Fireside Chat Retreat in New Haven, CT Tackles Pressing Public Health Issues

By: Brandon M. Macsata, CEO, ADAP Advocacy

ADAP Advocacy hosted its Health Fireside Chat retreat in New Haven, Connecticut among key stakeholder groups to discuss pertinent public health issues facing patients in the United States. The Health Fireside Chat convened Thursday, September 5th through Saturday, September 7th. An analysis of the negative impact pharmacy benefit managers (PBMs) are having on the nation's drug supply chain, how state prescription drug "affordability" boards (PDABs) are threatening to undermine the 'Ending the HIV Epidemic' initiative, and the explosive growth in executive compensation among Covered Entities participating in the 340B Drug Pricing Program were each evaluated and discussed by the 31 diverse stakeholders.

Photo Source: Getty Images

The Health Fireside Chat kicked-off with a stakeholders reception. The retreat also featured three moderated white-board style discussion sessions on the following issues:

• Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients — moderated by Shabbir Imber Safdar, Executive Director at Partnership for Safe Medicines (PSM) 
• Prescription Drug Affordability Boards: A Threat to Ending the HIV Epidemic — moderated Jen Laws, President & CEO at Community Access National Network (CANN)
• 340B Greed: Rising Revenues, Rising Executive Compensation, Rising Medical Debt...but Lower Charity Care — moderated by Brandon M. Macsata, CEO at ADAP Advocacy & Marcus J. Hopkins, Executive Director, Appalachian Learning Initiative (APPLI)

The discussion sessions were designed to capture key observations, suggestions, and thoughts about how best to address the challenges being discussed at the Health Fireside Chat. The following represents the attendees:

• Tez Anderson, Executive Director, Let's Kick ASS (AIDS Survivor Syndrome)
• Guy Anthony, President & Founder, Black, Gifted & Whole Foundation
• Ninya Bostic, National Policy and Advocacy Director, IDV, Johnson & Johnson
• Erin Bradshaw, EVP, Advancement of Patient Services & Navigation, Patient Advocate Fndn.
• Caleb Brown, Patient Advocate, and Research Associate, Yale University 
• De’Shea Coney, Vaccine Access and Equity Coordinator, Iowa Department of Health
• Brady Etzkorn-Morris, Patient Advocate
• Earl Fowlkes, President & CEO, Center for Black Equity — unable to attend
• Vanessa Gannon, Head, Issue Advocacy, Genentech — unable to attend
• Alexander Garbera, Member, New Haven Mayor’s Task Force on AIDS, City of New Haven, CT
• Dusty Garner, Patient Advocate
• Kelsey Haddow, Patient Engagement, Rare Access Action Project (RAAP) 
• Marcus J. Hopkins, Founder & Executive Director, Appalachian Learning Initiative
• Lisa Johnson-Lett, Peer Support Specialist, AIDS Alabama
• Ben Kelly, Senior Vice President of Pharmacy Management, Maxor National Pharmacy Services — unable to attend
• Jax Kelly, President, Let's Kick ASS (AIDS Survivor Syndrome) Palm Springs
• Karen King, Harm Reduction Specialist
• Kamaria Laffrey, Co-Executive Director, The SERO Project
• Jen Laws, President & CEO, Community Access National Network
• Kevin Lish, Patient Advocate, and Finance Director, SERO Project
• Brandon M. Macsata, CEO, ADAP Advocacy
• Judith Montenegro, Program Director, Latino Commission on AIDS
• Steve Novis, Director, Community Alliances & Government Relations, ViiV Healthcare
• Warren O'Meara-Dates, Founder & CEO, The 6:52 Project Foundation — unable to attend
• David Pable, Patient Advocate
• Kalvin Pugh, Patient Advocate
• Shabbir Imber Safdar, Executive Director, Partnership for Safe Medicines
• Dmitri Siegel, Alliance Development Director, Bristol-Myers Squibb
• Ranier Simons, Policy Consultant, Community Access National Network
• Jonathan Sosa, Patient Advocate
• Robert Suttle, Patient Advocate
• Nicole Tomassetti, Government Affairs Associate, Capitol Strategies Group
• Jeremy Toney, Patient Advocate, and Research Coordinator, Henry Ford Health
• Denise Tucker, Executive Director, State Policy, Merck
• Olivier Viel, Associate Director, Policy & Government Affairs, Merck

ADAP Advocacy is pleased to share the following brief recap of the Health Fireside Chat.

Pharmacy Benefit Managers:

The first policy session was Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients, which was led by the Partnership for Safe Medicine's (PSM) Executive Director, Shabbir Imber Safdar. PSM is committed to the safety of prescription drugs and protecting consumers against counterfeit, substandard or otherwise unsafe medicines. Shabbir shared some general background on PBMs, and what they have to do with the cost of medicines. In doing so, Shabbir also dissected the role PBMs play in the cost a pharmacy pays for and gets reimbursed for medicine they dispense you? Using several attendees as props, attendees witnessed how pharmacies often lose money on filling high-cost prescriptions, as well as how patients unknowingly put other patients at risk by selling their prescriptions to criminal counterfeiter rings pretending to be "Buyers Clubs" trying to help patients. The discussion also did a deep dive on online pharmacy-only marketplaces, and how these criminal rings get these diverted and counterfeit medicine.

