In bed with drug manufacturers, PBMs force patients to switch medications

Who knows best which medication you need—your doctor or a clerk working for a pharmacy benefit manager? If you answered “my doctor,” we’ve got some scary news. Your doctor’s order can be denied and or you will have to pay the full price if you and your doctor really believe one drug is better than another for your specific needs.

Oh sure, you can appeal the PBM’s decision, but even if you prevail, it can take months. And the PBM is counting on you to cave before going through that arduous and emotionally taxing exercise.

PBMs’ preferred drug lists influence employers and beneficiaries, who try to save money by sticking to those drugs. But when doctors prescribe medicines that aren’t on the list, PBMs bully beneficiaries into returning to the physician to rewrite the prescription – regardless of which is the best drug to treat the patient’s condition.

So why do PBMs care which drugs patients take? While you might assume it’s because they want their customers to stick to the cheapest drugs, they’re actually motivated by profits.

The way preferred drug lists work reveals a lot about PBMs’ incestuous relationship with drug manufacturers. Drug manufacturers slash their wholesale prices to PBMs to entice the PBM to include the drug on the preferred lists. Each manufacturer also pays PBMs according to the volume of their drugs the PBMs push.

And all-too-often PBMs pocket the kickbacks rather than pass them on to consumers. [Only an expert PBM auditor can help employers ferret out these rebates/kickbacks.]

Nearly 30 states recently blew the whistle on PBMs, resulting in a $9.5 million settlement with Express Scripts Inc. The states that investigated the company will receive $9.3 million of the settlement, while patients who were forced to change a prescription to a preferred drug will receive the remaining $200,000.

Express Scripts settled not because the company did anything wrong, they said, but just to get the attorneys general off their back and save future legal costs.

Walgreen Co. also settled recently – for a whopping $35 million – when they were busted for switching patients' prescriptions to more expensive drugs so they could increase their Medicaid reimbursement.

“These settlements often seem to bear no resemblance to actual damages,” an industry expert said.

“I am sure the plaintiffs are modeling the damages in these cases, but I wonder sometimes about whether the vast legal resources of these big companies wears them down and they end up accepting a settlement that is significantly less than the actual harm done just to be done with it.”

Walgreens fired the employee who blew the whistle on their drug switching scheme, and Express Scripts said they settled not because the company did anything wrong, but just to get the attorneys general off their back and save future legal costs.