March 28, 2017 – It’s not insurers or Big Pharma sustaining rising prescription drug prices—it’s PBMs that are supposed to be saving patients and self-funded insurers money.
Stop me if you’ve heard this one before—PBMs insist that drug prices would be even higher without them. Since you don’t have much of a choice (just three firms control 80 to 85 percent of the market, and each of “the big three” appears at the top of the Fortune 500), you may have been forced into accepting this notion. Now, after years of PBM abuses, most self-funded companies employ additional layers of consultants to limit pricing mischief.
David Dayen, writing in The American Prospect notes that, “Americans pay the highest health-care prices in the world.” And thanks to a system that allows undisclosed rebates, artificial price inflations, kickbacks, steering, and other deceptive practices, “PBMs are sucking money out of the health-care system—with hardly any public awareness of what they are doing.”
According to the Centers for Medicare and Medicaid Services in the past 20 years, expenditures on prescription drugs have jumped 1,100 percent. There are lots of reasons for this—biosimilars and other specialty drugs among them—but there is no question that PBM profit margins have been growing as well. According to one report, Express Scripts’ adjusted profit per prescription has increased 500% since 2003.
Your PBM’s posture as a cost-reducer depends on the notion that by aggregating customers—including employers that self-insure—they are able to negotiate discounts from both drug companies and pharmacies. The savings, in theory, pass through to plans and their patients. That’s not what’s happening of course. Industry consolidation, including vertical integration, has meant that the billions of dollars in profit are coming not out of the pockets of big drug companies or insurers, but of struggling independent retail pharmacies and consumers.
There are indications, for instance, that PBMs place drugs on their formularies based on the rebate they are able obtain, rather than the lowest cost or what is most effective for the patient, and pricing games with brand-name drugs are just par for the course—PBMs have devised even more profitable schemes for generics. Check out Mr. Dayan’s eye-opening article here (and maybe call one of Scripta’s pharmacy savings experts…)
On June 12, 2013, Scripta founder Dr. Paul S. Bradley welcomed a group of physicians and executives to a meeting of its Physicians Advisory Board.
Now in its third year, the Physicians Advisory Board gives Scripta’s corporate clients an opportunity to discuss medical issues of utmost relevance to the client’s business and to make local doctors aware of unique industry conditions that may impact treatment of the client’s employees.
A Unique Opportunity to Impact Care
The idea has been to create an opportunity for feedback, by way of ensuring the very best care for the employee. As Dr. Bradley puts it, “To my knowledge, this is a unique arrangement. Normally, insurance is the only thing that links us together.
“Physicians and HR executives never meet. But we probably ought to, and today these caregivers are here of their own free will and incredible graciousness to meet with executives from a great company that goes out of its way to take care of its employees.”
The Physiological Effects of Sleep Deprivation
For the past two years, one Scripta client has been developing a Safety Management System, which includes a Fatigue Management Program. Chris Hallman (formerly of Baines Simmons Americas) was on hand to talk about wakefulness in the workplace and to ask participating doctors to give special attention to the ways in which their recommended treatments might impact alertness.
It is well known that fatigue impacts accuracy, timing, attention span, focus, and our ability to integrate information, and it stands to reason that the dangers of prolonged wakefulness for those working in high-criticality jobs in manufacturing and transportation safety are significant.
Mr. Hallman pointed out a less well-known fact: “The more tired we get, the worse we are at judging how tired we actually are.”
Research indicates that sleep deprivation affects physiology in several unexpected ways, impacting our circadian rhythms and disrupting the systems that regulate both circulation and body temperature.
Most dangerous is the threat of micro-sleep. Mr. Hallman again shared research to go along with anecdotal evidence. We have all experienced that moment, many of us while driving, when we jerk suddenly awake from an instant’s sleep. Alarmingly, these mini-naps—measured in just fractions of seconds—can occur long before we feel any of the more familiar symptoms of fatigue.
Physician Advisory Board Recommendations
The results of prolonged wakefulness can be catastrophic.
Fatigue was one of the contributing factors in the near meltdown at Three Mile Island, the wreck of Exxon Valdez, and preceding the disastrous final flight of the space shuttle Challenger.
“Sleep disorders are mainly undiagnosed,” said Dr. James A. Daly, Director of Southeast Sleep Disorders Center in Savannah, Georgia. “A full twenty percent of the U.S. population may have undiagnosed sleep apnea and/or insomnia.”
The meeting concluded with the recommendation that a sleep test be administered to any employee with a BMI of 35 or greater or a collar size greater than 18. Doctors were also asked to give special consideration to the potential impact of treatment recommendations on patient alertness.
Where did these monster pharmaceutical companies come from? And how did Big Pharma become the most profitable industry in the United States, with an annual return of 17% on revenue? Dr. Paul S. Bradley tackled these and other thorny questions that impact household budgets for millions of Americans, wondering aloud, “Why is it that so many people can’t afford their medications?”
It’s a fair question, what with drug companies making billions of dollars per year, per drug: Pfizer’s Lipitor, before it went generic, was raking in $12.9 billion annually. There is the cost of innovation, of course, and Dr. Bradley concedes that a new drug takes 7 to 10 years to develop. Only 3 out of every 20 are approved, however, and when you consider those costs, bringing a single drug to market can cost upwards of $1.3 billion dollars.
