Friday, 07 October 2011 16:14

Bad Prescription: Drug Industry Merger Could Put Louisiana Pharmacies, Consumers At Risk?

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Bad Medicine

One of the strange side effects of health care reform is the race by pharmaceutical companies to merge services—a race that could deny the average patient the ability to pick up his or her prescriptions at the corner pharmacy.  

          As Linda Perkins of the Louisiana Lupis Foundation put it, “All of us know how expensive the health care system has become and we appreciate efforts by all involved to try to make it more accessible and more affordable.  However, it is important that we maintain quality of care in the process.  Especially for folks with chronic diseases such as lupus or diabetes and other health challenges that need daily attention.”

        “That daily attention usually involves medications and interaction with the local pharmacist.  Unfortunately there is a move afoot to greatly interrupt that important relationship that impacts daily care.”

  “The pharmacy benefit managers (PBM) whose job is to help companies manage the prescription drug benefits in their health plans are starting to really squeeze pharmacists.  And we don’t get the benefit of the savings.  The profits for the PBM rose almost 20% last year while the pharmacist got less for filling the prescription. “

      “Now, two of the largest PBMs in America, Express Scripts and Medco, are planning to merge to create a super middleman, take over half the market and have more power to say where and how consumers get their medications.  To make matters worse, Express Scripts is going after the largest pharmacy chain in America, Walgreens.  If they fail to reach an agreement with Walgreens, access and choice on prescriptions and medications for chronic disease patients will be greatly jeopardized.”

        Like HMO plans directing where a patient can get medical treatment, the right to go to the drugstore--any one a consumer wants--to fill his or her prescriptions, may be in danger.  Behind the scenes, a middleman system called “pharmacy benefit managers” or PBMs are on the verge of transforming the pharmacy business.  Ostensibly, their job is to help companies manage the prescription drug benefits in their health plans and lower costs that companies pay for health care.

          However, pharmacists worry that PBMs will actually lower costs by squeezing pharmacists.  Currently, while prescription reimbursements have fallen consistently over the past three years, PBM profits rose almost 20%---at the same time corporate profits were stagnant.

         Some medical professionals have complained that PBMs make even more money is by getting “rebates” from drug makers for buying more expensive versions of the same drug.  They decide whether to include or exclude those drugs based on whether they get a rebate, not based on Doctor recommendations.  The charge is, in other words, they pick the medicine you can take based on what they can make.

         What has kept PBMs in check, to some extent, are licensed pharmacists interacting with patients, and possessed of the ability to facilitate doctors’ prescriptions over many corporate guidelines.    Reportedly, the PBM industry is attempting to change that, by moving to require prescriptions only be filled by mail order.    Questions would be answered by dialing a PBM call center and talking to a faceless voice thousands of miles away.

           A direct mail system would increase PBM profits initially, but it would also secure greater control of the nature of prescription fulfillment.   And, this is a bit too impersonal for good heath standards, said James W. Quillin, PhD. MD of the Louisiana Academy of Medical Psychologists.   “[T]hat personal relationship that exists between a pharmacist and the patient is an important part of the collaboration of care that helps ensure effective, cost efficient treatment.  Access drug stores such as Walgreens, in cities both large and small, should not be removed from the equation.”

        It could even mean a diminishment in market competition, in Quillin’s view, the original purpose of the PBMs.  He noted that the great danger comes from the fact that “two of the largest PBMs in America, Express Scripts and Medco, are planning to merge to create a super middleman, take over half the market and have more power to say where and how consumers get their medications.”

        “If negotiations between PBMs and large retail pharmacies fail, access and choice on where and by whom prescriptions are filled will be substantially altered, and both chain drugstores and smaller independent pharmacies alike are apt to suffer.  Lack of competition and restriction of consumer choice almost never makes good economic sense to any of us in the long run.”

      The reference to Walgreens comes from the fact that Express Scripts is on the precipice of making it all but impossible for large numbers of its patient members to continue going to the largest pharmacy chain in America, Walgreens.   In many parts of urban New Orleans, Walgreens is the only pharmacy available

        Washington has begun to pay attention.  As the Center for American Progress Action Fund testified before Congress last December, “[b]etween 2004 and 2008, the three major PBMs have been the subject of six major [F]ederal or multidistrict cases over allegations of fraud, misrepresentation to plan sponsors, patients and providers; unjust enrichment through secret kickback schemes; and failure to meet ethical and safety standards.”

        A number of state and Federal lawmakers recently have proposed measures to prevent such abuses.  Currently legislation is being proposed in several states, including Louisiana, to protect the consumer’s right to visit any drugstore they like.

      “We all need to make sure the PBMs used by governmental agencies and employers manage prescription benefits for citizens are acting in good faith and most importantly  protect the consumer’s right to visit any drugstore they like,” Linda Perkins concluded.     


By Christopher Tidmore, [email protected]


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