Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics #00408

Submission Number:
Bill Wilt
Initiative Name:
Understanding Competition in U.S. Prescription Drug Markets: Entry and Supply Chain Dynamics
I have been a pharmacist for over 20 years. The last 2 years have created more havoc and change in the pharmacy market because of collusive, secretive, and monopolistic practices of PBMs. These Pharmacy Benefit Managers are nothing more than middlemen who have coerced senators, state representatives, etc. through their lobbying to parlay themselves a business model in which they radically underpay the retail pharmacies (under drug cost in may cases), manipulate the elderly with confusing misinformation on mandatory mail order schemes, pocket spread money from the drug manufacturers for preferential tier placement, charge clawbacks on prescriptions(even on medicare prescriptions), offer our PSAO(Leadernet-Cardinal Health) virtually take or leave it contracts that we have no power to negotiate, and basically bully the small independent pharmacy, as well as the major chains that seem powerless to control their own pharmacy destinies. Right now, three companies control over 82% of the prescription medicare market. The US government knows this and is doing nothing. Over 40% of the specialty drug market is controlled by one company. The recent events surrounding the CVS/Aetna merger is a disaster waiting to happen. How did these events unfold? Well, collusive arrangements between the PBMs and the drug companies, with the PBM masquerading as a middleman that drives down pricing (if were really true, why was the $600 Epi Pen (that my pharmacy gets paid about 6$ to fill( a 1% margin) approved for a lower copay than the $300 similar generic item? The PBM wants to get that rebate money from the drug maker for preferred tier structure status. The PBM makes more money (if the rebate is 40% he nets about $240. If we fill the generic the PBM rebate is halved(or less). The $240 is pocketed by the PBM in a complex rebate/points system, that while by definition may not be directly illegal, this system richly rewards that PBM for being in the middle. When a Medicare Rx is filled the PBM charges a transmission fee, possible after the point of sale-a DIR fee, a copay assessment fee, service fee, a reverse rebate fee, and a potential clawback fee. How could the FTC , SEC be so obtuse not to be aware of the complaints by the brick and mortar entities (my store, chain stores, etc.). The false premise that we can modify patient behaviour by MTM programs that in reality are nothing more that scorekeeping formats for Medicare Advantage plans to collect federal subsidies for their CEOs under the guise of medication adherence. What a fantastic joke! The current reimbursement model under the PBM guise is simply not sustainable by any corporate entity. There is no way a mail order company can fill a prescription cheaper than me-example: today I filled a prescription for 90 lisinopril 20mg and got paid $1.11 total for preparing the rx, providing the bottle, computer, insurance, labor, providing the medication, etc. If a pharmacist can safely check off 20 rxs/hr., how can they pay themselves 20 x $1.11=$22.20/hr and stay in business? Nobody can. They are purposely selecting limited formularies for us to do their dirty work while they fill the profitable drugs-basically these monopolies are contributing to directly putting their competitors out of business. Why is it that the US government tell the public they must have insurance, but then a PBM or insurance company tells them they can use only certain pharmacies? Seems to me the government just directly contributed to these operational monopolies? How much money is being spent under the table to keep these scams going? Please - we need immediate regulations in place at the federal level to stop these anticompetitive collusive entities from operating under the guise of caring, competitive enterprises. You need look no further than the pracitces of United Healthcare(their PBM Optumrx), BC/Bluesheild(their PBM Prime Therapeutics), CVS/Caremark (Caremark), Aetna, Cigna, Humana, Rx Solutions, etc.