getting from mail order, how can I possibly provide accurate advice to patients? How many drug misadventures would be prevented if the patient used a good local pharmacist? The Asheville project suggests quite a few.
So we make mandatory counseling a law and then we insure that this counseling is inaccurate? That makes absolutely no sense. It is no wonder drug misadventures are climbing.
C. Convenience-
There is no drug delivery pathway more convenient than same day or same hour delivery by a local pharmacist who correctly stores and monitors the drug, as well as provides the counseling necessary to ensure optimal drug use. Our patients don’t see coming to the pharmacy as an inconvenience. Many seniors love coming in to stay connected to the their friends and community. So with senior depression and loneliness such a huge issue how exactly is forcing them to sever their social ties good for them? We treat our patients like family we laugh, cry and play together. Are you suggesting that a website or 800 number is better than a real face-to-face relationship. Don’t judge all community pharmacies by the standard of a multi-site operator. The independent pharmacy is a much more engaged customer base.
D. Illegal Diversion-
When I did home visits to my patients in Sun City, I frequently discovered thousands of pills stashed all over the house, in large mail order bottles. And what do seniors do with too many pills? They trade them over the back fence.
It was very common for Mabel (Shout out to Lonnie Wilson), to share extra meds with the bridge club. But even more frequent is for grandkids and home care aids to help themselves to party pills.
Is the risk of illegal diversion greater or lower by shipping out three times the quantity?
E. Freedom of choice
How does economically coercing patients in to mail order plans by artificially lowering the co-payments for mail order even remotely approach free choice and open access. If you removed the co-payment advantage mail order would disappear overnight because there would be no reason to use it.
I’m sorry Mabel, you can’t go to a pharmacist you trust and employs your neighbors because my company would like to make more money.
That is essentially the marketing truth for the PBM Mail Order.
You all know the truth, share it with your customers.
PUTT has the proof to show you that the Mail Order mantra about saving money is a carefully fabricated lie. So support PUTT! But what I am saying is more fundamental when it comes to talking to your patients.
Patients may be sympathetic to your plight but not really engaged with helping you fix this mail order issue until you make it personal for them.
Here’s how to make it personal.
Points A ,B , C, D, and E above make it personal.
Ask them questions like:
You’ve paid for your medicine wouldn’t you like to know it is safe to use?
Wouldn’t it makes sense to keep drugs from being illegally diverted?
Wouldn’t it make more sense for you to trust your healthcare to me rather than some faceless 800 number in a different state?
Wouldn’t you like to know that someone cares about you as an individual and get help you out if your are in trouble?
How many times last year did that mail order pharmacist talk to you at church, share a cup of coffee with you or give you a hug?
We have the right story we just have to get much better at telling it.
Stay in touch with project Third Act by signing up on my BLOG List
United States Pharmacopeia has the proof that shipping puts drugs at risk.
(1)USP Report Page 8
http://www.usp.org/sites/default/files/usp_pdf/EN/aboutUSP/theStandard2010Spring.pdf
(2) http://ggweather.com/heat/#heating
For all of their business “training” I don’t think that these middle managers realize how much it is costing to deal with these insurance claims. When it takes an hour or more of a techs time to deal with one measley claim over multiple days and factor in multiple nearly impossible claim procedures times days times weeks etc…they are either ignoring it or cooking the books..in any case these giant drug chains are essentially allowing the insurance companies and PBM’s to destroy them. You would have to be nutz to buy the stock.
Loup Garrou, I just don’t understand these chains either. Here we have RiteAid trying to guarantee rx’s in 15 minutes. There have been times that I have spent longer than that on just trying to get a rx paid by the patient’s insurance, and that does not even include the filling time. Yes, the PBM’s are going to destroy the chains. Take Walgreens as an example. They walked away from ESI because they felt they could not make enough money. The rest of the chains, instead of following Walgreen lead, simply went like sheep to the slaughter.
Is it only my perception, that drug pricing/costs have been SET by the middleman, yet BLAMED on the government?
I can remember – before Medicaid – and the local trustee paid for medications.. they automatically claimed a 10% discount.. because they were the government… since the prices were U&C.. when you billed them.. you added 10% to the price you submitted to them.
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The government was the fist to go after the Pharma’s for a mandatory discount.. if they wanted their meds paid for by Medicaid…
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I find it hard to believe that the PBM let this go by without notice. In the 90′s when the PBM’s got close to or passed 50% of the Rx business…
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They starting to mirror the Feds program.. they couldn’t mandate a discount like the Feds.. but .. they could shift market share of a class of drugs.. I suspect that it first started with their mail order programs and then was expanded to all their card programs.
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I see it rather as a teeter-totter .. if Feds do something to extract dollars from the system.. the PBM’s come along and uses that with a TWIST… and so on and so on..
