>> > > Sreenivasan: IF YOU HAVE MEDICAL INSURANCE, AND IT COMES WITH A PRESCRIPTION MEDICINE STRATEGY, POSSIBILITIES ARE, IT'' S HANDLED BY SOMETHING CALLED “A “PHARMACY BENEFIT MANAGER”.” MOST INDIVIDUALS AREN'' T FAMILIAR WITH HOW THESE PHARMACEUTICAL MIDDLEMEN PLAY A HUGE ROLE IN WHAT PRESCRIPTION DRUGS YOU TAKE, AND ALSO THE PRICE YOU PAY FOR THEM. AS THE NATION FACES SOARING HEALTH AND WELLNESS TREATMENT PRICES, THE ROLE DRUG STORE BENEFIT MANAGERS PLAY IS ATTRACTING EVEN MORE ANALYSIS. NEWSHOUR WEEKEND BREAK'' S MEGAN THOMPSON RECORDS. >> > > Reporter: A FEW YEARS EARLIER, MARC FALKOWITZ OF PHILLY OFFERED TO HANDLE THE EVENTS OF HIS 91-YEAR-OLD AUNTIE. SHE HAD DEMENTIA, AND HAD MOVED INTO LONG-LASTING CARE, SO FALKOWITZ AIDS WITH POINTS LIKE SPENDING FOR HER PRESCRIPTION MEDICATIONS. >> > > AND THE EXPENSE INVOLVES ME, AS WELL AS I PAY IT OUT OF HER MONITORING ACCOUNT. >> > > Reporter: LAST YEAR, WHILE PICKING UP A PRESCRIPTION AT A MAJOR MEDICATION CHAIN, FALKOWITZ OCCURRED TO BE COMPLAINING ABOUT HIGH MEDICATION PRICES, WHEN THE PHARMACIST OFFERED HIM A POINTER.
>> > > THE PHARMACIST KIND OF CAME AROUND THE COUNTER, AND ALSO TOOK ME OFF SIDEWAYS, AS WELL AS SAYS, “” YOU MIGHT FIND IT CHEAPER ELSEWHERE.” “” “WHAT? WHAT? WHAT COULD YOU MEAN?””, YOU KNOW? >> > > Reporter: SO FALKOWITZ DID SOME RESEARCH ONLINE. HIS AUNTIE WAS TAKING EIGHT COMMON MEDICINES FOR POINTS LIKE MENTAL DETERIORATION AND HIGH BLOOD STRESS. SHE WAS PAYING CLOSE TO $103 IN INSURANCE COVERAGE CO-PAYS FOR THOSE MEDICATIONS EVERY MONTH.FALKOWITZ FOUND HE COULD OBTAIN THOSE PRECISE EXACT SAME DRUGS FOR $65, IF HE PAID OF POCKET AT AN INDEPENDENT DRUG STORE, NOT UTILIZING HIS AUNTIE ' S INSURANCE STRATEGY IN ALL. THAT ' S NEARLY 40% LESS. FALKOWITZ HANDLES A CLINICAL PRACTICE AND TAKE CARE OF INSURANCE INTENDS AT ALL TIMES. HE CLAIMS IT WAS A COMPLETE SURPRISE. > > I– I– I SIMPLY >> COULDN'' T UNDERSTAND IT. THIS IS An INTERNATIONAL CONCEPT. NEVER, NEVER DID IT DAWN ON ME, IF YOU PAY CASH MONEY, DO NOT SUBMIT TO INSURANCE COVERAGE, YOU CONSERVE CASH. I JUST, I PAY ALL THIS MONEY FOR INSURANCE. WHAT'' S IT FOR? > >> Press reporter: SO WHY WAS FALKOWITZ PAYING NEARLY $103 FOR $65 WORTH OF DRUGS? WHERE WAS THAT BONUS $38 GOING? ONE POSSIBILITY IS THAT THE CASH MOSTED LIKELY TO WHAT'' S KNOWN AS A PHARMACY ADVANTAGE SUPERVISOR, OR P.B.M. > > P.B.M.s ARE CREATED TO AID HEALTH INSURANCE PLAN AND INSURANCE FIRMS MANAGE PRESCRIPTION MEDICINES. >> > > Press Reporter: RUTGERS LEGISLATION INSTITUTION TEACHER MICHAEL SERVICE PROVIDER IS AN SPECIALIST