Bad Behavior
Published Online: Tuesday, January 24th, 2012

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The New York Times reports, “After more than two years of investigation, CVS Caremark agreed on Thursday to pay $5 million to settle charges by the Federal Trade Commission that the company had misrepresented the price of certain prescription drugs in one of its Medicare drug plans, causing many older consumers to pay significantly higher prices than advertised. This settlement comes at a time of intensive government scrutiny of pharmacy benefit managers like CVS Caremark, which run prescription drug plans for employers and insurers. Currently, the F.T.C. is reviewing the proposed merger of the two main competitors to CVS Caremark: Medco Health and Express Scripts.”

What do you make of this announcement? Is it evidence that PBM’s in general—and CVS Caremark in particular—are more interested in making money than helping consumers save money on their prescription purchases? Also, is this more evidence that the proposed merger of Medco and Express Script is not good for anyone but the companies?

There is nothing wrong with making money from providing health care services, but taking advantage of people to do it is wrong. When market concentration occurs so that there are fewer players is this type of behavior more likely? I think it might be.

Al January 24th, 2012 10:01:0310:03:55 PM

The Medco/ESI merger is bad news for retail pharmacies, especially independent small town pharmacies. ESI has terrible reimbursement already and Medco is usually not that great either. With a merger, their pool of participants will swell and their bargaining power will be too great for many to deny contracts. Pharmacy needs to restructure as a profession and change from being bound by product reimbusement to being rewarded with service reimbursement. MTM is not the only avenue. Simple consults at the pharmacy window, OTC counseling, and follow-up and consultations with the doctor should be paid to the pharmacy on a fee for service basis by all customers and/or their insurers. The pharmacy associations need more power.

Thom Gross, Express Scripts January 25th, 2012 11:01:5211:52:37 AM

Combining Express Scripts and Medco is an opportunity for two leading pharmacy benefit managers to apply private-sector know-how to solve our country’s biggest healthcare challenge: lowering cost while raising quality.
By joining complementary strengths, the merger will benefit patients, employers and managed care plans, leading to safer and more affordable medicines.
PBMs play a central role in healthcare. We drive out fraud, waste and abuse while lowering costs and improving health outcomes. We increase adherence to prescribed medicines, identify and correct prescription errors, and promote cost-effective delivery. Our efforts save billions of dollars and extend millions of lives. Over the next decade, PBMs will produce $1.25 trillion in savings for employer plans plus $671 billion for Medicare Part D, according to the Pharmaceutical Care Management Association.
By lowering healthcare costs for employers, we help boost employment and preserve employee benefits.
Neighborhood pharmacies have been and always will be essential partners in advancing our mission. More than 60,000 pharmacies of all sizes participate in our retail network, including 90 percent of all independent pharmacies.
Express Scripts and Medco have well-established histories of doing what’s right for patients. The merger would accelerate our ability to do even more.

Al January 25th, 2012 09:01:5509:55:25 PM

There are a ton of reimbursement examples that show the cost savings comes directly from reimbursing less that what the drug product costs the pharmacy to purchase. It's easy to save money when you're cutting out the supplier's costs. The plan participants would know no difference until their local pharmacy closes its doors.

Jerry January 26th, 2012 03:01:0703:07:18 PM

If Express Rx is so great, why did Walgreens quit taking their plans? Why are they sending their customers to independents to bear the brunt of subcost reimbursement? The PBMs can toot their own horn all they want about all the 'savings' they create for their members and employers/government, but why should that savings come out of the bottom line of my business? Moreover, if the the PBMs with their holier than thou attitude object so loudly to any and all transparency bills floating around on Capitol Hill? I lost a lot of money last year due to falling reimbursement levels and from the way 2012 is starting out, I just hope I can hang on for another year. State surveys have shown that it costs the average pharmacy over 7 dollars to fill a prescription. When the PBMs, most notably EXP, Medco and CRK are paying me less than two dollars over my true cost to provide medications to their members, I have to wonder how much longer I can afford that 'privlege'.
With all due respect, Mr Gross, what you wrote above is the biggest bunch of hogwash I've ever read. Especially the part saying "Neighborhood pharmacies have been and always will be essential partners in advancing our mission". My feeling is that you and your ilk would love to see neighborhood pharmacies, and retail outlets in general, cease to exist.

Mike January 31st, 2012 03:01:0603:06:18 PM

Capitalism at it's best. When the little players (independents, customers and the like) get enough they will be looking for business and or mail order from such places like China, India and Africa. Watch. Money. Nothing else but money.

Your comments are valuable to us. Thank you.

Fred Eckel, RPh, MS, Editor-in-Chief of Pharmacy Times

Blog Info

This blog focuses on what our Editor-in-Chief sees as the future of pharmacy.

Author Bio

Fred Eckel, RPh, MS, is the Editor-in-Chief of Pharmacy Times, a position he has held since 2002. Mr. Eckel is a professor at the Edelman School of Pharmacy, University of North Carolina at Chapel Hill. He serves as executive director of the North Carolina Association of Pharmacists.

In this blog, Eckel will provide commentary on relevant issues impacting pharmacists and pharmacy professionals, including the merging of pharmacy benefit managers, the implications of health care reform, the conversion of major drugs from prescription to over-the-counter, trends in pharmacy careers, and opioid abuse. He will also discuss legislative issues that impact pharmacists, and comment on the evolving role of the pharmacist.