Guest column Elaine Ulman: Local prescription drug wars

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Americans pay the highest prescription drug prices in the world. Yet independent pharmacies in small towns and rural communities like western Massachusetts struggle to survive. You may not see the pharmacist tied up and gagged beside an empty cash register, but independent pharmacies have been systematically robbed for years. Medicare Part D and Medicaid, insurance programs created to help people pay for prescription drugs, have also been cheated, along with state and local governments.

I stumbled upon this problem when the price of my daily thyroid pill, covered by Medicare Part D, suddenly tripled. Instead of 90 pills for $36, I received 30 pills for the same price. My local independent pharmacist told me he could no longer sell more than one month’s supply, though I could still get 90 pills for $36 from a chain drugstore in town or by mail order.

That seemed unfair. Why was this rural pharmacy unable to sell what CVS, Walgreens and mail-order pharmacies could provide? And why should a national health care program penalize people for shopping at nearby locally-owned businesses? My pill bottle was empty and I didn’t want to waste a gallon of gas driving into town, so I paid the $36 and went home determined to find answers.

The website, PBMwatch.com, tracks state and federal actions on prescription drug pricing. PBM stands for pharmacy benefits managers. They are “third-party administrators contracted by insurance companies, employers, unions, and government entities to handle the prescription drug benefit component of health care plans.” PBM’s are often referred to as “middlemen,” but don’t be fooled. The four largest — CVS Caremark, OptumRX, Walgreen/Boots Alliance and Express Scripts — are owned by or affiliated with large insurance companies or national drugstore chains. This creates a conflict of interest between increasing corporate profits and reducing costs for consumers. Independent pharmacies are caught in the middle.

PBM’s have tremendous power. They choose drugs for formularies, negotiate prices and discounts with pharmaceutical companies and drug wholesalers, process insurance claims from hospitals, nursing homes and other health care providers, and reimburse pharmacies for retail prescription sales. Operating without government regulation has allowed PBM’s and their corporate affiliates to profit from every transaction using unfair business practices, according to the National Community Pharmacist Association.

Four independent pharmacists I talked with in western Massachusetts confirmed that the PBM contracts they had to sign included a gag clause forbidding the pharmacist to tell customers about cheaper generic drugs or alert them when an insurance copay costs more than paying in cash. Violating the gag clause could lead to fines or cancellation of contracts.

PBMs routinely reimbursed the pharmacists for less than the wholesale cost of a drug, meaning pharmacists actually lost money on retail prescription sales. The discounts and rebates PBM’s squeezed from manufacturers and wholesalers were not passed on to customers. Instead they disappeared, buried in corporate profits.

Congress has outlawed PBM gag clauses and held hearings to “open the black box” and shine a light on high prescription drug costs. Meanwhile, 41 states, including Massachusetts, are considering PBM reform bills.

In 2018, Massachusetts Attorney General Maura Healey sued Walgreen/Boots for routinely overcharging on prescription drug claims submitted by the state’s workers’ compensation plan. Walgreens settled for $5.5 million. This year, Healey filed another suit against Walgreens for fraudulent overcharges on prescription sales to MassHealth and falsifying claims for reimbursement for insulin from 2006-2018. The company paid $2.2 million without acknowledging wrongdoing. The Massachusetts penalties were a slap on the wrist for a drugstore/PBM with $131.5 billion in revenue for fiscal 2018.

An Iowa pharmacist/whistleblower who serviced his county jail triggered a lawsuit when CVS Caremark reimbursed him less than $6 for a bottle of generic antipsychotic pills, then billed the county $198 for the prescription. “Middlemen have to make some money,” the flabbergasted pharmacist told Bloomberg reporters, “but we… figured everyone was playing fair.”

Independent community pharmacists do more than play fair. They reach out to help customers in ways chain stores cannot. They told me about driving through snowstorms after hours to deliver medications for elders or mothers with seriously ill children. They agonized about whether to send away loyal customers with expensive prescriptions or keep the customer while losing money on every sale. They chaffed as big drugstore chains undermined them by cutting reimbursements and then offered to help their struggling business by buying out the store.

Fortunately, independent community pharmacists are a hardy breed. We need their expertise and integrity. Here are ways to support them:

■Buy local! Neighborhood pharmacists give honest advice on drug choices and savings. Their prices for generic non-prescription drugs, readers, sunglasses, and other health aids are often less than those in chain stores.

■ Call state Sen. Cindy Friedman, a health finance expert on the Senate Ways & Means Committee, at 617-722-1432, and your individual state senators. Ask them to support H1133/S.706, an act to ensure prescription drug cost transparency and affordability, as written before recent amendments were added.

■Congressman Richard Neal pushed a weak transparency bill through the House Ways & Means Committee. Demand that he fight for stronger, enforceable drug pricing and PBM regulations.

Elaine Ulman lives in Goshen.

 

Filed under: General Problems