ON THE PHARMACEUTICAL INDUSTRY.HE DISCUSSES THAT P.B.M.s Serve As MIDDLEMEN BETWEEN THE INSURANCE POLICY PREPARES, MEDICATION MAKERS AND ALSO PHARMACIES. HE STATES MANY CUSTOMERS HAVE NO CONCEPT THERE ' S A P.B.M., NOT AN INSURANCE BUSINESS, HANDLING THEIR PRESCRIPTION MEDICATION INTENDS. > > THERE ARE THREE Primary P.B.M.s THAT >> TAKE UP 85% OF THE MARKET. YOU HAVE EXPRESS MANUSCRIPTS, YOU HAVE CVS CAREMARK, AND ALSO YOU HAVE OPTUMRX. > > Reporter: THE THREE BIG P.B.M.s> BROUGHT IN EVEN MORE THAN$ 300 BILLION IN INCOME IN 2014. BUT PROVIDER CLAIMS THEY BEGAN WITH A MODERATE ROLE IN THE MARKET. > > SO, IN THE LATE ' >> 60s, EARLY ' 70s, P.B.M.s Began IN PROVIDING PLASTIC MEDICATION CARDS TO CONSUMERS SO THEY COULD MOST LIKELY TO THE DRUG STORE, THEY DIDN ' T HAVE A TRAIL OF PAPER, IT MADE IT EASIER TO GET PRESCRIPTION MEDICATIONS. VIA THE YEARS, THOUGH, THEY HAVE GOTTEN A GROWING NUMBER OF POWER. >> > > IF A PATIENT HAS INSURANCE COVERAGE, IT'' S GOING THROUGH THE P.B.M.s. >> > > Press Reporter: HOWARD JACOBSON HAS BEEN A PHARMACOLOGIST IN LONG ISLAND, NEW YORK, FOR 40 YEARS.HE SAYS THE P.B.M. DICTATES THE AMOUNT OF THE CO-PAY HE ACCUMULATES AS WELL AS JUST HOW MUCH HE'' S COMPENSATED. AS WELL AS, HE STATES A FEW YEARS EARLIER, HE BEGAN SEEING SOMETHING STRANGE ON TRANSACTIONS EVERY NOW AND ALSO THEN. IT'' S CALLED A “CLAWBACK.” > > SO, RIGHT HERE'' S ANOTHER CASE. IT'' S AN INEXPENSIVE DRUG. YOU SEE THE REAL COST OF THE MEDICINE IS ONLY $1.61. >> > > Reporter: JACOBSON REVEALED US A CURRENT PURCHASE FOR THE DIABETES MELLITUS MEDICINE METFORMIN. IT COST HIM $1.61 TO GET THE PATIENT'' S DOSE. HE STATES, IF THE PERSON PAID OUT OF POCKET, HE WOULD HAVE SOLD IT TO THEM FOR $4.00. HIS REVENUE WOULD HAVE BEEN $2.39.
BUT THE PATIENT USED AN INSURANCE PLAN, AS WELL AS THERE WAS An INTERMEDIARY: THE P.B.M. IT INFORMED JACOBSON TO FEE A $10.84 CO-PAY. IT LET HIM KEEP $1.93. AND IT TOOK $8.91 FOR ITSELF. YOU COULD HAVE SOLD IT TO THEM FOR $4; RATHER, THEY PAID A $10.84 CO-PAY. >> > > RIGHT >>. > > Press reporter: BUT UNTIL RECENTLY, JACOBSON COULDN'' T BRING THIS UP UNLESS THE CONSUMER ASKED. HE SAYS THAT'' S SINCE MOST OF HIS AGREEMENTS WITH THE P.B.M.s CONTAINED PROVISIONS THAT FORBADE HIM FROM MENTIONING THAT THEY COULD GET THEIR PRESCRIPTION CHEAPER IF THEY DIDN'' T GO WITH THEIR INSURANCE COVERAGE STRATEGY. PHARMACISTS CALL THEM “” TRICK STIPULATIONS.” >>” > > IT WAS DIFFICULT, ACTUALLY. WE'' RE TACKLING CLIENTS DAILY. WE KNOW THEM PERSONALLY. WHY SHOULD ANYONE HAVE TO PAY EVEN MORE CASH THAN IS NECESSARY? >> > > Press