CVS Health Rationing Health Care
The rationing of life-saving treatments has begun.
CVS Health announced this week that it earned $43.73 billion for the second quarter — beating earnings expectations while sending their stock price higher. According to the Wall Street Journal, “CVS Health Corp. raised its profit outlook for the year helped by its pharmacy-benefit business but cut its sales forecast as fewer shoppers come to its drugstores to buy snacks, shampoo and over-the-counter medicines.”
So, how did CVS Health earn record profits – despite fewer customers buying candy bars in their stores? By blocking patients’ access to the treatments prescribed by their doctors.
On the company’s earnings conference call, CVS Health CEO Larry J. Merlo credited the company’s pharmacy benefits manager, or PBM with the “gross wins” from its drug rationing efforts.
“I’ll start with the PBM. And I’m pleased to report that with our differentiated value proposition, we see 2017 shaping up to be another successful selling season,” Merlo said on the earnings call. “We currently have gross wins of approximately $7.4 billion and net new business of approximately $4.6 billion. These new business numbers do not include any impact from our individual Med D PDP.”
That’s $1.1 billion in free cash during the quarter, more than $2.9 billion year-to-date, by blocking patients access to the right treatments.
“Gross wins,” indeed.
2017: CVS Plans to Expand Drug Rationing by 36 Percent
CVS Health isn’t ashamed of its practices — it plans to INCREASE its drug rationing by 36 percent.
Perhaps the biggest news from the company this week: its plan — for the first time — to block cancer patients’ access to brand-name cancer drugs. CVS Health spokeswoman Carolyn Castel admitted that “it’s the first time that brand-name cancer drugs have been taken off CVS’s standard formulary.”
CVS Health will no longer cover treatments for leukemia and prostate cancer in 2017 — part of a 36 percent increase in the number of life-saving treatments not-covered by the company. In 2017, CVS Health will ban three dozen more treatments, bringing the total number of excluded drugs to 131.
This is wrong. However, profit-seeking companies have every right not to carry these medications as they see fit and you, the consumer, have every right to take your business elsewhere. And if you are stuck with CVS Caremark because of your insurance plan and you need any of these medications — you have every right to change your insurance. Apparently most of you are already not shopping at CVS for your shampoo and other sundries anyway.
The List: 131 Life-Saving Treatments Cut by CVS Health
Are you affected by CVS Health’s decision to block life-saving treatments? Check out the list below
- Analgesics: Butalbital/APAP/Caffeine Capsules (All Brands and Generics)
- Antiandrogens: Xtandi, Nilandron oral tablets
- Antidepressants- SNRIs: Venlafaxine ER Tablets except 225mg (All Brands and Generics)
- Antilipemics: Crestor
- Beta Blocker Combinations: Dutoprol oral tablets
- Carnitine Deficiency Agents: Carnitor/ Carnitor SF oral solution
- CML – Oncology: Gleevec (MSB), Tasigna
- CNS – Huntington’s Disease: Xenazine
- Colony Stimulating Factors: Neupogen
- Corticosteroids: DexPak oral tablets, Millipred/ Millipred DP oral tablets, dose pack & oral solution
- Cystic Fibrosis Tobi Podhaler/ Tobi (MSB) Dermatology Alcortin A gel, Aloquin gel, Novacort gel
- Hemophilia: Helixate FS
- Hepatitis C: Daklinza, Olysio, Technivie, Zepatier
- IBS Constipation: Amitiza
- Insulin: Lantus, Toujeo
- Nasal Steroid Combinations: Dymista NSAID’s Duexis, Vimovo
- Opioid Analgesics: Abstral
- Opioid Antagonists: Evzio
- Oral Anticoagulants: Pradaxa
- Overactive Bladder: Enablex, Gelnique, Toviaz
- PAH Endothelin-Receptor Antagonists: Opsumit
- Pen Needles/Syringes All non-Becton Dickinson pen needles and syringes
- Potassium Supplements Klor-Con oral pack for solution
- Proton Pump Inhibitors: Nexium, Zegerid oral suspension and capsules
- Short Acting Beta Agonists: Proventil, Ventolin
CEO Larry Merlo: The $28.9 Million Dollar Man
The biggest beneficiary of CVS Health’s multi-billion-dollar earnings report: Larry J. Merlo.
In 2015, Fortune’s Claire Zillman revealed that Larry Merlo is the highest paid CEO in the country when compared to his workers. “According to a Payscale report, which calculated ratios based on the cash compensation of CEOs at the 100 highest-grossing public companies in the United States in 2013, CVS CEO Larry Merlo has the highest pay compared to his employees: $12,112,603—422 times as much as the average CVS employee, who earns $28,700 per year.”
Merlo’s salary has gone even higher. According to Reuters, Merlo earned $28.9 million in total compensation last year.
Quote of the Day: Did the Guy Cure Cancer?
In 2014, Los Angeles Times columnist David Lazarus took CVS Health to task for paying Larry J. Merlo a salary that is 422x greater than the median CVS worker.
“I mean, what, did the guy cure cancer? Did he end the scourge of Alzheimer’s? Under what possible set of circumstances could the head of not the country’s largest drugstore chain but the second-largest be worth 422 times his typical underling?”
Time for Lazarus to update the column. Instead of curing cancer, Merlo is now earning a record salary BECAUSE he’s blocking cancer treatments.
