>> > > Sreenivasan: IF YOU HAVE HEALTH INSURANCE, AND ALSO IT COMES WITH A PRESCRIPTION DRUG STRATEGY, POSSIBILITIES ARE, IT'' S HANDLED BY SOMETHING CALLED “A “DRUG STORE BENEFIT MANAGER”.” LOTS OF PEOPLE AREN'' T AWARE OF HOW THESE PHARMACEUTICAL MIDDLEMEN PLAY A SUBSTANTIAL DUTY IN WHAT PRESCRIPTION DRUGS YOU TAKE, AND ALSO THE COST YOU PAY FOR THEM. AS THE NATION FACES SKYROCKETING HEALTH AND WELLNESS CARE COSTS, THE DUTY DRUG STORE ADVANTAGE MANAGERS PLAY IS ATTRACTING EVEN MORE SCRUTINY. NEWSHOUR WEEKEND'' S MEGAN THOMPSON REPORTS. >> > > Reporter: A FEW YEARS AGO, MARC FALKOWITZ OF PHILADELPHIA OFFERED TO HANDLE THE EVENTS OF HIS 91-YEAR-OLD AUNTIE. SHE HAD DEMENTIA, AND HAD MOVED INTO LASTING TREATMENT, SO FALKOWITZ ASSISTS WITH POINTS LIKE SPENDING FOR HER PRESCRIPTION MEDICATIONS. >> > > AND THE BILL INVOLVES ME, AND ALSO I PAY IT OUT OF HER CHECKING ACCOUNT.
>> > > Reporter: LAST YEAR, WHILE GETTING A PRESCRIPTION AT A MAJOR MEDICINE CHAIN, FALKOWITZ OCCURRED TO BE COMPLAINING ABOUT HIGH DRUG RATES, WHEN THE PHARMACOLOGIST GAVE HIM A SUGGESTION. >> > > THE PHARMACOLOGIST TYPE OF CAME AROUND THE COUNTER, AS WELL AS TOOK ME OFF TO THE SIDE, AND SAYS, “” YOU MIGHT LOCATE IT LESS COSTLY SOMEWHERE ELSE.” “” “WHAT? WHAT? WHAT COULD YOU MEAN?””, YOU KNOW? >> > > Press reporter: SO FALKOWITZ DID SOME RESEARCH ONLINE. HIS AUNTIE WAS TAKING EIGHT GENERIC DRUGS FOR POINTS LIKE DEMENTIA AND HIGH BLOOD PRESSURE. SHE WAS PAYING NEAR TO $103 IN INSURANCE CO-PAYS FOR THOSE MEDICATIONS EVERY MONTH. FALKOWITZ FOUND HE COULD OBTAIN THOSE EXACT VERY SAME MEDICATIONS FOR $65, IF HE PAID OUT OF POCKET AT AN INDEPENDENT DRUG STORE, NOT UTILIZING HIS AUNTIE'' S INSURANCE POLICY STRATEGY AT'ALL.THAT ' S NEARLY 40%LESS. FALKOWITZ HANDLES A MEDICAL TECHNIQUE AND TAKE CARE OF INSURANCE POLICY PREPARES REGULARLY. HE SAYS IT WAS A TOTAL SHOCK. >> > > I– I– I JUST COULDN ' T UNDERSTAND IT. THIS IS A FOREIGN IDEA. NEVER, NEVER DID IT OCCUR TO ME, IF YOU PAY CASH, DO NOT SUBMIT TO INSURANCE COVERAGE, YOU SAVE MONEY. I SIMPLY, I PAY ALL THIS MONEY FOR INSURANCE COVERAGE. WHAT'' S IT