A prescription-drug provider says it can thrive even as it helps drive down health-care costs. An interview with Richard Rubino, CFO, Medco Health Solutions Inc.
Alix Stuart, CFO Magazine
June 1, 2010
The clients for PBMs are insurance companies, not patients. PBMs and insurance companies (it is hard to distribute the iniquity) have pushed back prescription medicine to the 1970's. Patients are put on generics, even if there is a good reason for them to use tradename. Using a generic is imperative once it is approved. Approval of a generic is dependent only on pharmacokinetic studies. So, if you have epilepsy and need an antiepileptic where the drug level needs to be kept within a certain range, your PBM will put you on generics ("we get higher margins on generics"). It's common for instance, for me to write for a tradename. The PBM faxes back a form requesting I prescribe generic. Now, there's a damn good reason I wrote for tradename, the patient wants tradename, the insurance approves tradename, what the heck is the problem? Well, PBMs get higher margins on generics. They hope that their little fax will be put in a tall pile of paperwork that I am required to do, and that I will sign their damn form without noticing what I am doing. I have patients with dementia. They get prescribed a medicine, a generic, with say, a $40/month copay. They have Medicare D, so the PBM charges who knows what as retail price, which rockets the poor demented patient towards his doughnut hole. But, the patient could get the medicine from a pharmacy for $4/month total, retail, and it isn't rocketing the patient towards his doughnut hole. Does the PBM fax me about this? Well, I have NEVER received a fax from a PBM. This would be a great service for patients, but PATIENTS ARE NOT THEIR CLIENTS. Unless I pick this up, the PBM gets their higher margin. PBMs HAVE TO REIMBURSE PHARMACIES FOR SHORT COURSES OF MEDICINES. This is because it takes PBMs at least 2 weeks to get medicines to people. So it was legally safe for the CFO to talk about the coumadin disaster because it could not have involved their company. Whether what the guy said was true or not, who knows? Can a PBM get medicine to patients quickly? Probably, but why do it? PATIENTS ARE NOT THEIR CLIENTS. I see patients with parkinson's. Many insurances insist now that patients first try an anticholinergic, then Sinemet. They may not allow Sinemet CR (although it's available as a generic, it's more expensive). Let's say the patient has dementia and parkinson, a common combination. Well, the patient has to try the anticholinergic first, get confused. Then try go to Sinemet, which has to be taken on a strict schedule because it should be taken on an empty stomach. OK, you could say the insurance company insists on this, and the PBMs have to do it. This however does not speak highly of the PBMs ethics. I think that interview with the CFO was extremely misleading. If he does that with interviews, what's he doing with the financials?
Posted by Bradley Evans | July 15, 2010 01:28 pm
Interesting interview. I believe there is another place where personalized medicine will drive down costs not mentioned in this article. The start up I am involved in (www.dynemobiosystems.com) is currently involved with aiding big pharmaceutical companies by stratifying their patients during clinical trials. Given that the vast majority of scientific expenditures during drug development are spent on trials and that the vast majority of these trials fail, we are hoping to "rescue" the failed trials that did not meet efficacy standards by narrowing the right patients for the right therapy and therefore be able to reach the market. As such we hope that this will drive down the costs of all therapies as more therapies will be approved and thus the burden of making up the costs of the failed trials will be spread over more drugs.
Posted by Ian Taylor | June 11, 2010 06:54 am© CFO Publishing Corporation 2009. All rights reserved.