Bribery in Healthcare

May 12, 2023

Happy Friday Healthcare Advocates

 Please enter requests for research using the comment button at the bottom.  Remember our advocacy educates our representatives and lets them know what we want them to do for us.  

This will be especially important after May 16th when Universal Healthcare will be reintroduced into both houses of Congress by Rep. Jayapal (WA) and Sen. Sanders (Vt.)

Bribery in Healthcare

A few days ago I was wandering through the congressional website to see what pieces of healthcare legislation were bubbling up.  As I recall there were over 300 separate pieces.  Today I will discuss a few of them related to pharmacy benefit managers.

Let’s recall what a pharmacy benefit manager does.  They are hired by the health insurance company to manage the prescription benefit of the health insurance plan.  I found a nice writeup describing their work at the Commonwealth Fund site.  Here it is  and below is a flowchart of their activities from that article

PBMs: 

Develop and maintain formularies, of covered medications on behalf of health insurers, which influence which drugs individuals use and determine out-of-pocket costs for consumers - copays.  They wield their  purchasing power to negotiate rebates and discounts from drug manufacturers which they often keep and contract directly with individual pharmacies to reimburse them for drugs dispensed to policyholders. They are the middleman who make money in all directions

If the system worked well then the PBM should be able to negotiate lower prices and we the consumer would benefit.  Sadly, that’s not often the way.

1. The rebate business is a bribe to put the drug on the formulary to make sure that people buy it.  It is not necessarily the best drug for you and your copay is a way to squeeze extra profit from the consumer.

2. The PBMs often keep the rebate.  Of course, they have goosed the system to drive up prices with the rebate and they want to keep it.  Insurance companies want laws enacted that let them keep it.  How about drop the rebate entirely.

3. Spread pricing is a scheme where PBMs are reimbursed by health plans and employers at a higher price for generic drugs than what the PBMs actually pay pharmacies for these drugs. The PBMs then keep the difference. 

4. The PBM negotiates the whole formulary with a pharmacy and sometimes reimbursement for some of the drugs is less than what the pharmacist pays.

There are 66 PBMs in the US but three control over 80% of the market.  They are Express Scripts, Caremark, and Optum RX.  Cigna owns Express Scripts; CVS, which merged with insurer Aetna in 2018, owns Caremark; and UnitedHealth Group owns Optum Rx.  

Caremark is the biggest money making operation in the vertically integrated CVS conglomerate.  It makes more money than all 10,000 CVS stores.  This is big business.

There are 5 pieces of legislation in Congress related to this.  Some proposed by Democrats, some by Republicans, some by both.  They demand more transparency and insight into the operation of  PBMs.  They are;

1. S.127 The Pharmacy Benefit Manager Transparency Act of 2023 (Sen. Cantwell) 

2. H.R. 2880 Protecting Patients Against PBM Abuses Act (Rep. Carter)

3. H.R .2816 Pharmacy Benefit Manager Sunshine and Accountability Act (Rep Harshbarger) 

4. S. 1038 Drug Price Transparency in Medicaid Act of 2023 (Sen. Welch)

5. H.R. 1613 Drug Price Transparency in Medicaid Act of 2023 (Rep. Carter)

H.R. 1613 and S. 1038 are companion bills (same) and address prescriptions paid for by Medicaid only.  They seek data on rebates to be reported to the government but do not eliminate them.

H.R. 2880 seeks to eliminate rebates in Medicare prescriptions by forcing PBMs to turn the rebates over to the government.

H.R. 2816 only affects Medicare and uses a technique of including incomplete markup language to make it difficult to determine the real meaning of the legislation.  Far from transparent,

S.127 tries to make the behavior of PBMs transparent for everyone whose insurance uses a PBM.  It requires fair payments to pharmacies  but also requires that rebates be paid to either the health insurance company or the consumer.

Think about it - CVS Caremark will give the rebate money to the insurance company - like Aetna with whom it is vertically integrated.  They keep the money and consumers lose out again.

The only solution is to make the entire rebate/discount process for selling drugs illegal.    

This is not capitalism, it is a complex web of corporate negotiations designed to screw the consumer and squeeze as much as possible out of us.  Capitalism encourages competition so we can choose the best product and reward that provider.  This system of so many standing between us and our providers determining how we are cared for is a cruel, greedy scheme masquerading as capitalism.

Recently it was made illegal to have non disclosure agreements between PBMs and pharmacies.  These kept the pharmacist from telling you there was a cheaper way to get the medicine you need than from your insurance company.  It could be the cash price or it could be by using a discount system like GoodRX or SingleCare.  Pharmacists don’t often do this so here is my recommendation. 

ASK THE PHARMACIST - What is the cheapest way to get this prescription?  They will check which programs they have and let you know.  I do this and save a bundle.   Here is a link to a search for pharmacy discount cards.

ACTION

Call or email your Congressperson and Senators about this.  There is a sample text below or

use RESISTBOT on your phone by texting SIGN  PGQFPW to 50409 to tell your Congressperson and Senators:

“ I am your constituent and I am fed up with Pharmacy Benefit Managers and their shady operations. They take rebates/bribes from drug makers to put drugs on formularies and this increases prices for all of us and does not necessarily make the best drugs available to any of us.

I want you to create/support legislation that makes PBMs shady operations transparent like in S. 127  “The Pharmacy Benefit Manager Transparency Act of 2023”  but we also need the entire rebate/bribery scheme of PBMs and drug companies to be made illegal.  I know this is complex but you can do it.

References

Find My Elected Officials

Contact the White House  https://www.whitehouse.gov/contact/

Contact State and Federal Representatives

https://www.commoncause.org/find-your-representative/addr/

Important Healthcare Resources

League of Women Voters Healthcare Reform Toolkit

Our Newsletter resources including reproductive healthcare

Healthcare Advocacy Reading List

Organizations to Contact

NARAL - Pro Choice America

Planned Parenthood

Physicians for a National Health Plan

Claims Denials and Appeals & What to Do

Appeal a Healthcare Decision

Appeal/Negotiate a Hospital Bill

Save Democracy

Chop Wood, Carry Water by Jessica Cravens

RESISTBOT

Link to the RESISTBOT site to learn more

Link to Chop Wood, Carry Water Resistbot write up