The J&J lawsuit should be a wakeup call to the PBM industry — and to companies everywhere and other notes from around the interweb:

• The J&J lawsuit should be a wakeup call to the PBM industry — and to companies everywhere. The ongoing legal dispute involving Johnson & Johnson has again thrust the topic of pharmacy benefit managers (PBMs) into the spotlight. Ann Lewandowski, a J&J employee, sued the company for overpaying for its employees’ prescription drugs through its PBM, Express Scripts, claiming that these overpayments resulted in higher health insurance premiums and out-of-pocket drug costs for employees. This lawsuit is a significant entrant in the recent groundswell of efforts to shine light on the traditional PBM industry and its opaque pricing structures and outdated evaluation models. It follows on the heels of probes by government regulators and attention from Congress into PBMs’ business practices. In late May, executives from three major PBMs were asked to testify before the House Committee on Oversight and Accountability.

• Blue Cross Blue Shield of Michigan dropping coverage of weight loss drugs. Michigan’s largest insurance company said it will begin eliminating coverage of various weight loss drugs next year. In a statement to CBS News Detroit, the company said it is ending coverage of GLP-1 drugs “for large group fully insured members beginning January 1, 2025, or on a group’s 2025 health coverage renewal date.” Additionally, the company said it will change prior authorization requirements for Saxenda, Wegovy and Zepbound beginning Aug. 1. The company said the changes were made “after careful consideration of GLP-1 weight loss drugs’ efficacy, safety and access, and cost. “Blue Cross Blue Shield of Michigan is committed to providing our members with access to high-quality, affordable health care. We also have a responsibility, as stewards of our members’ and customers’ premiums, to ensure that the drugs we pay for benefit our members without adding excessive costs that impact all members and customer groups,” the health system said in a statement.

• Missouri is in the center of a national drug pricing battle — with billions on the line. The stakes nationally are huge, in a medical market with escalating prescription prices and increasing concentration of medical providers in direct employment by hospital groups. Nationally, pharmaceutical manufacturers sold nearly $100 billion in discounted drugs in 2021 and 2022 through a federal program known as 340B, for the section of law where it is authorized. With an average discount of about 60%, according to representatives of the drug manufacturers, the wholesale value of the discounted prescriptions over two years is approximately $250 billion. The retail markup adds hundreds of millions more to the total revenue stream.

• Sanofi and Bristol Myers on the hook for $916M. Hawaii has won more than $900 million in a years-old lawsuit over the blood-thinning drug Plavix, in the largest court award in the state’s history. It’s a victory over two of the country’s largest drug companies, who said they plan to appeal. Plavix was marketed as a drug that could help reduce serious cardiovascular events. But in 2014, a state court found Bristol-Myers and Sanofi sold Plavix in Hawaii for 12 years, even though they knew it did not work on many Asians and Pacific Islanders. Judge James Ashford ruled that Sanofi and BMS knew that there was a risk “that about 30% of patients might have a diminished response to Plavix, but they did not update their label. The defendants created an environment where Hawaii prescribing physicians practiced for more than a decade without the necessary information needed to evaluate the serious limitations of this heart medication,” Ashford added.

The Consolidated Appropriations Act (CAA) has ushered in a new era of transparency and accountability in the healthcare industry. For Chief Human Resources Officers (CHROs) and Chief Financial Officers (CFOs), navigating these regulations can be daunting. One aspect stands out as a beacon of compliance and trustworthiness: the ERISA fiduciary responsibility which sets CAA-Compliant PBMs apart.

ERISA (Employee Retirement Income Security Act) mandates that fiduciaries act solely in the interest of plan participants and beneficiaries. This means making decisions with the utmost care, skill, prudence, and diligence. For PBMs, embracing ERISA fiduciary responsibility signifies a commitment to transparency, fairness, and prioritizing the client’s best interests.

Why ERISA Fiduciary Responsibility Matters

Transparency in Pricing and Rebates: A pharmacy benefit manager (PBM) with ERISA fiduciary responsibility ensures transparent pricing models. This includes clear disclosure of all fees, rebates, and any potential conflicts of interest. CHROs and CFOs can rest assured that there are no hidden costs, leading to more predictable budgeting and financial planning.