FOR? > >> Press reporter: SO WHY WAS FALKOWITZ PAYING VIRTUALLY $103 FOR $65 WORTH OF DRUGS? WHERE WAS THAT ADDITIONAL $38 GOING? ONE POSSIBILITY IS THAT THE MONEY WENT TO WHAT'' S KNOWN AS A DRUG STORE BENEFIT MANAGER, OR P.B.M. > > P.B.M.s ARE DESIGNED TO HELP HEALTH PLANS AND INSURANCE FIRMS MANAGE PRESCRIPTION MEDICATIONS. >> > > Reporter: RUTGERS LEGISLATION COLLEGE TEACHER MICHAEL CARRIER IS AN SPECIALIST ON THE PHARMACEUTICAL SECTOR. HE CLARIFIES THAT P.B.M.s Serve As MIDDLEMEN BETWEEN THE INSURANCE COVERAGE INTENDS, MEDICATION MAKERS AS WELL AS DRUG STORES. HE SAYS A LOT OF CONSUMERS HAVE NO CONCEPT THERE'' S A P.B.M., NOT AN INSURANCE POLICY BUSINESS, MANAGING THEIR PRESCRIPTION MEDICINE PREPARES. > > THERE ARE 3 MAIN P.B.M.s THAT USE UP 85% OF THE MARKET.YOU HAVE EXPRESS
SCRIPTS, YOU HAVE CVS CAREMARK, AND YOU HAVE OPTUMRX. > > Reporter: THE THREE BIG >> P.B.M.s BROUGHT IN MORE THAN $300 BILLION IN REVENUE LAST YEAR. BUT SERVICE PROVIDER SAYS THEY STARTED WITH A SMALL ROLE IN THE INDUSTRY. > > SO, IN THE LATE ' >> 60s, EARLY ' 70s, P.B.M.s STARTED IN GIVING PLASTIC DRUG CARDS TO CONSUMERS SO THEY COULD MOST LIKELY TO THE PHARMACY, THEY DIDN ' T HAVE A ROUTE OF PAPER, IT MADE IT EASIER TO OBTAIN PRESCRIPTION MEDICINES. WITH THE YEARS, THOUGH, THEY HAVE OBTAINED MORE AND ALSO EVEN MORE POWER. >> > > IF A PATIENT HAS INSURANCE, IT'' S GOING VIA THE P.B.M.s.
>> > > Press Reporter: HOWARD JACOBSON HAS BEEN A PHARMACIST IN LONG ISLAND, NEW YORK, FOR 40 YEARS. HE CLAIMS THE P.B.M. DICTATES THE AMOUNT OF THE CO-PAY HE GATHERS AS WELL AS HOW MUCH HE'' S REIMBURSED. AND, HE CLAIMS A FEW YEARS AGO, HE BEGAN NOTICING SOMETHING STRANGE ON TRANSACTIONS EVERY ONCE IN A WHILE. IT'' S CALLED A “CLAWBACK.” > > SO, RIGHT HERE'' S ANOTHER PERSON CASE. IT'' S AN INEXPENSIVE DRUG. YOU SEE THE REAL COST OF THE MEDICATION IS ONLY $1.61. >> > > Reporter: JACOBSON REVEALED United States A RECENT PURCHASE FOR THE DIABETES MELLITUS DRUG METFORMIN. IT COST HIM $1.61 TO ACQUIRE THE INDIVIDUAL'' S DOSAGE. HE SAYS, IF THE CLIENT PAID OF POCKET, HE WOULD HAVE SOLD IT TO THEM FOR $4.00.