Reporter: JACOBSON STATES HE'' S NEVER TRULY SURE HOW MUCH MONEY HE ' LL BE REPAID BY THE P.B.M., AN QUANTITY THAT'' S BEEN PROGRESSIVELY REDUCING OVER THE YEARS.HE SAYS, SOMETIMES, HE IN FACT SHEDS MONEY ON A SALE. >> >'> I ' M ULTIMATELY GETTING PAID $9.06. CURRENTLY THIS PARTICULAR MEDICINE ACTUALLY COST ME $60 AND ALSO CHANGE. I LOST $50 ON THAT PRESCRIPTION. >> > > Reporter: JACOBSON SAYS, UNTIL NOW, HE MAKES ADEQUATE REVENUE ON OTHER TRANSACTIONS TO MAINTAIN THE DRUG STORE AFLOAT. HE FEELS HE CANISTER'' T CHALLENGE THE SYSTEM SINCE THE BIG P.B.M.s, WHICH CONTROL A MAJORITY OF THE MARKETPLACE, WILL CERTAINLY JUST TELL HIM “” TOO BAD.” >> “” > > “IF YOU WANT OUR PEOPLE IN THIS SPECIFIC NETWORK TO BE ABLE TO COME TO YOUR DRUG STORE, THESE ARE THE TERMS. TAKE '' EM OR LEAVE ' >> EM.” > > Reporter: PHARMACOLOGISTS LIKE HOWARD JACOBSON AREN'' T THE JUST ONE WHO ARE CRITICAL OF P.B.M.s.
>> > >'WE ' RE VERY MUCH ELIMINATING THE MIDDLEMEN. THE MIDDLEMEN ENDED UP BEING REALLY, REALLY RICH. RIGHT? >> > > Press reporter: IN MAY, PRESIDENT TRUMP ANNOUNCED HIS STRATEGY TO LOWER PRESCRIPTION MEDICATION COSTS. HE PLACE LOTS OF GAMERS IN THE CROSSHAIRS: MEDICINE MAKERS, WHOLESALERS, INSURER, AND P.B.M.s. AND, HE SLAMMED A METHOD CALLED “” REBATES.” >>” > > OUR PLAN WILL END THE DISHONEST DOUBLE-DEALING THAT ENABLES THE MIDDLEMAN TO POCKET REBATES AND DISCOUNTS THAT OUGHT TO BE PASSED ON TO CONSUMERS AND PATIENTS.
>> > > Reporter: SO HOW DO SO-CALLED REFUNDS WORK? ALONG WITH MANAGING BUSINESS INVOLVING CONSUMERS, PHARMACIES AND INSURANCE COVERAGE PLANS, P.B.M.s ALSO BROKER OFFERS BETWEEN DRUG MAKERS AND ALSO INSURANCE POLICIES PREPARES. FOR CIRCUMSTANCES, THEY AID DETERMINE WHICH DRUGS WILL CERTAINLY BE COVERED BY THE PLAN. THE LISTING OF COVERED DRUGS IS CALLED A “” FORMULARY.”” IN A BID TO GET A DRUG ON A PLAN'' S FORMULARY, DRUG BUSINESS IN SOME CASES PAY P.B.M.s. THESE PAYMENTS ARE KNOWN IN THE COMPANY AS “” REBATES,”” AND THEY CONTAINER TOTAL AMOUNT MILLIONS OF DOLLARS. P.B.M.s SAY THEY PASS THE MAJORITY OF THIS CASH ON TO INSURERS, WHO CLAIM THEY USE THE CASH TO LOWER CO-PAYS AND ALSO PREMIUMS FOR PEOPLE. ANOTHER PERSON CONCERN THAT WE'' VE BEEN HEARING A GREAT DEAL ABOUT, THAT THE HEAD OF STATE HAS EVEN BEEN TALKING ABOUT, IS SOMETHING CALLED REBATES.THAT APPEARS LIKE A GREAT POINT. > > SO, IT CERTAINLY >> DOES NOISE LIKE An EXCELLENT THING. REBATE IS CASH BACK, IT COULD LOWER COST FOR THE CUSTOMERS. THE TROUBLE IS THAT, IN THIS OPAQUE WORLD, IN WHICH WE HAVE NO IDEA WHAT THESE CONTRACTS SAY, REBATES ACTUALLY