Posted: Feb 6, 2013 1:13 PM by Elizabeth Hagedorn
Updated: Feb 8, 2013 1:57 PM
JEFFERSON CITY - Drugs given at the pharmacy may not always be the ones doctors prescribe--and the difference could be dangerous. But the practice of drug substitution is not only common, it is the preferred approach for some prescription plans to keep costs down.
When patient Tracey Joyce went to her local pharmacy to refill her prescription for Celebrex, an anti-inflammatory medication she had been using for years to treat back pain resulting from a shoulder surgery, her pharmacist told her that her health insurer's pharmacy benefit manager had rejected her claim.
Joyce was given the option of taking Naproxen, a chemically different yet similar pain-relief drug, or paying for the Celebrex out of her pocket. Joyce said could not afford the Celebrex on her own, so she had no other choice but to settle for the much cheaper substitute.
After several months of taking Naproxen, Joyce landed in the hospital with six stomach ulcers and a $15,000 insurance bill--something her doctor attributed directly to the new medication.
But this didn't mark the end of Joyce's health problems. After her gastrologist prescribed her a drug to treat the ulcers, Joyce went back into the pharmacy only to have that drug switched.
"I went back to the gastrologist and he basically said you can take that for the next ten years and it's not going to cure ulcers. That's not what it's for."
The pharmacy benefit manager (PBM) required she take the new medication until it proved ineffective. After months of using the Naproxen, the PBM switched Joyce back on the original medication.
"Everything's fine now, but you know I say a prayer every time I go to fill a prescription."
Substitution Met with Skepticism
Joyce's case isn't rare. In fact, most of the major PBMs have similar drug substitution policies.
Joyce's PBM, Express Scripts, is a St. Louis-based company that administers drug benefit claims to health plans across the country. The Fortune 100 company covers prescription drugs for one out of every three Americans.
Therapeutic interchange, more commonly known as drug substitution, is the practice of replacing a patient's prescription drugs with chemically different drugs that are expected to have the same clinical effect. Express Scripts put Joyce on step therapy, a policy requiring the patient to try a cheaper drug before moving on to the more expensive alternative--even if that more expensive drug is what the doctor prefers.
While the frequency of substitutions varies with each PBM, doctors say they have deal with it all the time.
Missouri state Senator Rob Schaaf, R- St. Joseph, is a family physician calling for "common sense" from PBMs.
"I'll have the pharmacy call me and say, 'Sorry this medicine isn't on the approved list. You need to choose from this other list. Because, if you go with the drug that you wrote for, it will cost [the] patient two hundred dollars,'" Schaaf said.
But Dr. Steve Miller, chief medical officer for Express Scripts, said the problem lies with doctors prescribing high cost drugs to begin with.
"If there is a lower cost drug that is just as good at treating your illness, it would be great if that's the one the doctor started you on, and escalated only if you had experienced failure," Miller said.
In Missouri, doctors have the option of signing "Dispense as Written" or "Substitution Permitted" on their prescriptions. In the first case, the pharmacy must dispense only the drug written on the prescription. But if a doctor allows a substitution, the law requires the PBM to contact the doctor's office for approval.
Dr. Lori Feeler, a primary care physician in Jefferson City, said she almost always allows for substitution so her patients can get the generic, cheaper version of the brand name drug.
When the prescription plan switches her medication to something in a different therapeutic class, Dr. Feeler said, while "it's not what's always best," her patients should recognize that this is one way the PBM is trying to be cost-effective.
"We can get the prescription approved but it may come at such a cost to the medicine that the patient still cannot afford to purchase it. So then, it's up to them."
In 2008, Governor Jay Nixon--then serving as Missouri's attorney general, along with 28 other state attorneys general, agreed to a $9.5 million settlement with Express Scripts. The company agreed to pay up to $200,000 in refunds to patients related to certain switches between cholesterol-controlling drugs.
Express Scripts said it has improved its communication practices since then.
"We clearly changed some of our practices as a result of that suit, but we felt very comfortable we already had it right, almost all the way, and it just allowed us to improve some of our practices," Miller said.