Alignment with Client Interests: ERISA fiduciary duty requires PBMs to align their practices with the interests of their clients. This alignment reduces the likelihood of exploitative practices, such as spread pricing or rebate pumping, which can inflate costs without providing added value to the employer or plan members.

Improved Patient Outcomes: When PBMs operate under ERISA fiduciary standards, their focus shifts to improving patient outcomes. This means implementing strategies that enhance medication adherence, optimize therapeutic regimens, and ultimately lead to healthier employees. Healthier employees translate to reduced absenteeism and increased productivity, benefiting the organization as a whole.

The Hallmark of a CAA-Compliant PBM

1. Rigorous Compliance and Auditing: CAA-compliant PBMs adhere to rigorous compliance and auditing standards. This ensures that all processes, from claims processing to rebate management, are conducted with utmost integrity. For CHROs and CFOs, this translates to reduced risk of non-compliance penalties and improved trust in their PBM partner.

2. Enhanced Data Transparency: Data transparency is a cornerstone of CAA compliance. PBMs with ERISA fiduciary responsibility provide detailed reporting and analytics, offering insights into drug utilization, cost drivers, and areas for improvement. This empowers CHROs and CFOs to make informed decisions regarding their pharmacy benefit plans.

3. Ethical Business Practices: ERISA fiduciary responsibility enforces ethical business practices. This means that PBMs must act in the best interest of their clients, avoiding any form of self-dealing or profiteering. For organizations, this translates to a partnership based on trust, integrity, and mutual benefit.

Choosing the Right PBM Partner

Selecting a PBM with a proven track record of ERISA fiduciary responsibility is crucial for compliance and overall plan success. Look for PBMs with extensive experience in managing pharmacy benefits for large organizations. Ensure they offer transparent contracting with no hidden fees or ambiguous terms. Lastly, choose a PBM that is committed to improving patient outcomes through innovative strategies and personalized care programs.

Conclusion

In the evolving landscape of healthcare, the role of PBMs has never been more critical. For CHROs and CFOs, partnering with a CAA-compliant PBM that upholds ERISA fiduciary responsibility is the single hallmark of a successful pharmacy benefit plan. By prioritizing transparency, aligning with client interests, and focusing on improved patient outcomes, these PBMs not only comply with regulatory standards but also drive value for organizations and their employees.

Adopting a fiduciary model sets the stage for a healthier, more transparent, and cost-effective pharmacy benefit plan. As you evaluate your PBM options, remember that the single hallmark of compliance and trust lies in ERISA fiduciary responsibility. Choose wisely, and your organization will reap the benefits of a truly accountable and client-focused PBM partner.

Sanofi and Bristol Myers on the hook for $916M in do-over of Plavix marketing case and other notes from around the interweb:

• State Halts GLP-1 Weight Loss Drug Coverage for State Employees. Concerning that costs could reach more than $1 billion over the next 6 years, North Carolina opted to stop coverage for the pricey new GLP-1s, saying the contracts between the drugmakers and the PBMs “are all-or-nothing.” The 750,000 public employees enrolled in the plan now must pay out of pocket if they want to take Wegovy or similar drugs. North Carolina initially wanted to save money by limiting prescriptions to patients who first tried lifestyle management programs to lose weight. However, the manufacturer and the state’s pharmacy benefit manager, CVS Caremark, said the state would have to pay full list price for the drugs unless it agreed to allow all patients with a prescription to get them without any preliminary hurdles, in which case the state could receive rebates amounting to a 40% discount.

• Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations. “We found that the PBM overcharged the Carrier and the FEHBP $44,882,688 (including lost investment income) by not passing through all discounts and credit related to prescription drug pricing that were required under the PBM Transparency Standards found in the Carrier’s contract with the OPM. Specifically, our audit identified the following six findings that require corrective action. The findings occurred across all years of the auto scope unless otherwise noted.”