Earlier this year, PSM published a report unveiling how criminal entities exploit vulnerabilities in the supply chain, made worse by PBMs, whose reimbursement policies often leave pharmacies on the edge of financial viability. According to that report, "Over the past decade, PBMs have been cutting the reimbursements pharmacies receive for the medicine they dispense to insured patients into smaller and smaller amounts. In many places, those reimbursements don’t fully cover the acquisition cost of medicine. Pharmacies now routinely dispense medication that they lose money on."

The discussion also largely centered around how the problem is being exacerbated by these criminal rings are using dating apps, such as Grindr, to targeted unsuspecting patients. Earlier this year, ADAP Advocacy, in collaboration with PSM, issued an important safety alert warning Grindr's users to stop selling their HIV and other medications on the popular gay dating App. Medicine buyback schemes falsely claim to be "Buyers Clubs" making medicine available to people who cannot afford them. In reality criminals buy medicine, and sometimes empty bottles, from patients and sell them at a discount to unsuspecting pharmacies who dispense it to patient victims. The safety alert urged Grindr's users to be more mindful of patient safety.

The following materials were shared with retreat attendees:

• To understand the PBM problem, read: "Are below cost reimbursement practices by Pharmacy Benefit Managers creating opportunity for criminals to enter the legitimate supply chain?" (PSM article, handout, and video)
• To understand why pharmacists are looking for bargains, read the story of pharmacist Jackie Weaver in: "Drugmaker Gilead Alleges Counterfeiting Ring Sold Its HIV Drugs" (WSJ)
• To understand how criminals operate in this space, watch: "Fraud in a bottle: How Big Pharma takes on criminals who make millions off counterfeit drugs" (CNBC)
• To see a recent example of this ongoing problem, read: "Gilead Sciences alleges dangerous drug-counterfeiting operation at two NYC pharmacies in lawsuit"

Prosecutions (DOJ) and other resources:

• "Leader of Black-Market HIV Medication Fraud Scheme Pleads Guilty"
• "United States v. Lazaro Hernandez"
• "Man Sentenced for Illegally Distribution Over $16M of Adulterated HIV Medication"
• "Safe Chain owners indicted for counterfeit drug scheme"
• "Safe Chain Settles Unsafe Med Case" (PSM Video)

ADAP Advocacy would like to publicly acknowledge and thank Shabbir for facilitating this important discussion.

PDABs:

The discussion, Prescription Drug Affordability Boards: A Threat to Ending the HIV Epidemic, was led by the Community Access National Network's (CANN) President & CEO Jen Laws. CANN focuses on public policy issues relating to HIV/AIDS and viral hepatitis. Previously characterizing PDABs as "price control wolves in sheep's clothing", Jen once again stressed the potential dangers behind these entities making potentially life and death decisions without having all of the facts and real-world implications of how those decisions could adversely impact patient care. Aside from cancer drugs, antiretroviral therapies for HIV are disproportionally being targeted by PDABs in numerous states. The mechanism being eyed by these boards to "control" drug costs is what is known as the Upper Payment Limit (UPL), which is the maximum reimbursement rate above which purchasers throughout the state may not pay for prescription drug products.

Photo Source: CANN

Earlier this year, CANN untangled the warnings and concerns regarding PDABs. On the surface, they are presented as a simple solution to a complex issue. As further background, Jen pointed to an analysis done by CANN's State Policy Consultant, Ranier Simons, in which he summarized: "The complex problem is the extremely high healthcare expenditure in the United States. Accessing modern healthcare results in high amounts of spending from costs associated with hospitals and other facilities, medical technology creation and utilization, and even prescription drugs. Although prescription drug expenditures are only a small part of the billions spent annually on healthcare, the price of prescriptions is the low-hanging fruit that PDABs aim to attack. The money patients pay for prescription drugs is assuredly a financial burden for many. However, while PDABs aim to expressly lower the direct cost of prescription drugs for patients, their trajectory does not achieve that goal. Their actions have the potential to cause access issues in addition to potentially increasing out-of-pocket costs to consumers. This is especially true since the primary means PDABs lean toward to lower costs is the upper payment limit. Moreover, while CANN has a focus on PDAB potential outcomes regarding HIV drugs, all drugs are of concern, given that people living with HIV (PLWH) have multiple co-morbidities. Any threat to any drug utilized by vulnerable chronic disease communities is a threat to all."  

Jen walked attendees through how 340B rebates, often the lifeline for smaller, community-based providers, could be drastically reduced as a result of the "affordability determinations" being made by PDABs. He noted how CANN has routinely pushed back against the fast-paced approach in some states to rush into making affordability determinations, including submitting testimony to the PDABs in both Colorado and Maryland. Jen outlined why UPL adjustments won’t address patient access or affordability, nor will is save patients a dime. He demonstrated his point with a fictitious provider and the 340B rebates it would receive under current law, as compared to the amount after UPL adjustments. Most providers would be forced to cut services, layoff staff, and potentially cease operations.

The following materials were shared with retreat attendees: 

• NASHP Model State Legislation
• CANN PDABs Action Center
• Health Plans Predict: Implementing Upper Payment Limits May Alter Formularies And Benefit Design But Won’t Reduce Patient Costs
• NMQF Webinar: State Prescription Drug Affordability Boards & Health Equity
• NMQF: 340B As a Health Equity Tool 
• Ripple Effect: How PBMs and Counterfeit Drugs Threaten Patients
• Prescription drug affordability boards do more harm than good

ADAP Advocacy would like to publicly acknowledge and thank Jen for facilitating this important discussion.

