When pharmacy-benefit manager cuts put lives in jeopardy
http://www.dispatch.com/news/20180521/when-pharmacy-benefit-manager-cuts-put-lives-in-jeopardy/1
Jo Anna Krohn is used to emergency calls. As director of Port 45 Recovery in Portsmouth, Krohn works with addicts in an area that is seen by some as ground zero for the nation’s opioid epidemic.
But last fall, she received a call that left her panicked.
It was from a local pharmacist warning that he could no longer stock a generic version of Suboxone because the state was reimbursing him so little for it that he was losing money. Most of the 165 recovering addicts being treated at Port 45, about 90 miles south of Columbus near the Ohio River, rely on the medication to stay clean.
“It was very frightening,” Krohn recalled.
Roger Flautt, pharmacy manager for Blackburn’s Pharmacy in nearby New Boston, said his was one of a handful of area pharmacies that continued stocking the drug even though “we were losing our shirts.”
“I thought this was going to be a disaster. When tablets weren’t available a year ago (because of a manufacturing issue), overdoses tripled,” Flautt said. “When this drug is not on the market, overdoses go up.”
Pharmacists in Dayton, Marysville, Circleville and other Ohio cities told The Dispatch that they, too, saw a rapid decline in reimbursements — drops of nearly 80 percent — for generic Suboxone last fall, endangering the recovery of innumerable addicts caught up in the state’s opioid crisis.
The decision to slash rates was made by CVS Caremark, which is by far the state Medicaid program’s largest pharmacy benefit manager. And it remains one the nation’s most stark examples of the potentially life-and-death impact of hidden price manipulation by these PBMs — little-known middlemen in the drug supply chain that, on the one hand, decide how much money to give pharmacies for each drug and, on the other, determine how much taxpayers pay through Medicaid for those same drugs.
The furor caused by last fall’s crisis proved a tipping point that sparked a wave of legislation and investigation into the secretive world of prescription-drug pricing.
The pharmacists say they were forced into the painful position of deciding whether to stop stocking generic Suboxone — and in effect pushing addicts in the fragile early stages of recovery back onto the streets — or find themselves being forced out of business.
“It felt bad. It felt real bad,” Nnodum Iheme, owner of Zik’s Family Pharmacy in Dayton, said of his conclusion that he had to stop selling the medication to keep serving his many other Medicaid customers. “As a professional, you’re here to help patients get well.”
Last year’s harrowing reimbursement dip caused such an outcry that the Department of Medicaid got involved, demanding that CVS Caremark increase reimbursements.
“Basically, (CVS) talked us through how they set prices, their process and that sort of thing,” said Patrick Stephan, the Medicaid Department’s director of managed care.
“We basically sort of cut them off and said, ‘This isn’t acceptable,’ Stephan said. “The (Medicaid managed-care) plans are contractors to us. You’re a subcontractor to the plans. We contract with you to manage a line of business; not to make headaches like this. That’s unacceptable, so whatever needs to be done, this needs to be fixed.’”
According to a timeline provided by the Department of Medicaid, the reimbursement drop for generic Suboxone happened in November, department officials met with CVS officials on Dec. 18 and by January reimbursements had gone back up.
However, an official with Ohio’s largest managed-care provider, Dayton-based CareSource, gave a different version. James Gartner, the company’s vice president for pharmacy, said he was very concerned about the Suboxone reimbursement cut, so he met with CVS officials and they addressed it within 24 hours. But Gartner, who sits on a CVS advisory board, said the company “gave me no exact reasons” why the dip occurred in the first place.
Officials with another Medicaid managed-care plan, Molina Healthcare, said they were unaware of any reductions in reimbursements for generic Suboxone.
“We would reach out to our PBM if we noticed a problem with our members’ accessing the drugs they need, but we did not see that happen last fall,” said Molina spokeswoman Laura Murray.
In any case, CVS quickly restored reimbursements. But for many, that raised more questions than it answered.
Medicaid contracts with five managed-care plans. In turn, four of those hired CVS to manage pharmacy benefits. But Stephan said the plans had to appeal to the Medicaid department for help in persuading a company that is, in essence, its employee to help keep medication available to Ohio’s recovering heroin addicts.
“We did sort of turn the heat up on (the managed-care plans) significantly,” he said. “They collectively said, ‘We hear you. We’re talking to CVS Caremark. We think if you guys have a meeting directly with them it would be helpful. It would help us.’ So we did that.”
The episode pointed out another big problem with the way the state’s Medicaid system handles prescription drugs, said Ohio Sen. David Burke, R-Marysville.
A pharmacist himself, Burke chairs the Joint Medicaid Oversight Committee, which has been digging into the drug-pricing issue. He said that after CVS cut reimbursements late last year, he was losing $100 on each prescription of generic Suboxone he filled. That, he said, led to “inventory issues” at his pharmacy. Then, after CVS got its talking to, reimbursements jumped so much that he was actually making $80 on each prescription he filled.
“A $180 shift in a month, what is that tied to?” Burke asked. “How did you go from negative $100 to positive $80 after rebate? What costs are you even using? You weren’t using any. That’s the thing. You just pick another number to stop people from bitching, but you’ve done nothing to address the real issue. It’s just how much do I have to pay you to get you to shut up?”
CVS disputed Burke’s assessment.
“CVS Caremark implemented changes to the reimbursement for some medications, including for Suboxone, to pharmacies in its network last October,” Mike DeAngelis, senior director of corporate communication for CVS Health, said in an email.
“These changes, which can occur frequently based on factors such as our best understanding of the marketplace and product availability, are made as part of our responsibility as a PBM to balance the need to fairly compensate the pharmacies in our network while providing a cost-effective benefit to our clients,” DeAngelis said.
“CVS Caremark continuously monitors the marketplace, and based on that monitoring, we increased the pharmacy reimbursement rates for Suboxone the following month,” he said. “As we’ve previously stated, independent pharmacies are reimbursed at a higher rate overall than the chain pharmacies in our network, including CVS Pharmacy.”
Yet a Dispatch examination of the National Average Drug Acquisition Cost database, which shows what pharmacies across the country are receiving for each drug, showed no movement in the price for any type of Suboxone over the final three quarters of 2017. A similar look at Ohio’s Medicaid drug-utilization database, which shows how much taxpayers are being charged by the PBMs for each drug, also shows little movement in the price tag for Suboxone.
To investigate the truth of CVS’ claims for Suboxone and all of the thousands of other drugs covered by the state Medicaid program, Burke, Rep. Scott Lipps, R-Franklin, and the Medicaid department are undertaking multiple efforts to peel back the veil of secrecy regarding how CVS and other pharmacy benefit managers handle drug prices. Those who are investigating say they suspect use of that secrecy to gouge taxpayers, consumers and local pharmacies.
“You really go back to the inability for us to know how things are costing,” said Barb Sears, director of the Department of Medicaid, which is in the process of evaluating confidential pricing data from CVS and Ohio’s other Medicaid pharmacy benefit manager, OptumRx. “So the first line of defense is, ‘OK, you say this is how much I can buy it for, then show me.’”
Burke said last year’s dramatic dip in what CVS paid pharmacists is just an example of a broader pattern — one that could drive out pharmacies that are the health-care system’s most-frequent point of contact for Medicaid patients and others.
“Who the hell would go into business when you lose $100 on everything you do?” he asked. “I don’t care if you’re mowing yards or selling drugs, you’re going to stop doing that.”
Filed under: General Problems
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