Are drug store chains & insurance companies ripping you off?


Just when you think you’ve heard it all regarding pharmas, your neighborhood pharmacy starts buying up insurance companies and they require you to buy your RX from who? You got it.

According to the Charolotte Observer,

Charlotte retirees Max and Jan Hauser and their pharmacist, Jesse Pike, will speak before Federal Trade Commission officials in Washington today to complain about prescription drug charges by one of the nation’s largest drugstore chains.

Their complaint isn’t only about competition between pharmacies. It’s about how much senior citizens could end up paying for prescription drugs under the confusing and complex Medicare Part D program.

The Hausers, both over 65 and on Medicare, used to get their medicines from Pike’s Pharmacy, an independent drugstore in east Charlotte.

In January, they switched their prescription drug plan, and in March they started going to CVS at the suggestion of their new insurer.

They soon noticed that the new insurance plan, which is owned by CVS, pays the chain drugstore more for drugs than it paid Pike’s.

The disparity is not only unfair to Pike’s, the Hausers say. It will also end up costing millions of senior citizens more because it will put them in the so-called “doughnut hole” much faster.

How does the doughnut hole work?

That’s the point at which seniors enrolled in Medicare Part D have purchased prescription drugs worth a certain amount of money – $2,700 is common. Then, the insurer temporarily stops paying any of the cost until a catastrophic cap is reached. While in that “doughnut hole,” seniors pay 100 percent of their drug costs instead of small co-payments.

Should pharmacies be allowed to own insurance companies?

The meeting was arranged by the National Community Pharmacists Association, which represents 25,000 independent pharmacists. The group has complained that the FTC’s decision to allow CVS to buy Caremark, and later RxAmerica, set up the potential for CVS to have an “unfair advantage” over other pharmacies.

CVS Caremark disagrees with that characterization of its business practices

Are they trying to make it harder for patients so they’ll comply with the highter payments?

In past years, Pike had filed their insurance claims electronically, so they didn’t have to pay co-pays out of pocket or do other paperwork themselves. But in January, when Pike tried to file with Caremark, which administers Max Hauser’s supplemental insurance policy, it would not go through. So Hauser called Caremark and was told to start getting prescriptions filled at CVS to get the electronic filing option.

How much difference are we talking about here?

For example, when Pike filled Max Hauser’s prescription for omeprazole, a generic drug for ulcers, in January and February, Pike’s received $4.77 from RxAmerica for each 30-day supply, and Caremark reimbursed the Hausers for a $5 co-pay, for a total of $9.77 for a month’s supply.

In March, when the Hausers took their prescriptions to CVS, RxAmerica paid the chain drugstore $62.59 for the same 30-day supply of omeprazole. Caremark paid the Hausers’ $5 co-pay, for a total of $67.59 for the month’s supply.

CVS got $57.82 more for omeprazole than Pike’s Pharmacy.

In another example, CVS received $165.99 for a 90-day supply of simvastatin, a generic cholesterol medicine, from RxAmerica, and a $15 co-pay from Caremark. Pike’s Pharmacy filled a 30-day prescription and received only a $4.70 co-pay from Hauser and nothing from RxAmerica.

The difference in charges put Max Hauser that much closer to the so-called “doughnut hole.”

Maybe it was just one patient.

Max and Jan Hauser used to get their drugs at Pike’s Pharmacy. Then their new insurer suggested they go to CVS, which they say gets paid far more for the same drugs.

Charlotte retirees Max and Jan Hauser and their pharmacist, Jesse Pike, will speak before Federal Trade Commission officials in Washington today to complain about prescription drug charges by one of the nation’s largest drugstore chains.

Their complaint isn’t only about competition between pharmacies. It’s about how much senior citizens could end up paying for prescription drugs under the confusing and complex Medicare Part D program.

The Hausers, both over 65 and on Medicare, used to get their medicines from Pike’s Pharmacy, an independent drugstore in east Charlotte.

In January, they switched their prescription drug plan, and in March they started going to CVS at the suggestion of their new insurer.

They soon noticed that the new insurance plan, which is owned by CVS, pays the chain drugstore more for drugs than it paid Pike’s.

The disparity is not only unfair to Pike’s, the Hausers say. It will also end up costing millions of senior citizens more because it will put them in the so-called “doughnut hole” much faster.

That’s the point at which seniors enrolled in Medicare Part D have purchased prescription drugs worth a certain amount of money – $2,700 is common. Then, the insurer temporarily stops paying any of the cost until a catastrophic cap is reached. While in that “doughnut hole,” seniors pay 100 percent of their drug costs instead of small co-payments.