340B:

Marcus J. Hopkins, Founder & Executive Director, Appalachian Learning Initiative, concluded the retreat with a discussion focused on the 340B Drug Pricing Program and its potential impacts on the annual revenues and executive compensation amounts at Covered Entities that are eligible to receive rebates from the program, as well as the provision of charity care at cost by hospital entities who qualify. There has been an exponential increase in the number of Covered Entities from 1992 to 2021, increasing from just ~1,000 entities in 1992 to over 50,000 in 2021 (increasing from 12,700 in 2020 as a result of relaxed standards and enforcement due to the COVID-19 pandemic), which Jen Laws, President & CEO of the Community Access National Network, explained, along with additional insights from other attendees with professional knowledge of the program, that the first major increase that occurred in 2010 happened because the Health Resources Services Administration (HRSA)—the federal agency in charge of administering the program—lifted the cap on the number of contract pharmacies with which covered entities could provide medications. This decision essentially allowed organizations that did not have an on-site pharmacy to contract with external pharmacies to provide their services either at another in-person location or via mail delivery, which was becoming a more popular way to provide medications in the late-2000s and early-2010s.

The discussion brought attention to many of the barriers encountered when attempting to access information about 340B revenues from Covered Entities other than those that qualified as an AIDS Drug Assistance Program (ADAP) entity, including (but not limited to):

• The total lack of transparency required by HRSA for non-ADAP covered entities to disclose the amount of revenues received from the program or how those revenues are utilized;
• The numerous methods through which hospitals are able to legally create multiple other legal entities to shift funds, profits, and losses away from the primary hospital, and;
• The ability of hospitals to purchase other hospitals and private practices and counting those purchases as both revenues increases and losses on separate line items in the federal and state tax filings.

This brought up the issue of vertical integration—the practice of a company purchasing and controlling different stages within a chain of goods or services. For example, large hospital systems across the United States have spent much of the last two decades purchasing regional hospitals, local private practices, and private pharmacies, essentially making themselves the largest single employers in many states. This benefits the hospital system by increasing their revenues through ensuring that they are essentially the only providers of healthcare services and medications in a region. This allows them to absorb the 340B revenues from many of these entities, as each entity they purchase (known as "child sites") then fall under their 340B eligibility. Major hospital systems, such as Bon Secours Mercy Health based in Virginia, have been accused of using 340B revenues (which are supposed to be utilized to increase the availability and affordability of care for lower-income patients) to open new locations in more affluent areas in order to decrease the amount of uncompensated care and increase the amount of paid services, further driving up annual revenues.

Questions centered around how ADAP Advocacy (and CANN) can better elucidate abuses in the 340B program by hospital entities and mega service providers, but also highlighting good faith actors—Covered Entities who are using the program as it was intended to be used—in order to better compare and contrast the difference between Covered Entities.

The following materials were shared with retreat attendees:

• The 340B Drug Pricing Program and its Potential Impacts on Annual Revenues, Executive Compensation, and Charity Care Provision in Eligible Covered Entities
• For 340B hospitals, financial strength does not translate into charity care
• Reforming 340B to serve the interests of patients, not institutions
• What Should a Compliance Officer Do About 340B These Days? Journal of Health Care Compliance
• Public hospitals may use the 340B program differently than nonprofit hospitals
• Access to the 340B Drug Pricing Program: is there evidence of strategic hospital behavior?
• US hospital service availability and new 340B program participation

ADAP Advocacy would like to publicly acknowledge and thank Marcus for facilitating this important discussion.

Additional Fireside Chats are planned for 2024 in New York City (December).

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

Fraudsters Target Medicine being Reimbursed at a Loss for Counterfeit Crime

By: Ranier Simons, ADAP Blog Guest Contributor

Pharmacy Benefit Managers (PBMs) don’t make medicine or dispense medicine, but their business decisions determine what medicines you have access to. Some of those decisions are now creating openings for drug counterfeiters to enter the legitimate supply chain, according to a report by the Partnership for Safe Medicines (PSM) and subsequent analysis by the Community Access National Network (CANN). This is a pressing matter because counterfeit drugs can result in adverse side effects, treatment failure, resistance, toxicity, and death.[1]

Photo Source: Center for Medical Economics & Innovation

The U.S. market value for PBMs in 2023 was $523.9 billion.[2] PBMs have always been marketed to reduce drug expenditures for payers and lower drug costs for patients, but historically, that has not happened. The $523 billion results from questionable practices that bring in sizable profits for PBMs while shortchanging insurance payers with opaque contracts and to the detriment of patients.  Some patient advocacy groups have argued PBMs are harmful to patients’ health. One common PBM practice, below-cost pharmacy reimbursement, creates supply chain contamination opportunities.

Insurance companies reimburse pharmacies for the medications they dispense to patients. A pharmacy purchases medication from a wholesaler and then submits a claim to a patient’s insurance to be paid for the medication. PBMs handle the payments to the pharmacies on behalf of insurance companies. In 2023, 332 million people in the U.S. had health insurance, and 275 million of them were served by Pharmacy Benefit Managers (PBMs) via commercial insurance, Medicare Part D, Managed Medicaid, and Medicaid Fee-For-Service.[3] Thus, pharmacies are forced to deal with PBMs. In order to dispense medications to patients with insurance, pharmacies must sign contracts with PBMs that are agreements to accept whatever price the PBM dictates for reimbursement. Currently, three PBMs control 75% of the health insurance market; thus, there is no competition.[4] 

The predicament is that PBMs are reimbursing pharmacies below cost. This means that PBMs are paying pharmacies less money than the pharmacies spent to acquire the drugs. Effectively, pharmacies are dispensing drugs at a loss to serve patients. A real-world example of one of the big three PBMs' contracts with a pharmacy for brand-name drugs listed reimbursement of the average wholesale price (AWP) minus 25.5% + $0.00. The same contract listed AWP minus 57% + $0.00 for generics. 