HIS PROFIT WOULD HAVE BEEN $2.39. BUT THE CLIENT USED AN INSURANCE STRATEGY, AND ALSO THERE WAS An INTERMEDIARY: THE P.B.M. IT INFORMED JACOBSON TO CHARGE A $10.84 CO-PAY. IT ALLOW HIM MAINTAIN $1.93. AND ALSO IT TOOK $8.91 FOR ITSELF. YOU COULD HAVE SOLD IT TO THEM FOR $4; INSTEAD, THEY PAID A $10.84 CO-PAY. >> > > RIGHT >>. > > Press reporter: BUT UNTIL LATELY, JACOBSON COULDN'' T BRING THIS UP UNLESS THE CLIENT ASKED. HE CLAIMS THAT'' S DUE TO THE FACT THAT MUCH OF HIS CONTRACTS WITH THE P.B.M.s Had ARRANGEMENTS THAT FORBADE HIM FROM MENTIONING THAT THEY COULD OBTAIN THEIR PRESCRIPTION CHEAPER IF THEY DIDN'' T GO WITH THEIR INSURANCE POLICY STRATEGY. PHARMACISTS CALL THEM “” GAG CLAUSES.” >>” > > IT WAS DIFFICULT, ACTUALLY. WE'' RE FACING CLIENTS EVERY DAY. WE UNDERSTAND THEM DIRECTLY. WHY SHOULD ANYONE NEED TO PAY EVEN MORE MONEY THAN IS NECESSARY? >> > > Reporter: JACOBSON STATES HE'' S NEVER REALLY SURE HOW MUCH MONEY HE ' LL BE REPAID BY THE P.B.M., AN AMOUNT THAT'' S BEEN PROGRESSIVELY DECREASING OVER THE YEARS.HE SAYS, SOMETIMES, HE REALLY SHEDS MONEY ON A SALE. >> >'> I ' M EVENTUALLY MAKING MONEY $9.06. NOW THIS SPECIFIC MEDICINE IN FACT SET YOU BACK ME $60 AND ALSO CHANGE. I LOST $50 ON THAT PARTICULAR PRESCRIPTION. >> > > Press Reporter: JACOBSON SAYS, UP UNTIL NOW, HE MAKES ENOUGH REVENUE ON OTHER TRANSACTIONS TO KEEP THE PHARMACY AFLOAT. HE FEELS HE CANISTER'' T ITEM TO THE SYSTEM DUE TO THE FACT THAT THE BIG P.B.M.s, WHICH CONTROL A MAJORITY OF THE MARKET, WILL CERTAINLY JUST TELL HIM “” REGRETTABLE.” >> “” > > “IF YOU WANT OUR PEOPLE IN THIS SPECIFIC NETWORK TO BE ABLE TO FIND 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 INTERMEDIARIES. THE MIDDLEMEN ENDED UP BEING VERY, EXTREMELY ABUNDANT. RIGHT? >> > > Reporter: IN MAY, HEAD OF STATE TRUMP INTRODUCED HIS PLAN TO LOWER PRESCRIPTION MEDICATION PRICES.HE PUT LOTS OF
PLAYERS IN THE CROSSHAIRS: MEDICINE MANUFACTURERS, DEALERS, INSURANCE COVERAGE COMPANIES, AND P.B.M.s. AND, HE CRITICIZED A METHOD CALLED “” REFUNDS.” >>” > > OUR STRATEGY WILL FINISH THE DECEITFUL DOUBLE-DEALING THAT ALLOWS THE MIDDLEMAN TO POCKET REBATES AS WELL AS DISCOUNTS THAT OUGHT TO BE HANDED DOWN TO CONSUMERS AND PATIENTS. >> > > Reporter: SO HOW DO SO-CALLED REBATES WORK? ALONG WITH HANDLING ORGANIZATION INVOLVING CONSUMERS, PHARMACIES AND ALSO INSURANCE COVERAGE PLANS, P.B.M.s ALSO BROKER BARGAINS BETWEEN MEDICINE MAKERS AND ALSO INSURANCE PLANS.FOR INSTANCE, THEY AID DECIDE WHICH MEDICINES WILL CERTAINLY BE COVERED BY THE PLAN. THE LIST OF COVERED DRUGS IS CALLED A “FORMULARY.” IN A BID TO OBTAIN A MEDICATION ON A PLAN ' S FORMULARY, MEDICINE'COMPANIES SOMETIMES PAY P.B.M.s. THESE REPAYMENTS ARE KNOWN IN THE BUSINESS AS “” DISCOUNTS,”” AS WELL AS THEY CONTAINER