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I had a RPH within a state Medicaid dept years ago tell me.. that they would not consider any upward change in Rx fees until they get a lot of complaints of availability of service from the pts.. and then they MAY discuss what they are paying… Their thought process is that as long as there is adequate availability – per pt’s perception – pharmacies are making a profit and it is not the state’s responsibility to make sure that pharmacies make a profit.
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Rite Aid is a good example that making a profit is not necessary to remain in business… you just keep selling stock and borrowing money… until no one is interested… and then the whole thing crumbles like a house of cards.
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On a separate note… last night on Huckabee show (Fox 20:00 EDT) which repeats tonight… he had three MD’s on there.. all different specialties .. each had either sold their practice.. or getting ready to.
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Seems that other than the poor reimbursement that we know about.. apparently CMS is starting to audit them ..like the PBM’s do us and demanding refunds for lack of in depth documentation errors… fines of $11,000 was mentioned… It was also stated that the GP on there is now writing off 40% of their billing rate from what they are paid.
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Another interesting point. my PCP’s office went to EHR about five years ago.. the last time I was in there.. they were “adjusting” to new EHR software.. apparently CMS has MANDATED that there are only THREE different software EHR systems that a “acceptable” to CMS.. So they had to toss the money and training they had in a workable software and reinvest in new software and training…
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How would you like to be in the software business and have the FEDS … grant “special mandatory status” to your competitors.
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IMO.. there are going to be A LOT of monopolistic mergers with FTC/CMS’s approval. In the medical area.. IMO .. the ACO (Accountable Care Organizations) are going to be the nucleus of these entities.. If you have a chance to get on board in the near term.. you had better jump on.. otherwise.. you may find yourself on the outside .. looking in…
About CMS auditing the docs, they are auditing pharmacies too. We frequently get letters from CMS wanting copies of rx’s we have billed to them. It is a pain for us to get a rx paid by Medicare Part B. Most are for diabetic supplies. There are a number of requirements concerning the rx. Does it have the medicare diagnosis code on it and was it signed by the doc. We have one transplant patient. We have spent a heck of a lot of time trying to get her transplant drugs paid by Medicare. I don’t get to see the reimbursement on these rx’s, but my guess is that we are not making any money on them. The pharmacy manager and I have discussed the transplant patients and we have decided not to take any more new transplant patients. Wal-Mart has a specialty division and we will just turn them over to that division. It is just too much of a hassle to deal with Medicare, and if we fail to verify that a rx meets all the medicare requirements and we get audited, then we will lose money on the patient. I doubt that Wal-Mart makes any money on the diabetic supplies billed to Medicare Part D. I would like to hear from some other folks here that may know about this.
@Peon.. sounds like they are only after those products that use to be paid for by Part B.. I just wonder if you aren’t submitting them to a Part D provider and they are having to send them on to the DMERC to get reimbursement. I would suspect that there was someone with the bright idea that allowing all pharmacies to bill via Part D .. because not all pharmacies have a Part B vendor license and they wanted to make diabetic supplies and rejection drugs more readily available. I use to be a Part B vendor and if you are not seriously involved in that billing arena .. you are out of your league… and will probably end up losing more money than you ever could potentially make.
Steve, no Wal-Mart had this ‘bright idea’ to handle Medicare Part B prescriptions, which for us is diabetic supplies, transplant drugs, and inhalation solutions. We transmit the claim to some place that forwards it to Medicare. We don’t do a lot of these and keeping current on just how to do it becomes a problem and we usually have a difficult time getting the claim paid.
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As for myself, I think it is just too much work, too much time involved, and too much of a hassle to deal with Medicare Part B. I doubt Wal-Mart makes any money on the rx’s. Of course, their idea is to get the customer in the door and they will sell them something else.
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Greg makes a good point about these senior citizens getting 90 days supply of meds and not taking them. Doc may have stopped them from taking a drug, but the mail order keeps sending it and the patient never notifies mail order. So, the meds just pile up in the house. I think a good case could be made that mail order is more costly than a pharmacy filling the meds. There is an enormous waste with mail order. I remember on one occasion a lady phoning me about an injectable for her husband. It had been in the mail box over the weekend and the temp was above 100 degrees. She asked me if it was any good and I said no. Each vial cost about $1,000. I am not kidding! And, who says mail order is cheaper?
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Maybe we should be prodding some university or government agency to do a study of the drugs received by folks in their mailboxes when the temperature is in excess of 100 degrees.
@Peon .. I am aware of at least one such study.. it was done on an inhaled steroid or nasal steroid and summer heat… by the time the product had reached the patient.. they tested at 50% of labeled potency.
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The problem with our regulations is that the Manufacturer, Wholesaler and pharmacy are required to meet temp storage requirements… once the pharmacy drops the meds into some courier service.. all bets are off…. in regards to storage requirements having to be met.
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Once again.. our regulations were written when mail order wasn’t in existence … and here we set with dated regulations… that most everyone knows does not serve patients well…but.. it does serve some well… whose focus is profit$ over patient $afety.