The following examples are actual claims submitted by pharmacies and their resulting losses based on the PBM contracts. For Biktarvy, a pharmacy acquired a 30-day wholesale supply of the drug for $3700.36, but the PBM only reimbursed $3661.75, resulting in a loss of $38.61. For Genvoya, a pharmacy paid $3,534.78 and was only reimbursed $2,852.92, resulting in a loss of $681.86. A pharmacy in Florida purchased a 30-day supply of roflumilast for $43.86 and was reimbursed by a PBM for $11.22, resulting in a $32.64 loss. PSM has many other examples of losses on other various pharmaceuticals here. 

Photo Source: Partnership for Safe Medicines

The situation is dire, as indicated by a statement given by a pharmacist from an independent pharmacy in Weatherford, Texas: 

“I spent hours on the phone with my wholesaler and even the drug manufacturer trying to explain that we simply cannot sustain such drastic underpayment on this critical medication and every time my concerns fell on deaf ears. After years of trying to affect some kind of change on either the cost or the reimbursement, we simply could not take losses of any kind on a drug that has a price tag of $3000.00. Our losses ranged from $17.46 to $572.30, and we were expected to accept this arrangement from day one. We were a safe haven and trusted health partner for these patients; however, we were forced to notify our patients that we would no longer be able to provide this life-saving medication.”

This pharmacist decided to stop providing the referenced medication. However, all pharmacists do not make that decision, which creates opportunities for criminal exploitation. 

Pharmacists want to do what they can to provide the medicines people need. When they cannot source medications through their prime wholesalers, they turn to the secondary wholesaler market. Secondary wholesalers are also licensed by the state, and many are secure and reputable channels, but this is also where criminals operate. Criminal counterfeiters take advantage of the situation and set up marketplaces for popular, expensive drugs, using black-market diverted or counterfeit products at prices lower than traditional wholesale sources.

Pharmacies do not haphazardly search for and purchase lower-cost medications. They do their due diligence to make sure they are sourcing proper supplies. However, counterfeit criminals have sophisticated and elaborate systems to perpetrate fraud. They sell through companies with legitimate state-issued wholesale licenses and use forged Drug Supply Chain Security Act (DSCSA) transaction tracing histories. A deep dive into the paperwork can reveal the forgery. However, it takes significant resources of time and effort to dig into that kind of tracing. Resources that pharmacies do not have. Thus, when things have the appearance of propriety, pharmacists get duped by criminals, and patients get sold fraudulent medication. 

Photo Source: Partnership for Safe Medicines

In 2022, the U.S. District Court unsealed documents of a civil case in which Gilead Sciences sued a group of criminals. The criminal enterprise distributed over $230 million of counterfeit drugs, some of which were HIV antiretroviral medications.[5] Some of the drugs were diverted, meaning they were purchased from people who had obtained them legitimately and resold on the black market. Some of the drugs were bottles containing medication that did not match what was on the label. Diverted medication indicates that patients were not adhering to their treatment regimens since they were selling their medications. The mislabeled medication bottles meant patients could have been ingesting medications not meant for them, in improper dosages, and possibly contaminated. Situations such as PBM below-cost reimbursement contribute to creating a demand for cheaper medications in an artificially created predatory pricing-induced supply scarcity.

Low PBM reimbursement not only endangers the drug supply chain but also puts independent pharmacies out of business. Pharmacies cannot operate under fiscal loss. In addition to low reimbursement rates, PBMs give pharmacies very low or often zero dispensing fees, which pharmacies need for operating costs. Moreover, PBMs saddle pharmacies with many other opaque fees, audits, and clawbacks, adding to their financial burden. When pharmacies go out of business, patients lose access. This is especially true in areas with very few pharmacies for a large geographical region. If a pharmacy closes, entire communities lose familiar and convenient continuity of care.

A group named Pharmacists United for Truth and Transparency wrote a letter to one of the big three PBMs. A quote from this letter explains what needs to be done: “Reimburse independent pharmacies the full drug acquisition cost and eliminate the practice of reimbursing above some and below other drug costs. Make a fair and universal reimbursement policy the unbreakable operating principle of the PBM-independent pharmacy partnership.” PBM reform is not just fiscally sound; for patients, it indeed could mean the difference between life and death.

[1] Williams, L., McKnight, E. (2014, June 19). The real impact of counterfeit medications. Retrieved from https://www.uspharmacist.com/article/counterfeit-meds#:~:text=The%20use%20of%20substandard%20drugs,enforced%20to%20prevent%20this%20crime

[2] Fortune Business Insights. (2024, April 19). Pharmacy benefit management market. Retrieved from https://www.fortunebusinessinsights.com/pharmacy-benefit-management-pbm-market-103496

[3] Mikulic, M. (2023, May 22). Number of Americans served by PBMs by insurance type 2023. Retrieved from https://www.statista.com/statistics/1172652/pbms-number-of-served-us-persons/

[4] The Partnership for Safe Medicines. (2023) Are below cost reimbursement practices by Pharmacy Benefit Managers creating opportunity for criminals to enter the legitimate supply chain?. Retrieved from https://www.safemedicines.org/2024/02/pbmblackmarket.html

[5] Gilead Sciences, Inc. et al v. Safe Chain Solutions, LLC et al. Retrieved from https://fingfx.thomsonreuters.com/gfx/legaldocs/dwpkrodwdvm/gileand-amended-2022-09-28.pdf?utm_source=Sailthru&utm_medium=newsletter&utm_campaign=daily-docket&utm_term=DailyDocket-MailingList%20v2

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.  

