Community Pharmacists Hear Mail Order Complaints; Debunk PBM Myths

September 23, 2009

As appeared on The Hill.com
By Kevin Schweers
National Community Pharmacists Association 

A number of independent community pharmacies that are members of the National Community Pharmacists Association (NCPA) recently asked their patients about their experiences with mail order pharmacies. The survey struck a chord with patients who have experienced a number of problems with mail order. The findings,announced late last week, are a timely reminder of the need for Congress to do two things in health care reform: First, protect patient access to the pharmacy of their choice. Second, to enact common sense disclosure and related requirements on the pharmacy benefit manager (PBM) industry, the largest mail order operator. 

Patients reported going without their medicine due to late mail order delivery. Most of these patients wound up paying twice for the same prescription - once to the mail order company and again for an emergency fill in a community pharmacy when the shipment didn't arrive in time. Privacy concerns were expressed by those whose meds were mistakenly shipped to, and opened by, a neighbor. Safety questions were identified by patients on medication sensitive to heat or cold when insufficient precautions were taken. 

Here's just one of the patient stories we heard: "My insulin has come with chunks of frozen ice floating in the vial - plus in a plastic bag with no support - it is a wonder they did not break. I had to pay for medicine out of pocket ... These are just a few of the things they have done. Mail order should not be mandatory, we should have a choice." 

Patients required to use mail order pharmacies reported higher incidences of these problems. Given a captive patient base with no choice in pharmacy, the mail order company arguably has less incentive to prioritize customer service. All the more reason to protect, if not expand, the patient's choice in pharmacy in health care reform. 

While alarming, the findings are not surprising. They document the mail-order messes that community pharmacies are asked to clean up far too often. 

Mail-order pharmacies are overwhelmingly run by pharmacy benefit managers, the entities hired by health plan sponsors to administer drug benefits. These multi-billion dollar corporations have the unique advantage and authority to set drug prices for both their community pharmacy competitors and their own mail-order operations. They routinely abuse that standing by paying themselves more for dispensing drugs than they would a community pharmacy. They go by names such as CVS Caremark, Medco Health Solutions, Inc. and Express Scripts, Inc., and they reported a 20 percent increase in profits last year alone. 

The PBMs' chief lobby in Washington says these patients are wrong and that mail order is the solution. The diabetes patient who received a package of frozen insulin says otherwise, but let's examine their arguments nonetheless. 

PBM Myth #1: A JD Power & Associates poll proves there are no problems with mail order. 

The same survey demonstrates that overall consumer satisfaction with community pharmacies, such as Health Mart and the Medicine Shoppe, surpasses consumers' mail order experiences. In fact, the big three PBMs (CVS Caremark, Express Scripts and Medco) dominating the mail order market were rated as decidedly mediocre. For unknown reasons, or perhaps mistakenly, the survey classifies Health Mart and the Medicine Shoppe as "chains", even though these are locally owned, independent community pharmacies operating under their respective franchise banner.. Further, nothing in the J.D. Power survey dispels any of the mail order problems experienced by patients and chronicled by NCPA. It simply documents that these problems haven't (yet) plagued a critical mass of Americans. 

PBM Myth #2: Mandatory mail order plans have been shown to provide savings compared to plans without mandatory mail order. 

There hasn't been a single independent peer-reviewed study demonstrating that mail order pharmacies can provide the grand scale savings claimed by PBMs. The fact that PBMs control access to nearly all prescription benefit data has prevented any comprehensive analysis of the mail order savings these companies profess. Instead, PBMs often tout a flawed, six-year-old GAO study based on self-reported data from the insurance plans that was never verified. The survey design was inadequate in that it only compared 14 brand name drugs, and 4 generics, despite the thousands of drugs commonly dispensed by community pharmacists. Furthermore, the study led to a large overestimate in that it compared insured patients using a mail order pharmacy against cash-paying customers. 

More recently, in June, a top federal auditor told Congress he questioned whether or not beneficiaries of the Federal Employee Health Benefits Program (FEHBP) were well-served by PBMs, primarily CVS Caremark. He testified that "There's a good chance we're not getting a good deal because of the lack of transparency." 

PBM Myth #3: Mail-order pharmacies fill prescriptions with 20 times the accuracy of community pharmacies. 

Another unreliable assertion based on self-selected data chosen by the PBMs. If we step outside of academia and look to history a different story emerges. A coalition of more than 30 state attorneys general in the last five years filed lawsuits alleging PBM abuses, securing $370 million in restitution. Two former mail order pharmacists in Hunt/Gauger vs Merck/Merck-Medco had alleged that when a prescription wasn't filled on time they would be ordered by superiors to destroy the script and any associated paperwork to hide the evidence. This is in addition to their allegations that the PBM had delivered medications without ensuring that the correct dosage, strength, or quantity was being dispensed. 

PBM Myth #4: By forcing more seniors into mail-order programs, Medicare could save "billions" of dollars. 

Medicare prescription drug (Part D) beneficiaries already have the option to use mail order and what do they do? They vote with their feet and choose to go to their community pharmacies. In some instances, PBMs charge Medicare beneficiaries higher co-payments for using community pharmacies in order to steer patients toward the PBM's mail-order businesses. Even then, beneficiaries choose to pay more to use their community pharmacies. Overall, however, there is no independent, peer-reviewed data proving the large-scale savings PBMs promise (see PBM Myth #2) and evidence that the opposite is true. 

The secretive, expensive PBM model puts profits before patients and health plan sponsors. Recognizing this, public and private plan sponsors are increasingly moving away from this model toward a more transparent system. The Pentagon alone anticipates $1.67 billion in savings from doing its own negotiating on drug discounts and manufacturer rebates in the TRICARE program. 

Before handing any more of our health care system over to these companies, lawmakers should think twice. In health care reform, Congress should require PBMs to do two simple things. First, assume fiduciary responsibility to patients and plan sponsors first - not shareholders or manufacturers. Second, disclose information on their fee structure as well as their countless arrangements with manufacturers that can lead to a more expensive, though no more effective, drug being "preferred." 

The country would save a fortune and health outcomes wouldn't suffer in the least.

NCPA Media Contacts

Kevin Schweers
Senior Vice President, Public Affairs
703.838.2682

John Norton
Director, Public Relations
703.600.1174

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