Express Scripts Says It’s “Not Contractually Obligated To Contain Costs”
This past Sunday evening, the 50-year-old investigative journalism TV show “60 Minutes” aired a report that looked at the role of pharmacy benefit managers and high drug prices entitled “The Rockford Files.”
It’s probably the best 14 minutes of video an employee benefits professional can watch.
The “60 Minutes” Story In Brief
The City of Rockford, Ill. had two babies on its plan who had a rare disease. The medication to treat this disease, Acthar, costs approximately $250,000 per child per year. As a result, the city’s health plan costs rose so much it had to cut back on basic services, like police and firefighters.
Acthar is a medication that has been on the market for decades and used to be inexpensive. However, the manufacturer of Acthar, Mallinckrodt, has taken steps that have resulted in the drug’s dramatic price increase:
- Bought the rights to the ONLY Competing medication, Synacthen (which cost only $33 in Canada)
- Stopped Synacthen’s distribution
- Raised the price of Acthar dramatically
Now Enters Express Scripts
The City of Rockford has about 1,000 employees on its self-funded health plan and uses Express Scripts as its Pharmacy Benefits Manager (PBM). As it happens, Express Scripts negotiated a deal with Mallinckrodt to be the sole distributor of Acthar and as a result, makes more money when more Acthar is prescribed. Accordingly, Express Scripts did not try to negotiate a lower price for Acthar.
The City of Rockford is suing Express Scripts.
In a statement to “60 Minutes,” Express Scripts said it was “not contractually obligated to contain costs.”
The city’s attorney argues that containing costs is the exact reason the city hired Express Scripts.
There is more to the “60 Minutes” piece and it’s worth watching it in its entirety, but I’ll stop here.
Pharmacy Benefit Manager (PBM) Rebates
I wrote a recent blog about the rebates that PBMs receive from pharmaceutical manufacturers. These rebate payments cause PBMs to be paid more when prescription medication prices increase… creating a potential conflict of interest with their employer health plan customers.
What Employees Benefits Professionals Need To Know About PBMs
- Do your groups’ PBMs have an obligation to control costs? Maybe not.
- If your groups’ PBMs do not have this obligation, there are things you can do:
- Change to a transparent PBM—We have done this at Compass for our own employees. My son’s asthma medication went from $300 per month to $100 per month
- Review the PBM contract
- Put in Step-Therapy
- Put in prior-authorization measures for expensive medications
- Use an outside pharmacy consultant to set better criteria for the prior-authorization process
It’s unfortunate, but in healthcare, it’s safer to assume that some sort of shenanigans are going on behind the scenes until proven otherwise.
Compass help employers and employees navigate high drug prices and changes in their pharmacy benefit plans so they can save money on their prescription medications.
Contact Compass to learn more about how transparent PBMs can lower employer prescription costs.
To learn How Companies Can Make Specialty Pharmacy Drugs More Affordable, watch this webinar.