Did South Carolina Just Weaken Patient Choice Protections for Specialty Drugs?

By: Ranier Simons, ADAP Blog Guest Contributor

An undeniable fact with largely universal consensus is that the United States needs healthcare reform. Healthcare reform is an overhauling of the healthcare system to achieve what the Institute for Healthcare Improvement describes as the Triple Aim: “improving the patient experience of care (including quality and satisfaction), improving the health of populations, and reducing the per capita cost of health care.”[1] The Affordable Care Act (ACA) is the most recent attempt to reach the Triple Aim by increasing insurance access, mandating levels of quality, and trying to make healthcare more affordable. The challenge of healthcare reform is that healthcare is a system. By definition, a system has moving components that not only move independently but also are interdependent upon other parts of the system. Regarding healthcare, the moving parts of the system are smaller systems. South Carolina recently attempted to make some positive changes to the healthcare infrastructure in that state, though it is unclear if all the changes will actually benefit patients.

Photo Source: Greenville Legal

It is important to remember that regulation is one tool used to attempt the improvement of the many U.S. healthcare system components. Through legislative regulation, lawmakers try to create frameworks to optimize how various healthcare system component’s function. A significant component of healthcare is prescription medication. Pharmacies, pharmacy benefit managers (PBMs), and insurance plans are several players in the prescription medication system. Presently, the costs and availability of drugs are primarily controlled by PBMs. Insurance companies employ pharmacy benefit managers who control which drugs appear on plan formularies, negotiate the prices insurance plans pay for prescriptions, decide which pharmacies can participate in a plan’s network, and more.[3,5]

While many components within the U.S. healthcare system operate under detailed and enforced regulation, PBMs do not. They are largely unregulated. To maximize their profits, they participate in multiple practices that create challenges for insurance plans, pharmacies, and ultimately patients, driving up costs and creating inefficiencies in patient care.[3,5] South Carolina has been working through legislation to curtail and regulate the activity of PBMs - including Senate Bill 520 (SB520), part of the Pharmacy Audit Protection Act - which was recently passed by the state legislature.[2]

One of many excessive practices by PBMs to drive profit is pharmacy audit. A pharmacist with over 30 years experience providing care to patients living with HIV/AIDS summarized, “Pharmacists are constantly being audited by strong-arm PBMs. They often go after the high-cost drugs and deny claims for minor infractions. It’s a bullying tactic.” SB520 aims to protect pharmacies from unjust audits by PBMs. The bill defines explicitly the structure of what entity can be designated a PBM; it explains what PBMs operationally can and cannot do, defines the rights of pharmacies in general and in the face of a PBM audit, gives patients freedom of choice in utilizing in-network pharmacies, and much more. PBMs use numerous abusive audit practices to drive profit, including audit fees, denying claims for minor clerical errors forcing pharmacies to pay back money for drugs they were reimbursed, and making it difficult for pharmacies to re-bill PBMs after winning audit appeals.

Photo Source: Framework LTC

The bill is essentially a step in the right direction. However, multiple payers lobbied to add verbiage potentially adversely affecting HIV patients and others. Section 38-71-2245, subsection (A) states: “A pharmacy benefits manager may neither limit an insured from selecting an in-network pharmacy or pharmacist of the insured's choice nor deny the right of a pharmacy or pharmacist to participate in a network if the pharmacy or pharmacist meets the requirements for network participation set forth by the pharmacy benefits manager, and the pharmacy or pharmacist agrees to the contract terms, conditions, and rates of reimbursements.”[2]  This section protects patient choice of pharmacists. 

Payers asked for the following verbiage added to the section: 

“Notwithstanding subsection (A), a pharmacy benefits manager may, for specialized delivery drugs, specify requirements for network participation that: (1) directly relate to the ability of the pharmacy or pharmacist to store, handle, or deliver a prescription drug in a manner that ensures the quality, integrity, or safety of the drug, its delivery, or its use; or  (2) relate to quality metrics that affect a pharmacy's or pharmacist's ability to participate, provided that the pharmacy benefits manager applies such terms equally to all network participants. (C) For prescription drugs that qualify as a high-cost prescription drug, subsection (A) of this section does not apply to a pharmacy benefits manager. A high-cost prescription drug is defined as a prescription drug whose current or prior year's annual average wholesale price exceeded 300 percent of the Federal Poverty Level for a single-member household. (D) A pharmacy benefits manager must provide notification of any changes to all applicable specialized delivery drug lists and high-cost prescription drug lists and must make such lists available on a website and upon request to participating pharmacies. A pharmacy may appeal a classification determination to the Department of Insurance.”[2]

The verbiage states that patient choice protections do not apply to specialty or high-cost prescription drugs. In section 38-71-2200, the bill defines specialized delivery drugs as “a prescription drug that meets a majority of the following criteria, as set forth by the manufacturer, FDA, or other applicable law or regulatory body and: (a) requires special handling or storage; (b) requires complex and extended patient education or counseling; (c) requires intensive monitoring; (d) requires clinical oversight; or (e) requires product support services; and the drug is used to treat chronic and complex, or rare medical conditions  (i) that can be progressive; or (ii) that can be debilitating or fatal if left untreated or under-treated.”[2]

Given the broad definition of specialty and high-cost prescription drugs, the bill allows PBMs to manipulate how HIV antiretrovirals and related treatments are filled. The pharmacist consulted on this issue also explains, "It’s a way for PBMs to mandate that these prescriptions need to be filled from their central mail pharmacies. Since most HIV ARVs are oral and do not require special handling, access has commonly been allowed at retail. The high cost is what’s driving this change. Also, most independent pharmacies don’t mind not having to fill these drugs because of the high cost. For HIV-focused pharmacies, these prescriptions and patients will no longer have access to trained pharmacists and relationships with providers… will all go to mail and automation.” 

