CVS Caremark: PBM Health Secrecy — Daily Rise: Thursday, February 25

CVS: Health Secrecy is Everything

Today’s must-read story: USA Today reporter Jayne O’Donnell’s in-depth investigation into CVS Caremark’s bogus claim that it reduced prescription drug costs through a notorious anti-patient measure.

Last year, the pharmacy giant CVS Caremark saw just a 5% annual increase in drug costs– down from a 12% increase in 2014. CVS Health, which advertises using the slogan, “Health is Everything,” claims that the savings were produced by pharmacy benefit management companies or PBMs.

Insurance companies and big companies outsource the administration of drug benefits to PBMs, which frequently save money by limiting patients’ access to life-saving treatments. CVS Health says 100% of the money saved, goes back to consumers.

We don’t believe them. As USA Today points out, “those claims are being doubted by health care analysts and some members of Congress who say the managers hide the details of their contracts and make determining actual savings virtually impossible.”

PBMs operate entirely in secret. Even PBM clients can’t access information.

Susan Hayes, who works as an auditor of PBM contracts, told USA Today, that “auditors aren’t allowed to copy or take pictures of documents when they audit a PBM’s rebate contracts… In recent proposals from Caremark that she reviewed for clients, Caremark provided a flat amount for a rebate and not 100% of rebate savings.”

So, how did CVS Caremark slow the increase in drug costs? “CVS slowed the increase in costs mostly because it dropped drugs from clients’ lists of approved drugs, known as formularies,” USA Today reports.

In recent years, CVS Caremark has spent millions of dollars advertising their corporate promise: “The wish we wish above all — for ourselves and those we love — is health.” How does blocking access to life-saving treatments fit with that corporate promise?”

For more on this story, Robert Goldberg, vice-president of the Center for Medicine In The Public Interest, shares his take in an interesting post on LinkedIn.

If You Like You’re Health Care Fraud, You Can Keep It

The Associated Press reports that the Obama administration’s lax oversight has resulted in billions of dollars in fraud. According to the independent Government Accountability Office’s report, the Centers for Medicaid and Medicare Services “has assumed a passive approach to identifying and preventing fraud” under the Affordable Care Act.

Among the findings in 2014:

  • Social Security couldn’t verify citizenship for 8.2 million applications.
  • IRS could not determine income and family size information for 30.7 million people.
  • 431,000 applications, accounting for $1.7 billion in taxpayer subsidies, had unresolved paperwork issues as of April 2015.

Give Me My Records!

The New York Times’ Robert Pear has an update on new guidelines issued by the Obama administration that should make it easier for patients obtain their medical records. The new guidelines issued by the Office for Civil Rights at the Department of Health and Human Services remove doctors’ ability to withhold records “out of a general concern that patients might be upset by the information.”

“Some doctors seem to believe that medical records are intended only for doctor-to-doctor communication, and that patients would not understand those records,” Christopher S. Moore, a Georgia father whose 4-year-old son has a rare genetic disorder, told the Times. “We want the records so we have control over them — so we can provide them to any doctor who sees our son.”

Many patients aren’t aware that the existing rules under the Health Insurance Portability and Accountability Act of 1996 entitle patients to obtain our medical records. These new guidelines should enhance existing rules and strengthen patients’ hand when doctors and hospitals use stall tactics.

Good News on Generics

Thank you to blogger Alex Tabarrok at Marginal Revolution for sharing some good news for patients: the price for many generic drugs is falling dramatically.

“Generic drug prices are falling. Three recent studies of generic drug prices all point in the same direction. Express Scripts, a large prescription drug manager, found that: From January 2008 through December 2014, a market basket of the most commonly used generic medications decreased in price by 62.9%.”

Gee. Why hasn’t this story received the same level of coverage as pharmaceutical villain Martin Shkreli’s price increase?

It’s much easier for cable news producers to crank out segments on the outrageous outlier. Boring statistical analyses just don’t have the same headline appeal. There will always be a news bias toward the negative story. As patients, we need to return the health care debate to facts and data rather than allow ourselves to be sucked into media hype.

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