Mail Order “Blackbox” Schemes & Mass Prescription Waste
Have you been forced to switch to “Mail Order” for your maintenance medications? You could be paying more instead of less! There are currently startling differences between the costs of retail drugs and mail order drugs. Sometimes mail order is costing employers and consumers more than going to a retail pharmacy, despite what the mail order companies may tell you.
Keller Rohrback is investigating the difference between the cost of retail drugs and the cost of mail order drugs. Most Pharmacy Benefit Managers (“PBMs”)—companies that own their own pharmacies—are repackaging brand and generic drugs into different quantities and configurations than how they were originally supplied by the drug manufacturer. PBMs are pushing mail order scripts for a 90-day supply versus a 30-day supply.
The repackaged mail order drug price, known as the Average Wholesale Price (AWP), is set by the PBMs. This allows the PBMs to inflate the drug cost and keep the difference. Due to the profitability of this practice, PBMs are now forcing participants to switch their maintenance prescriptions to mail order. The PBMs may then mandate that the participant is only allowed to fill a prescription twice at a local pharmacy.
After a second prescription is issued, the participant is either encouraged or forced to switch to Mail Order, or else they will pay a higher co-pay or, sometimes, will not be able to fill their prescription at all unless they use the Mail Order system. This practice has allowed PBMs to gain control of the supply of prescription medications and gain vast profits in the process.
PBMs claim that the discounts for mail-order dispenses are greater than discounts for retail, but in actual practice they are not because of the “blackbox” profiteering that routinely occurs. For example, a 90-Day prescription for Lipitor at a retail pharmacy is approximately $376. However, the same 90-Day prescription that a PBM sells through mail order based on the repackaged higher AWP is approximately $547. (See http://2w1rra42fkzx2u7tur3ns4leh2i.wpengine.netdna-cdn.com/wp-content/uploads/2011/09/the-mail-order-repacking-game.pdf.)
The other downside of mail order is that it is costing our healthcare system millions of dollars. Centers for Medicare and Medicaid Services (“CMS”) has received complaints indicating that some mail-service pharmacies automatically deliver new prescriptions that were filled by phone or prescribed electronically from the physician’s office without prior patient confirmation.
As a result, beneficiaries have had medications delivered that had been previously discontinued or were otherwise unwanted and unnecessary at the time of delivery. Automatic refills violate CMS policy mandating that Medicare Part D sponsors require participating pharmacies to obtain a patient’s consent before automatically filing and delivering a patient’s prescription. (See https://www.medicare.gov/part-d/coverage/rules/drug-plan-coverage-rules.html.) In the end, this mail order practice is causing a large amount of drug waste and unnecessary additional costs for beneficiaries and the Part D program.
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