He further explains that: “In exchange for fewer audits on specialty drugs, since the retail pharmacies won't be filling them anymore, the managed care organizations will allow more access to more regular prescriptions at retail pharmacies, a move that a lot of non-specialty pharmacies like because it allows them to serve more patients. They’re trading away HIV patients for more ‘non-specialty’ patients.”

Photo Source: SNF Solutions

The bill's definition of “specialized delivery” drugs affects other types of drugs as well. Using the example of antibiotics for a UTI for an elderly person, Jen Laws, President & CEO of Community Access National Network (CANN), explains: “Under the requirements set forth, most antibiotics lose efficacy when exposed to high heat, might require education as to contraindications for patients with other co-occurring conditions, will require monitoring for clearance of infection, and these types of infections can be progressive or debilitating in elderly patients. And while this is an extreme example, it is possible under the bill as written. Given payer willingness to abuse carve-outs and loopholes in laws, it's egregious to define ‘specialty’ so broadly, especially as medicine becomes more and more personalized.”

Increased financial burden on HIV patients and providers is another bill outcome. ARVs are not always defined as specialty drugs on formularies, and thus, many times, they are on lower tiers of formularies that only require cost-sharing of fixed lower copays. Since the bill allows PBMs to define all ARVs as specialty drugs, they can move them to higher formulary tiers, which have much higher cost-sharing practices, such as significantly higher copays and coinsurance. This creates a significantly increased out-of-pocket financial burden on patients and covered entities that are covering the 340B patient copay cost.  

Compounding the increased financial burden is the usage of copay accumulators. Patients in the past who used manufacturer copay assistance programs could apply the copay card payments to their insurance deductible and out-of-pocket costs. Presently, many insurers use copay accumulators, which allow the copay assistance programs to pay the copays but do not allow the payments to count towards deductibles or out-of-pocket expense limits. Thus, the insurance companies are essentially being paid twice by requiring the insured to still must pay their deductibles and out-of-pocket limits after exhausting copay assistance cards. Additionally, patients are in danger of being unable to afford their medication since they would be responsible for paying the full price of their medications after the copay assistance was exhausted up until the limits of completely paying their deductibles.[4]

This bill is an example of the challenges of healthcare reform. It is easy for well-intentioned legislation to be tainted by opposing interests. It is imperative to be vigilant about whom we select as legislative representation and stay informed about legislation being written that affects our daily lives.

[1] Institute for Healthcare Improvement. (2023). The IHI Triple Aim. Retrieved from https://www.ihi.org/Engage/Initiatives/TripleAim/Pages/default.aspx

[2] South Carolina State House. (2023). S0520. Retrieved from https://www.scstatehouse.gov/sess125_2023-2024/bills/520.htm

[3] Royce, T., Schenkel, C., Kirkwood, K., Levit, L., Levit, K., Kircher, S. (2020). Impact of pharmacy benefit managers on oncology practices and patients. JCO Oncology Practice 16(5) 276-284. DOI: 10.1200/JOP.19.00606

[4] National Conference of State Legislatures. (2023, February 23). Copayment Adjustment Programs. Retrieved from https://www.ncsl.org/health/copayment-adjustment-programs#:~:text=When%20a%20patient's%20health%20plan,out%2Dof%2Dpocket%20maximums

[5] Healthcare Value Hub. (2018, January). Pharmacy benefit managers: Can they return to their client-centered origins? Retrieved from https://www.healthcarevaluehub.org/advocate-resources/publications/pharmacy-benefit-managers-can-they-return-their-client-centered-origins

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.  

Co-Pay Accumulators are an Extremely Dangerous, Anti-Patient Policy

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

Today's lexicon outside healthcare policy discussions probably doesn't include the words, co-pay accumulators. But that is slowly changing as more and more people encounter what is widely recognized as an extremely anti-patient health insurance policy. Co-pay accumulators amount to nothing more than the greedy health insurance industry (and other payers) making prescription drug coverage less affordable for patients, especially for those living with chronic health conditions such as HIV/AIDS.

The Hepatitis B Foundation defines a copay accumulator (or accumulator adjustment program) as "a strategy used by insurance companies and Pharmacy Benefits Managers (PBMs) that stop manufacturer copay assistance coupons from counting towards two things: 1) the deductible and 2) the maximum out-of-pocket spending."[1]

Last year in the ADAP Blog, guest contributor Marcus J. Hopkins provided an excellent description on these potentially harmful policies: "Essentially, what a co-pay accumulator attempts to do is increase the amount of money consumers pay in order to decrease the amount of money insurers have to pay, once their annual deductible and/or Out-of-Pocket Maximum (OPM) is met. When consumers are allowed to count co-pay assistance cards against their deductible/OPM, they reach those limits sooner, meaning that insurers are then on the hook for every pharmaceutical fill after that date."[2]

Photo Source: Bankrate

Co-pay accumulators are particularly problematic for the HIV community because they rely on specialty drugs, such as anti-retroviral medications. In 2018, Dr. Adam J. Fein with the Drug Channels Institute warned, "Patients today are being asked to pay a significant share of prescription costs for more-expensive specialty drugs, because of high coinsurance amounts."[3]

Unfortunately, increasingly health insurance companies and PBMs have elected to institute co-pay accumulators. Make no mistake about it, but these co-pay accumulators will lead to patients being unable to afford their medication...and that will lead to less medication adherence...and that will lead to higher costs for the entire healthcare system. Our response is simple: It is time to advocate for the patient!