With that said, vastly more is spent on marketing than R&D, and today there are 7 pharmaceutical representatives for every one doctor in the United States. Those “free” samples are alluring, but what happens when there’s a generic available? Insurance has played a role in the rise in drug costs as well. Prior to the rise of prescription benefit coverage, retail drugs most often cost $30/month. Today, the target co-pay is $30/month, with the remainder absorbed by the insurer.
Most insured Americans work for self-funded companies, and skyrocketing drug prices mean that everyone is getting squeezed. Companies are forced to pass those costs on to their employees, and statistics show that people who can’t afford their medications either don’t take them or take dangerous steps to economize. The result is $290 billion dollars annually in avoidable hospitalizations and emergency room visits.
Ourlife Health announces national launch for program designed to address the spiraling cost of prescription medications.
June 12, 2013 – SAVANNAH, GA – In tough economic times, we cut corners and, if you are one of the 6 in 10 Americans who take prescription medications, you might even be tempted to skip a dose here and there. You wouldn’t be alone. Over 25 million Americans don’t take their medications as directed due to cost, which means that serious medical conditions go untreated—according to a Harvard study missed meds cost the US Healthcare system upwards of $290 billion annually.
In order to combat this alarming trend, Ourlife Health announces the national launch of Scripta, an innovative program designed to address the spiraling cost of prescription medications. The program is currently deployed on behalf of three of the largest employers in Savannah, Georgia. Scripta has saved one Fortune 500 company over $5.4 million in prescription drug costs in just three years, in addition to significant co-pay savings for over 5000 of its employees.
Ourlife Health’s Chairman and Founder, Dr. Paul S. Bradley says that doctors are an important part of the solution. “We have more options than ever when it comes to prescription drugs, but all the medicine in the world doesn’t help if people aren’t taking it correctly. At Ourlife Health, we think cost needs to be part of a doctor’s decision-making process, and Scripta makes that possible.”
Launched in 2008 as S.A.V.E Rx, Scripta is currently focused on providing relief for self-funded companies, which employ about 60% of all insured workers in America. It is these employers who pay for the portion of drug costs not-addressed by employee co-pays, costs that have grown at a rate that far exceeds inflation. “The goal,” Bradley says, “is to make sure that your employees are getting the best meds at the best price. When that happens, everyone wins.”
Scripta provides immediate savings for self-funded organizations by helping employees find “The Best Meds at the Best Price.”™ The program supports employee health by streamlining valuable cost and co-pay information and by providing information about cost-saving medication alternatives to employees and their physicians.
About Ourlife Health
Ourlife Health is innovative health and wellness company founded by Dr. Paul S. Bradley and a group of sixty area physicians in Savannah, Georgia. The company is dedicated to working with businesses, individuals, and their physicians to improve medical outcomes and patient compliance, reduce health care costs, and optimize quality of life.
Your PBM may not be giving you the best prices (because it’s not always in their best interest to do so).
In theory, Pharmaceutical Benefit Managers (PBMs) are are supposed to simplify things by dealing with claim transactions between pharmacies and health-plan sponsors, as well as use their size to negotiate pricing with drug makers and those same pharmacies. Unfortunately, that’s not the way it most often works.
Today, PBMs are more often both benefit administrator and provider, and most enjoy very close ties with drug manufacturers. Because of this, PBMs often end up disproportionately influencing health care decisions, in the interest of maximizing shareholder profits and often to the detriment of patients and plan sponsors.
PBMs often control prescription drug plan formularies and get rebates from the drug manufacturers for favoring certain brand-name drugs over others. These deals are often shrouded in secrecy, with PBMs frequently collecting payments without sharing information with health plan sponsors. Such profit incentives can actually result in higher-priced medications being recommended to customers.
Scriptas is a completely different kind of beast.
The recommendations provided by Scripta are based on physician input and actual drug costs, and are not driven by rebates or directed by internal profit margins. Our goal is to support the doctor-patient relationship and thereby to create a healthier, more productive workforce and a culture of cost containment that supports the plan sponsor’s business goals.
June 28, 2010 – Ourlife Health secures multi-year deal to implement health and wellness programming for the employees of Gulfstream Aerospace, Savannah’s largest employer.
The Savannah Business Journal was among those to report on Ourlife Health’s early success in driving prescription savings on behalf of self-funded employers and their employees. Scripta was founded by Dr. Paul S. Bradley and a group of Savannah physicians, making its debut in 2010 as “S.A.V.E. Rx.”
Initially, Gulfstream employees received a customized, confidential S.A.V.E. Rx medication report, which they were encouraged to share with their personal physician. The intent was to empower them to make better informed decisions about medication options, with a view to controlling out-of-pocket costs.
At the time of the announcement, Dr. Bradley said, “With physician involvement, medication costs can be effectively lowered and patient compliance improved – and that leads to improved long-term outcomes. Ourlife occupies a unique niche in the health care industry because we offer our clients a proven product that helps patients and their doctors more easily identify ‘The Best Meds at the Best Price.’”
The article also quotes Paul Dellinger, Gulfstream’s Director of Environmental Health and Safety, “We are pleased to offer our employees this new product as another benefit of our Partners 2 Health Program. Ourlife offers a turnkey solution to helping our employees improve their health and wellness while potentially reducing employee and employer costs.”