Drug Pricing

Patients often ask why a certain drug is on their insurance company's drug forumulary and another one is not.

This might be part of the reason

Rebates to drug distributors questioned

By David Lazarus / Los Angeles Times

06/02/08 20:58:08

       Some of the most influential players in our health-care system are three companies you might never have heard of.

They're called prescription benefit managers, and they oversee the prescription-drug insurance plans offered by businesses, governments and other organizations.

And, if the attorneys general of 28 states are correct, they've been pocketing money from pharmaceutical companies to steer patients into name-brand drugs.

The attorneys general announced a $9.5 million settlement last week with Express Scripts Inc., which handles the drug benefits of about 50 million workers.

The settlement with Express Scripts, the third-largest prescription benefit manager, followed a $38.5 million settlement this year with rival CVS Caremark Corp. and a $29.3 million settlement with Medco Health Solutions Inc. in 2004. The three companies collectively administer prescriptions for more than 200 million people.

Each company denied any wrongdoing.

"We have not been doing what they claim we've been doing," said Steve Littlejohn, an Express Scripts spokesman.

He said the company agreed to the settlement to put the matter behind it and avoid further legal costs.

"Now we can focus on what we do best," he said. "Our whole thrust is to work to drive down costs."

The settlements followed allegations from state officials that the companies enjoyed too-cozy relationships with drug makers that resulted in money changing hands to push favored medicines.

"What we found is that, very often, they would get rebates from the manufacturers but wouldn't pass it along to the plans," said Al Shelden, a senior official in California Attorney General Jerry Brown's office. Story continues here.

So, what the insurance companies do, through the prescription benefit managers, is to seek out the cheapest drugs (i.e., generics) and seek out rebates on non-generic drugs.  As a result, I get messages like this from insurance companies:

"Use formulary medications in place of these non-formulary medications:

Non-Formulary Medication                Consider these alternatives:

AVANDAMET                                       glyburide, glipizide, metformin

JANUVIA                                             metformin

ZETIA                                                 lovastatin, pravastatin, simvistatin, Crestor, Vytorin

AVALIDE                                             Benicar HCT, Micardis HCT, lisinopril HCT"

The problem is that the recommended drugs are either not therapeutically equivalent, or act on diabetes through methods of action that do not address insulin resistance, one of the core defects of type 2 diabetes mellitus.  Zetia is often prescribed as a stand-alone medication for patients who cannot or will not take statins, and it is obvious that this company has a contract with the manufacturers of Crestor, Vytorin, Benicat and Micardis.

It is the philosophy of this office to individualize treatment based on a patient's particular requirements.  If that happens to fit our patient's insurance company's formulary - even better.  But ultimately the decision to take the medication is not ours, nor insurance company's, but rather the patients.

Remember, there are consequences to chosing poorly.