The AIDS Institute recently published an in-depth report, "Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators." According to the report's findings, in 45 states and the District of Columbia, there is at least one plan with a copay accumulator adjustment policy.[4]

For people living with chronic health conditions, such as HIV or viral hepatitis, co-pay accumulators generally pose significant problems for patients. As the report highlights: "With the many crises plaguing our health care system today, this very confusing issue can easily be dismissed. However, for the patients it affects, it simply cannot be ignored. And for those who haven’t experienced a copay accumulator yet, it may only be a matter of time."[5]

The problem for patients is much broader, though. According to the Patient Access Network Foundation (PAN), more than 10 percent of seniors shared that they took on credit card debt to afford prescriptions, while nearly 20 percent of seniors said they reduced spending on everyday purchases, including groceries and transportation.[6]

Photo Source: PAN Foundation

The Biden-Harris Administration recently had the opportunity to pump the brakes on co-pay accumulators, similar to the way they stopped the harmful demonstration project designed to weaken the six protected drug classes under Medicare's Part D. They failed to so, and the patient advocacy community was quick to express its concern.

“We are deeply disappointed that CMS passed on addressing the issue of copay assistance for prescription drugs and requiring insurers and pharmacy benefit managers to count assistance towards patient out-of-pocket cost-sharing and deductibles,” commented Carl Schmid, executive director of the HIV+Hepatitis Policy Institute. “Even before COVID-19, patients were struggling to afford their medications and relied on copay assistance from drug manufacturers. Now, the need is even greater. We know that the Biden-Harris administration wants to improve patient affordability of healthcare, particularly for vulnerable communities; however, they missed a perfect opportunity to demonstrate this commitment.”[7]

In a recent letter, U.S. Representatives A. Donald McEachin (VA-04) and Rodney Davis (IL-13) asked President Biden to halt the Trump Administration's copay accumulator policy ― which was included in the 2021 Notice of Benefit and Payment Parameters (NBPP).[8] It is now left in the hands of the Congress to reverse course on the extremely dangerous, anti-patient policy known as co-pay accumulators. Patient health depends on it!

[1] Hepatitis B Foundation (2020, March 4). Copay Accumulators – What They Are and What They Mean For Your Prescriptions. Retrieved online at https://www.hepb.org/blog/copay-accumulators-mean-prescriptions/#:~:text=A%20copay%20accumulator%20–%20or%20accumulator%20adjustment%20program,the%20deductible%20and%202%29%20the%20maximum%20out-of-pocket%20spending.

[2] Marcus J. Hopkins (2020, July 16). CMS Co-Pay Accumulator Rule Aims to Increase Consumer Costs. The ADAP Blog. ADAP Advocacy Association. Retrieved online at https://adapadvocacyassociation.blogspot.com/2020/07/cms-co-pay-accumulator-rule-aims-to.html.

[3] Adam J. Fein, Ph.D. (2018, January 3). Copay Accumulators: Costly Consequences of a New Cost-Shifting Pharmacy Benefit. Drug Channels. Retrieved online at https://www.drugchannels.net/2018/01/copay-accumulators-costly-consequences.html.

[4] The AIDS Institute (March 2021). Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators. Retrieved online at https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.

[5] The AIDS Institute (March 2021). Double Dipping: Insurance Companies Profit at Patients' Expense - An Updated Report on Copay Accumulators. Retrieved online at https://aidsinstitute.net/documents/2021_TAI_Double-Dipping_Final-031621.pdf.

[6] Amy Niles (2021, April 19). Morning Consult survey: high out-of-pocket costs causing concern for seniors. PAN Foundation. Retrieved online at https://www.panfoundation.org/high-out-of-pocket-costs-causing-concern-for-seniors/. 

[7] Carl Schmid (2021, April 30). Biden Administration Passes on Protecting Patient Affordability of Medications. HIV+Hepatitis Policy Institute. Retrieved online at https://hivhep.org/press-releases/biden-administration-passes-on-protecting-patient-affordability-of-medications/.  

[8] The Honorable A. Donald McEachin (2021, March 22). McEachin Leads Bipartisan Letter Asking President Biden to Reverse Previous Administration’s Copay Accumulator Policy. The Office of U.S. Representative A. Donald McEachin (VA-04). Retrieved online at https://mceachin.house.gov/media/press-releases/mceachin-leads-bipartisan-letter-asking-president-biden-reverse-previous.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

It Is Time to Advocate for the Patient

By: Brandon M. Macsata, CEO, ADAP Advocacy Association

       Jeffrey R. Lewis, President & CEO, Legacy Health Endowment 

       (The views expressed are his own)

Republicans and Democrats used to boast about protecting people from having to use hospital emergency rooms unnecessarily.  Both parties rallied around the flagpole, trying to demonstrate who cared more. In the end, empty promises.