The Hausers and Pike, longtime owner of Pike’s Pharmacy, are among about 80 pharmacists and patients who will bring their concerns about CVS to FTC Chairman Jon Leibowitz in a private meeting today.

The meeting was arranged by the National Community Pharmacists Association, which represents 25,000 independent pharmacists. The group has complained that the FTC’s decision to allow CVS to buy Caremark, and later RxAmerica, set up the potential for CVS to have an “unfair advantage” over other pharmacies.

Of course, CVS and other chains have a right to defend themselves in this just as in any other situation. Their spokespeople are doing just that.

CVS Caremark disagrees with that characterization of its business practices.

In e-mails, Christine Cramer, a spokeswoman for the Rhode Island-based company, said the merger of CVS and Caremark makes “pharmacy health care more accessible, more effective and more affordable. Our integrated … operations provide greater choice and more convenience for patients” and lead to “lower overall health care costs for plan sponsors and participants.”

She said participants in RxAmerica plans, such as the Hausers, may choose from any pharmacy in the network, including Pike’s, in the Charlotte area.

Shocked by differences

The Hausers knew they always had that choice.

In past years, Pike had filed their insurance claims electronically, so they didn’t have to pay co-pays out of pocket or do other paperwork themselves. But in January, when Pike tried to file with Caremark, which administers Max Hauser’s supplemental insurance policy, it would not go through. So Hauser called Caremark and was told to start getting prescriptions filled at CVS to get the electronic filing option.

In March, when the Hausers received reports of their drug expenses from RxAmerica, their primary prescription drug plan, they were shocked to see the difference between reimbursements to Pike’s and CVS.

How much difference are we talking about here?

For example, when Pike filled Max Hauser’s prescription for omeprazole, a generic drug for ulcers, in January and February, Pike’s received $4.77 from RxAmerica for each 30-day supply, and Caremark reimbursed the Hausers for a $5 co-pay, for a total of $9.77 for a month’s supply.

In March, when the Hausers took their prescriptions to CVS, RxAmerica paid the chain drugstore $62.59 for the same 30-day supply of omeprazole. Caremark paid the Hausers’ $5 co-pay, for a total of $67.59 for the month’s supply.

CVS got $57.82 more for omeprazole than Pike’s Pharmacy.

In another example, CVS received $165.99 for a 90-day supply of simvastatin, a generic cholesterol medicine, from RxAmerica, and a $15 co-pay from Caremark. Pike’s Pharmacy filled a 30-day prescription and received only a $4.70 co-pay from Hauser and nothing from RxAmerica.

The difference in charges put Max Hauser that much closer to the so-called “doughnut hole.”

All of us understand how this would make them upset. Also, since they are aging, society should be watching out from them, not preying on them.

Reimbursement disparities

To make sure these weren’t isolated cases, Pike called Josh Rimany, owner of Dilworth Drug, another independent pharmacy in Charlotte. “If there’s more than one pharmacy (seeing the same thing), then it can’t be a fluke,” Pike said.

When Rimany looked at insurance statements for some of his customers, he noticed a similar disparity in reimbursements to CVS by RxAmerica and Caremark.

“CVS was getting their asking price, and we were getting what the insurance company would pay us,” which was less, Rimany said.

Is it just CVS?

Pharmaceutical companies and insurance companies have started or owned PBMs. And other pharmacy chains, including Walgreens and Rite Aid, have also purchased PBMs. But none have generated the complaints from independent pharmacists that CVS Caremark has.

This was a very in depth article in the Charlotte Observer

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~ by citizenjournalistreview on May 17, 2009.

One Response to “Are drug store chains & insurance companies ripping you off?”

  1. It isn’t just drug stores like CVS buying PBMs. It’s also insurance companies forcing patients to use mail-order companies they own and reap huge profits from (how is that not price-fixing or medicare/medicaid fraud?) and PBMs that will “generously” allow an independent pharmacy to have a contract with them . . . for AWP minus 40% (which means average wholesale price minus 40%). Most independents have to pay more than AWP (who is going to give one little shop in the middle of nowhere bulk pricing?) then they want you to sell it for 40% LESS than AWP. For example, we lose at least $4 almost every time we fill birth control, and that’s a relatively cheap drug. But what are we supposed to do? Not fill birth control prescriptions? In an underserved, low-income community miles and miles away from the next nearest pharmacy? We have to lose the money, because we actually have a conscience.

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