OVERALL MANY MILLIONS OF DOLLARS. P.B.M.s SAY THEY PASS THE MAJORITY OF THIS MONEY ON TO INSURERS, THAT STATE THEY USAGE THE CASH TO LOWER CO-PAYS AND PREMIUMS FOR PATIENTS. ANOTHER ISSUE THAT WE'' VE BEEN HEARING A LOT ABOUT, THAT THE PRESIDENT HAS EVEN BEEN TALKING ABOUT, IS SOMETHING CALLED REBATES.THAT SEEMS LIKE A GOOD IDEA. > > SO, IT CERTAINLY >> DOES SOUND LIKE A GOOD IDEA. REBATE IS CASH BACK, IT COULD LOWER RATE FOR THE CUSTOMERS. THE ISSUE IS THAT, IN THIS OPAQUE WORLD, IN WHICH WE HAVE NO SUGGESTION WHAT THESE DEALINGS SAY, REBATES ACTUALLY CAN BOOST COST. > > Reporter: MICHAEL SERVICE PROVIDER CLAIMS BECAUSE THESE COMPANY DEALS ARE TRICK, IT ' S NOT CLEAR JUST HOW MUCH OF THE SETTLEMENT IS BEING MADE USE OF TO LOWER'PATIENTS ' PRICES, AND HOW MUCH IS BEING POCKETED BY THE P.B.M.s AND' INSURERS THEMSELVES.CARRIER ALSO STATES THIS SYSTEM COULD BE INFLATING DRUG RATES, BECAUSE DRUG MAKERS HAVE THE REWARD TO BOOST THE RATE OF THE DRUG IN ORDER TO AFFORD THE PAYMENT TO THE P.B.M. > > BY INCREASING THE COST OF THE MEDICINE, THE PRODUCER HAS EVEN MORE LEEWAY TO PROVIDE A BIG REBATE TO THE P.B.M., THE P.B.M. MORES THAN HAPPY, THE MEDICATION IS COVERED ON THE FORMULARY. UNFORTUNATELY FOR EVERYBODY, MEDICINE RATES INCREASE. > > IT ' S, IT ' S, IT ' S RATHER A STARTLING AND ALSO WICKED SYSTEM THAT HAS, THAT HAS ACTUALLY> PROGRESSED GRADUALLY. > > Reporter: ASSISTANT OF HEALTH AND WELLNESS AND ALSO HUMAN SERVICES ALEX AZAR TESTIFIED IN JUNE BEFORE THE SENATE WELLNESS> BOARD ABOUT THE PRESIDENT ' S MEDICATION PRICES STRATEGY. AZAR SAID THE MANAGEMENT IS THINKING ABOUT REGULATIVE CHANGES THAT WOULD ALLOW REBATES TO BE SCRUTINIZED UNDER FEDERAL ANTI- KICKBACK REGULATIONS. > > WE MAY DEMAND TO APPROACH A SYSTEM WITHOUT REFUNDS, WHERE P.B.M.s get NO COMPENSATION FROM THE EXTREMELY PHARMA COMPANIES THAT THEY ARE SUPPOSED TO BE BARGAINING AGAINST. > > Reporter: AZAR, A FORMER DRUG EXEC, ALSO CLAIMED HE ' S LISTENED TO RECORDS OF P.B.M.s THREATENING DRUGMAKERS. >> > > WE ' VE HAD SEVERAL DRUG COMPANIES CAN BE FOUND IN THAT ARE– WISH TO CARRY OUT SUBSTANTIAL MATERIAL REDUCTIONS IN THEIR MEDICATION RATES. THEY ARE FINDING OBSTACLES FROM PHARMACY BENEFIT MANAGERS AS WELL AS DISTRIBUTORS, IN WHICH THEY MIGHT SAY, “WELL, IF YOU LOWERED YOUR MARKET PRICE, I WILL TAKE YOU OFF FORMULARY, CONTRASTED TO YOUR RIVAL THAT WILL CERTAINLY HAVE A HIGHER STICKER PRICE WHERE I WILL CERTAINLY MAKE “EVEN MORE CASH.” I LOCATE THAT UNCONSCIONABLE. > > Press reporter: SO, WHAT DO THE PHARMACY ADVANTAGE MANAGERS NEED TO SAY ABOUT EVERY ONE OF THIS? > > WELL, IF WE DIDN ' T CONSERVE MONEY,” NOBODY WOULD HIRE United States. >> > > Press Reporter: MARK MERRITT IS THE PRESIDENT OF THE DRUG TREATMENT MANAGEMENT ORGANIZATION, AN INDUSTRY