CAN RISE PRICE. > > Reporter: MICHAEL SERVICE PROVIDER CLAIMS DUE TO THE FACT THAT THESE SERVICE DEALS ARE TRICK, IT ' S NOT CLEAR JUST HOW MUCH OF THE PAYMENT IS BEING MADE USE OF TO DECREASE'INDIVIDUALS ' EXPENSES, AND JUST HOW MUCH IS BEING POCKETED BY THE P.B.M.s AND' INSURANCE FIRMS THEMSELVES. CARRIER ADDITIONALLY CLAIMS THIS SYSTEM COULD BE INFLATING MEDICINE COSTS, BECAUSE MEDICATION MANUFACTURERS HAVE THE MOTIVATION TO BOOST THE RATE OF THE MEDICINE IN ORDER TO AFFORD THE SETTLEMENT TO THE P.B.M. > > BY INCREASING THE COST OF THE MEDICATION, THE SUPPLIER HAS EVEN MORE LEEWAY TO GIVE A BIG REBATE TO THE P.B.M., THE P.B.M. ENJOYS, THE MEDICINE IS COVERED ON THE FORMULARY. UNFORTUNATELY FOR EVERYBODY, MEDICATION RATES GO UP. > > IT ' S, IT ' S, IT ' S RATHER A SURPRISING AND ALSO >> PERVERSE SYSTEM THAT HAS,'THAT HAS ACTUALLY PROGRESSED OVER TIME. > > Reporter: SECRETARY OF WELLNESS AND HUMAN BEING SERVICES ALEX AZAR AFFIRMED IN JUNE BEFORE THE SENATE HEALTH BOARD ABOUT THE PRESIDENT ' S MEDICINE PRICES PLAN. AZAR SAID THE ADMINISTRATION IS THINKING ABOUT REGULATIVE CHANGES THAT WOULD ALLOW REBATES TO BE SCRUTINIZED UNDER FEDERAL ANTI- KICKBACK LAWS. > > WE MAY DEMAND TO RELOCATE TOWARD A SYSTEM WITHOUT REBATES, WHERE P.B.M.s RECEIVE NO PAYMENT FROM THE REALLY >> PHARMA BUSINESS THAT THEY ARE DESIGNED TO BE NEGOTIATING AGAINST. > > Press reporter: AZAR, A FORMER PHARMACEUTICAL EXECUTIVE, ALSO STATED HE ' S HEARD RECORDS OF P.B.M.s THREATENING DRUGMAKERS. > > WE ' VE HAD SEVERAL MEDICATION COMPANIES CAN BE FOUND IN THAT ARE– WANT TO CARRY OUT CONSIDERABLE MATERIAL DECREASES IN THEIR MEDICINE COSTS. THEY ARE LOCATING OBSTACLES FROM PHARMACY BENEFIT MANAGERS AS WELL AS DISTRIBUTORS, IN WHICH THEY MAY SAY, “WELL, IF YOU DECREASED YOUR STICKER PRICE, I WILL CERTAINLY TAKE YOU OFF FORMULARY, COMPARED TO YOUR COMPETITOR WHO WILL CERTAINLY HAVE A HIGHER STICKER PRICE WHERE I WILL CERTAINLY MAKE “EVEN MORE CASH.” I FIND THAT UNCONSCIONABLE. > > Press reporter: SO, WHAT DO THE DRUG STORE ADVANTAGE SUPERVISORS HAVE TO SAY ABOUT ALL OF THIS? > > WELL, IF WE DIDN ' T CONSERVE CASH,” NO ONE WOULD WORK WITH United States. >> > > Press Reporter: MARK MERRITT IS THE PRESIDENT OF THE PHARMACEUTICAL TREATMENT MONITORING ORGANIZATION, AN INDUSTRY TRADE TEAM THAT REPRESENTS THE NATION ' >> S LARGEST P.B.M.s. HE SAYS, BASE ON THEIR STUDY, P.B.M.s Canister DECLINE MEDICINE BENEFIT COSTS FOR INDIVIDUALS BY 30%. > > OUR CLIENTS BRING P.B.M.s IN'BECAUSE THEY INTEND TO ENSURE THAT BENEFITS ARE GOOD AS WELL AS THAT INDIVIDUALS