• Amazon is expanding its pharmacy footprint. Amazon’s pharmacy business may be coming into its own as it expands its physical presence and eyes increased revenue from the new class of weight loss drugs. After struggling to find its foothold in the U.S. healthcare market since its launch in 2020, in March Amazon announced a partnership with Eli Lilly to deliver its weight-loss drug Zepbound to consumers and expanded its same-day pharmacy delivery service to New York City and greater Los Angeles. Amazon Pharmacy vice-president John Love told the Financial Times at the time that Zepbound and its rivals are expected to generate “a lot of revenue.” To help support those expanded delivery services, on May 29 Amazon Pharmacy opened its first physical location in California, according to the Los Angeles Press-Telegram. It’s not a normal walk-in store, however. The pharmacy sits next to an Amazon fulfillment center in Corona, California, behind two locked doors, and is meant to facilitate same day deliveries. It’s one of twelve locations nationwide, located in eight states, including New York, Indiana, Texas, and Florida.

• Sanofi and Bristol Myers on the hook for $916M. Hawaii has won more than $900 million in a years-old lawsuit over the blood-thinning drug Plavix, in the largest court award in the state’s history. It’s a victory over two of the country’s largest drug companies, who said they plan to appeal. Plavix was marketed as a drug that could help reduce serious cardiovascular events. But in 2014, a state court found Bristol-Myers and Sanofi sold Plavix in Hawaii for 12 years, even though they knew it did not work on many Asians and Pacific Islanders. Judge James Ashford ruled that Sanofi and BMS knew that there was a risk “that about 30% of patients might have a diminished response to Plavix, but they did not update their label. The defendants created an environment where Hawaii prescribing physicians practiced for more than a decade without the necessary information needed to evaluate the serious limitations of this heart medication,” Ashford added.

In the ever-evolving landscape of pharmacy benefit management, few developments have stirred as much excitement—and anxiety—as the introduction of triple agonist GLP-1 Retatrutide. With the potential to revolutionize treatments for diabetes and obesity, this novel drug is making waves. But what exactly is an agonist, and why is Retatrutide causing such a stir?

Understanding Agonists

First, let’s break down what an agonist is. In pharmacology, an agonist is a substance that binds to a specific receptor on a cell and triggers a response, mimicking the action of a naturally occurring substance. Think of it like a key fitting into a lock and turning it. When the key (agonist) binds to the lock (receptor), it opens the door (activates the receptor) to produce a specific effect.

Zepbound, Mounjaro, Wegovy, and Ozempic all function by reducing appetite, but there are key differences in their mechanism of action. Zepbound and Mounjaro are known as “dual-agonist” drugs, while Wegovy and Ozempic are “single-agonist” drugs. These medications activate essential hormone pathways in the body to achieve their effects.

What Makes Retatrutide Special?

Retatrutide stands out because it is a triple agonist. This means it simultaneously activates three different types of receptors:

1. GLP-1 Receptor (Glucagon-Like Peptide-1)
2. GIP Receptor (Glucose-Dependent Insulinotropic Polypeptide)
3. Glucagon Receptor

By targeting these three receptors, Retatrutide offers a multifaceted approach to managing blood glucose levels, enhancing insulin secretion, and potentially promoting weight loss. This multi-receptor activation could provide superior efficacy compared to current single or dual agonist therapies. Enrollees in the clinical trial receiving Retatrutide also experienced improvements in blood pressure and lipid profile.

Here are the detailed results from the Retatrutide study:

Key Observations

• Change in Body Weight: The graphs above illustrate the mean percentage change in body weight at 24 and 48 weeks across different dosage groups, highlighting the significant impact of Retatrutide on weight reduction compared to placebo.
• Weight Reduction Percentages: The bar chart shows the percentage of participants achieving weight reductions of 5%, 10%, and 15% or more at 48 weeks.