PROFESSION TEAM THAT STANDS FOR THE NATION ' >> S LARGEST P.B.M.s.HE SAYS, ACCORDING TO THEIR RESEARCH, P.B.M.s CAN REDUCTION MEDICATION BENEFIT COSTS FOR PATIENTS BY 30 %. > > OUR CLIENTS BRING P.B.M.s IN BECAUSE THEY INTEND TO MAKE'SURE THAT BENEFITS ARE GREAT WHICH PEOPLE HAVE ACCESSIBILITY TO THE MEDICINES THAT THEY NEED. > > Reporter: HE CHALLENGES THE ALLEGATIONS BY SECRETARY> AZAR THAT P.B.M.s HAVE ANYTHING TO ACCOMPLISH WITH KEEPING MEDICINE COSTS HIGH. > > YEAH, THAT ' S INACCURATE, AS WELL AS PLUS, TO THE SECRETARY> ' S DEBT, HE SLAMMED EVERYBODY IN HEALTH CARE, MOST IMPORTANTLY THE DRUG FIRMS FOR THEIR HIGH COSTS. >> AND YOU HAVE'TO BEGINNING WITH THAT. MEDICINE FIRMS SET THE RATES. NOBODY ELSE HAS ANYTHING TO DO WITH IT. > > Press Reporter: MERRITT ALSO DEFENDS THE SYSTEM OF REFUNDS. SO THE REBATES GO TO THE P.B.M., BUT HOW DO WE UNDERSTAND THAT THOSE REBATES ARE THEN HANDED DOWN TO THE CONSUMER? > > WHAT WE DO IS, WE SEND >> THE REBATE DOLLARS UP TO THE INSURANCE FIRM, AS WELL AS THEY IDENTIFY WHAT THEY DO WITH THEM.BUT THAT IS REALLY UP TO THE HEALTH AND WELLNESS INSURANCE POLICY STRATEGY, IT ' S NOT THE P.B.M. WE HAVE SAID REPEATEDLY AS >> AN SECTOR, WE ' D MORE THAN HAPPY TO CONSIDER OTHER MODELS BESIDES DISCOUNTS. ALL WE WISH TO DO IS REACH
THE MOST AFFORDABLE INTERNET PRICE FOR OUR CUSTOMERS. IF THERE ' S A BETTER MEANS TO DO IT, A BETTER WAY TO OBTAIN COST SAVINGS, WE'' D BE OPEN TO IT. > > Press reporter: WHEN IT COMES TO THE GRIEVANCES FROM PHARMACOLOGISTS, MERRITT SAYS HE ASSUMES P.B.M.REIMBURSEMENTS ARE FAIR. AND ALSO WHEN IT CONCERNS CLAWBACKS,'LAWSUITS HAVE BEEN SUBMITTED AGAINST OPTUMRX AS WELL AS THE INSURANCE FIRMS IT FUNCTIONS'WITH, CHARGING THEM OF BENEFITING FROM EXCESSIVE CO-PAYS. MERRITT STATES THE PRACTICE IS NOT SOMETHING HIS P.B.M.
PROFESSION COMPANY CONDONES. > > IF IT IS HAPPENING, IT OUGHT TO STOP. AND ALSO THAT ' S OUR SETTING AS AN INDUSTRY. WE DON ' T ASSISTANCE IT, AT ALL. > > Press reporter: IN A STATEMENT TO NEWSHOUR WEEKEND, OPTUMRX CLAIMED, “OUR COMPANY BELIEVE THESE LAWSUITS LACK VALUE,” AS WELL AS REFUTED UTILIZING CLAWBACKS WHATSOEVER. THE 2 OTHER BIG P.B.M.s, CVS CAREMARK AND ALSO EXPRESS MANUSCRIPTS, ALSO CLAIMED THEY DO NOT PARTICIPATE IN CLAWBACKS >>. LAWMAKERS IN 28 STATES HAVE OUTLAWED CLAWBACKS OR GAG CLAUSES. PARTICIPANTS OF CONGRESS ARE WANTING TO DO THE SAME.A BILL IS CURRENTLY PENDING IN PENNSYLVANIA, WHERE MARC FALKOWITZ LIVES. HE HASN ' T USED HIS AUNT ' S WELLNESS INSURANCE TO BUY HER MEDICINE IN A YEAR, AND CLAIMS HE NOW SEARCHES FOR HIS WHOLE FAMILY ' S PRESCRIPTIONS– ALTHOUGH HE FINDS IT LUDICROUS THAT HE EVEN NEEDS TO
IN THE FIRST PLACE. > > I JUST BELIEVES THERE ' S SOMETHING SO HORRIBLY WRONG WITH THE SYSTEM. IT JUST OPPOSES RATIONAL FEELING.