HAVE ACCESS TO THE MEDICATIONS THAT THEY REQUIREMENT. > > Reporter: HE CHALLENGES THE ALLEGATIONS> BY ASSISTANT AZAR THAT P.B.M.s HAVE ANYTHING TO ACCOMPLISH WITH MAINTAINING MEDICATION PRICES HIGH. > > YEAH, THAT ' S INACCURATE, AS WELL AS PLUS, TO THE SECRETARY> ' S CREDIT SCORE, HE SLAMMED EVERYONE IN HEALTH AND WELLNESS CARE, MOST IMPORTANTLY THE MEDICATION FIRMS FOR THEIR HIGH PRICES. >> AS WELL AS YOU HAVE'TO BEGIN WITH THAT. DRUG BUSINESS SET THE COSTS. NOBODY ELSE HAS ANYTHING TO PERFORM WITH IT. > > Press Reporter: MERRITT ALSO SAFEGUARDS THE SYSTEM OF DISCOUNTS. SO THE DISCOUNTS GO TO THE P.B.M., BUT HOW DO WE KNOW THAT THOSE DISCOUNTS ARE AFTER THAT PASSED ON TO THE CUSTOMER? > > WHAT WE DO IS, WE SEND >> THE DISCOUNT DOLLARS APPROXIMATELY THE INSURANCE PROVIDER, AND THEY DETERMINE WHAT THEY MAKE WITH THEM.BUT THAT IS REALLY APPROXIMATELY THE WELLNESS INSURANCE STRATEGY, IT ' S NOT THE P.B.M. WE HAVE STATED REPETITIVELY AS >> AN SECTOR, WE ' D MORE THAN HAPPY TO LOOK AT OTHER MODELS BESIDES REFUNDS. ALL WE INTEND TO DO IS GET TO
THE MOST AFFORDABLE NET EXPENSE FOR OUR CUSTOMERS. IF THERE ' S A BETTER MEANS TO PERFORM IT, A BETTER WAY TO GET COST SAVINGS, WE'' D BE OPEN TO IT. > > Reporter: AS FOR THE ISSUES FROM PHARMACOLOGISTS, MERRITT SAYS HE ASSUMES P.B.M. REIMBURSEMENTS ARE FAIR. AS WELL AS WHEN'IT PERTAINS TO CLAWBACKS, LAWSUITS HAVE BEEN FILED VERSUS OPTUMRX AS WELL AS THE INSURANCE FIRMS IT FUNCTIONS WITH, IMPLICATING THEM OF PROFITING FROM EXCESSIVE CARBON MONOXIDE- PAYS. MERRITT CLAIMS THE PRACTICE IS NOT SOMETHING HIS P.B.M.TRADE ORGANIZATION EXCUSES. > > IF IT IS HAPPENING, IT NEEDS TO STOP. AND THAT ' S OUR PLACEMENT AS AN INDUSTRY. WE DON ' T ASSISTANCE IT, AT ALL. > > Reporter: IN A STATEMENT TO NEWSHOUR WEEKEND BREAK, OPTUMRX CLAIMED, “OUR COMPANY BELIEVE THESE LAWSUITS ARE WITHOUT MERIT,” AND REJECTED UTILIZING CLAWBACKS AT ALL. >> BOTH OTHER BIG P.B.M.s, CVS CAREMARK AS WELL AS EXPRESS SCRIPTS, ALSO STATED THEY DO NOT TAKE PART IN CLAWBACKS >>. LAWMAKERS IN 28 STATES HAVE OUTLAWED CLAWBACKS OR GAG CLAUSES. MEMBERS OF CONGRESS ARE SEEKING TO DO THE SAME. A BILL IS CURRENTLY PENDING IN PENNSYLVANIA, IN WHICH MARC FALKOWITZ LIVES. HE HASN ' T USED HIS AUNT ' S WELLNESS INSURANCE POLICY TO BUY HER MEDICINE IN A YEAR, AND ALSO STATES HE CURRENTLY LOOKS AROUND FOR HIS WHOLE FAMILY MEMBERS ' S PRESCRIPTIONS– ALTHOUGH HE DISCOVERS IT LUDICROUS THAT HE ALSO NEEDS TO TO BEGIN WITH. > > I JUST ASSUMES THERE ' S SOMETHING SO TERRIBLY INCORRECT WITH THE SYSTEM.IT SIMPLY RESISTS LOGICAL FEELING.