Before leaving office, the Trump administration decided to throw a large bone to the health insurance industry and their partners in this caper, pharmacy benefit managers (PBMs). The solid gold bone allows health insurers and PBMs to exclude medications that a patient receives through pharmaceutical manufacturer patient assistance programs (PAPs) from counting against their deductible and maximum out-of-pocket amount, otherwise known as copay accumulator programs.

Photo Source: Daily Caring

Many pharmaceutical companies offer PAPs and Copay cards, covering all or part of medication expenses to enable patients to be able to afford medications. These programs are used by millions of Americans who suffer from one or more chronic disease conditions. Cancer patients, for example, need PAPs because the cost of their overall care is so expensive, and the medications they take often do not have a generic equivalent. 

Historically, the value of a PAP or copay card was counted toward an individual's health insurance policy deductible. Most people are familiar with paying a deductible as part of their medical and prescription drug coverage. Once the deductible is met, a larger portion of their medical expenses is paid for by the insurer. With the advent and expansion of high deductible health plans (HDHPs), individuals may face deductibles of at least $1400/year and up to $6900/year for total annual out-of-pocket expenses.

Guy Anthony of Brooklyn, N.Y., lives with HIV and bipolar disorder and relies heavily on the manufacturer's copay assistance program to afford his Genvoya® medication to treat his HIV. He describes his situation in simple terms: "I'm not rich, and most people living with co-morbidities aren't either. My grandmother takes close to 10 different medications, and this new policy is making it hard for her to live."

Why? Because as insurance companies and PBMs expand the use of copay accumulators and watch their profits and stock price increase, Guy's assistance is reduced and he and patients like him end up increasing their out-of-pocket expenses to meet their deductibles. And his grandmother's health is threatened by the Trump Rule. 

The pharmaceutical company programs were created to help people like Guy and his grandmother.  Restrictions like the Trump Rule result in reduced medication adherence, poorer health outcomes, and ultimately, higher healthcare costs. When cost-containment such as Copay Accumulator Programs negatively impact prescription compliance, it is the patient who suffers.

A recent West Health-Gallup survey underscored the importance of what happens under the Trump Rule: In the last year, tens of millions of Americans said they were forced to cut back on necessities like food (12%) and utilities (9%) to pay for basic healthcare. Nearly 30% found paying for general healthcare a significant financial burden, behind housing (51%), taxes (48%), and food (41%). Costs for prescription drugs are a substantial financial burden for more than one in five adults (22%). More than half (52%) of all Americans also said they are either "worried" or "very worried" that a health event will wipe out their savings.

The Biden Administration can be an advocate for the patient. All it takes is an Executive Order issued by President Biden to eliminate the Trump Rule. And every day that Congress and the Biden Administration delay, they become Trump High Healthcare Cost co-conspirators.

This opinion piece was also published in the April 12th edition of the Cision PR Newswire.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.

Rx Drug Coupon Concerns Pit Prices Against Patients

Guest Blog By: Marcus J. Hopkins, Blogger

Drug manufacturer coupons have increasingly become a popular method of reducing the price consumers pay for their medications. Insurers, Pharmacy Benefits Managers (PBMs), and other payors, however, argue that these cost saving tools actually drive prices upward and result in patients choosing expensive brand name drugs over less expensive generic alternatives, essentially costing the payors more money, in the long run. As a result, some payors are taking the extraordinary step of no longer counting drug coupons toward patients’ out-of-pocket costs and deductibles, meaning that once patients use a coupon, they’ll be left to pay the remaining cost of the drug out-of-pocket.

When looking at how and when these coupons are used, however, Health Affairs = a leading journal in health policy thought and research – found that just 21% of coupons used in the 200 highest expenditure drugs of 2014 had a direct generic substitute, while another 28% had an “imperfect substitute.” The remaining 51% of drug had either no generic substitute or only branded alternatives (Van Nuys et al., 2018).

For patients living with HIV (and, more recently, Hepatitis C), the past decade has been revolutionary in terms of the medications that have been made available to treat the disease. In 2007, most patients began treatment using a two- or three-pill regimen with various storage requirements. A year earlier, the first single-pill regimen, Atripla (Gilead), was approved by the FDA for the treatment of HIV.  In 2017, virtually patients begin HIV treatment with a single-pill regimen. The sad reality, however, is that there are no generic substitutes available in the United States for HIV drugs, and manufacturer coupons that reduce co-pays for them play a vital role in determining whether or not patients can afford the lifesaving medications they need.

“Consumers with life-threatening conditions are caught in the crossfire of an ongoing battle between insurers and drug companies over drug pricing. No matter who wins the battle, the casualties will be the patients, taxpayers, and the general public,” says Eddie Hamilton of the Columbus, Ohio-based ADAP Educational Initiative.

Photo Source: Consumer Reports

He is correct. In the rush to lower expenditures in the post-Affordable Care Act (ACA) market, insurers have increasingly begun weaponizing their drug formularies – the list of drugs payors will cover and for how much – against manufacturers to force lower pricing agreements, all of which are confidential under existing Trade Secrets laws. Placing brand name drugs in higher-cost tiers has been a relatively ineffective weapon when it comes to lowering overall prices, but has been an effective barrier to treatment for many patients living with HIV and other chronic illnesses for which there are few, if any, generic and/or effective alternatives.

This latest salvo against drug manufacturers will ultimately end up hurting consumers more than it will lower expenditures for insurers.

Disclaimer: Guest blogs do not necessarily reflect the views of the ADAP Advocacy Association, but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about public health-related issues and updates.