As a former Federal Trade Commission policy director, David Balto brought major enforcement actions against major pharmacy benefit managers in the late 1990s. Today, he describes the lack of transparency over the PBMs' finances as "a chronic problem."
"I think consumers are clearly paying much more for drugs because we allow these PBMs to basically be the toll booth to our drug problem," Balto said.
The Cost of Care
As the price of prescription drugs has skyrocketed, insurance companies have turned to PBMs as a way of administering their health benefits in a cost effective way.
But critics complain that PBMs profit from putting drugs on their formulary--the list of drugs each will cover--for which those critics say the PBMs get kickbacks from drug manufacturers, even if they're not the most effective drugs on the market. The drug plans typically refuse to disclose agreements with drug manufacturers, labeling them "trade secrets."
Express Scripts insists those who decide the company's formulary makeup have no insight into price, yet it won't release the names of the committee members-- citing company policy that they remain anonymous.
David Morgan, one of the country's leading experts on PBMs, said there is little reason to believe financial incentives are not a consideration in the formulary makeup.
"If another manufacturer comes along and says I'll give you a bigger rebate if you make us a preferred drug on your formulary, then the PBMs will do that," Morgan said.
On independently auditing for a PBM client, Morgan said, "[w]e were able to show over and over again all the games that they played to manipulate the data."
But Express Scripts sees things differently.
"If we were truly taking advantage of [employers], it would be counter intuitive that our business would have grown more," Miller said.
Joshua Cohen, a senior research fellow for the Tufts Center for the Study of Drug Development, said while he couldn't classify the ties between drug manufacturers and PBMs as a conflict of interest, he does note a lack of transparency.
"The problem," he adds, "is we are not sure how evidence-based the process is. "Therefore we do not know if the goals are being reconciled efficiently and properly.
Over the years, there have been several legislative efforts on both the state and federal level to require PBMs to increase their transparency. A provision in the 2010 federal healthcare law requires PBMs to disclose how much of these rebates and discounts are passed on to the plan and how much is retained. In Missouri, several efforts to do the same have all been met with little success.
"When you have profits of $7 billion a year and you're in a complex market, you can spend a lot of money on lobbyists to make the state-regulated process as complicated as possible," Balto said.
This complexity, according to the Missouri Pharmacy Association's Ron Fitzwater, makes proving connections between PBMs and drug manufacturers difficult to find.
"[When] you look at the fact that there's so much data that can prove your point but it's behind the scenes, it's not transparent to the system. It's difficult to just go in with anecdotal stories and say this is what's going on in the marketplace," Fitzwater said.
But Charles Cote, a spokesperson for the Pharmaceutical Care Management Association--a national association representing PBMs--said PBMs will save payers about $2 trillion over the next year alone. Insurance companies wouldn't continue to hire PBMS if they were concerned with a lack of transparency in drug pricing, he said.
"In this economy, payers are looking for discounts, they're looking for savings, they're looking for ways to stretch the dollar, and that's why they hire PBMs," Cote said.
Caught in the Middle
Kyle Nichols, a pharmacist at Whaley's Pharmacy in Jefferson City, said the blame for the drug switches is often placed on the pharmacists, when in reality, Nichols said his hands are tied when it comes to negotiating with the PBM for the original drug.
At Whaley's Pharmacy, Nichols said he often sees patients put in the position of choosing the original drug at a premium, or a cheaper alternative.
"The issue is rarely 'Did you cause some harm by them not getting this medication or switching it to the other one?' It is 'Did they live the quality of life they could have for the last five years?' And that's something you just can't measure," Nichols said.
But Express Scripts stressed that often times, a patient can get the same clinical outcomes from a lower cost drug.
"Sometimes when you try to save money and the patient fails, it doesn't result in cheaper care. The best care is often, really, the cheapest," Miller said.
And for others, like Joyce, a simple drug switch for a cheaper drug can be much more serious.
"They took me from well to sick and then wouldn't let me get well," Joyce said.