The Promise of Retatrutide

• Improved Glycemic Control: By activating the GLP-1 and GIP receptors, Retatrutide can significantly enhance insulin secretion in response to meals, leading to better blood sugar control.
• Weight Management: The activation of these receptors also influences appetite regulation and energy expenditure, potentially aiding in substantial weight loss for individuals with obesity.
• Cardiovascular Benefits: Preliminary studies suggest that Retatrutide may offer cardiovascular benefits, reducing risks associated with diabetes and obesity.

Why Worry?

Despite the promising benefits, the introduction of Retatrutide is not without concerns:

• Side Effects: As with any new medication, there are potential side effects. These could range from gastrointestinal issues to more serious concerns that have yet to be fully understood.
• Long-term Safety: The long-term effects of triple receptor activation are still under investigation. It’s crucial to ensure that the benefits outweigh the risks over extended use.
• Cost and Accessibility: New drugs often come with high price tags, and access can be limited by insurance coverage and healthcare policies. Ensuring that those who need Retatrutide can afford it will be a significant challenge.

Conclusion

As a new pharmaceutical sales rep at Eli Lilly, I toured the manufacturing facility for Cialis. The experience was astounding; advanced robotics handled every step of production, from mixing raw ingredients to pressing and packaging tablets, all without human interaction. Hundreds of tablets were manufactured every minute, a testament to the incredible advancements in pharmaceutical manufacturing technology.

Fast forward to today, and I see the same excitement and potential in the pending launch of Retatrutide. Just as those robotics revolutionized Cialis production, Retatrutide promises to revolutionize the treatment of diabetes and obesity with its triple-agonist approach. However, the cost implications cannot be ignored.

Self-funded employers, already navigating the complexities of healthcare costs, now face the challenge of incorporating this expensive but potentially life-changing medication into their plans. While the potential health benefits of Retatrutide are immense, it is crucial to balance these benefits with the financial realities.

Employers must consider strategies to manage these costs effectively, ensuring that they can provide the best care for their employees without compromising their financial stability. My best advice to you is pick the right pharmacy benefit manager.

As a CHRO, it’s crucial to stay informed about the impact of the CAA on your fiduciary responsibilities in managing pharmacy benefits. Here are ten key aspects in understanding the Consolidated Appropriations Act (CAA) for pharmacy benefit management:

1. Enhanced Fiduciary Responsibility: Prioritize the best interests of plan participants.
2. Transparency Requirements: Demand greater financial transparency from PBMs.
3. Disclosure of Direct and Indirect Compensation: Obtain detailed disclosures on all PBM compensation.
4. Reasonableness of Fees: Ensure PBM fees are reasonable and reflect service value.
5. Annual Reporting Obligations: Review detailed annual reports on drug pricing and utilization.
6. Prohibited Contractual Provisions: Comply with prohibitions on gag clauses and other restrictions.
7. Monitoring and Auditing Rights: Regularly audit PBM activities and data.
8. Plan Sponsor Responsibilities: Actively manage PBM relationships and performance.
9. Participant Disclosure Requirements: Provide clear information to participants about benefits and costs.
10. Penalties for Non-Compliance: Avoid penalties by adhering to CAA requirements.

📚 Continuous Learning is Key 📚

Engage in ongoing education and training to stay updated on regulatory changes and industry best practices. This will ensure you are well-equipped to navigate the complexities of the CAA and maintain compliance, ultimately protecting the interests of your plan participants and organization. Understanding the Consolidated Appropriations Act (CAA) for pharmacy benefit management is a key aspect of plan fiduciary responsibility.

Health plan sponsors must manage plan assets wisely and solely for the benefit of participants and beneficiaries. Fiduciaries are expected to possess expertise in their field or to seek guidance from subject-matter experts. The standard they must meet is that of a prudent expert, not just a well-intentioned layperson. Merely making a good faith effort does not suffice.

The video “Unlocking the Secrets of PBMs: Strategies to Navigate Their Profit Tactics” is an insightful 59-minute presentation designed to equip employers and benefits consultants with the necessary tools to effectively manage and negotiate with pharmacy benefit managers (PBMs). Over the course of the video, viewers are introduced to the various profit-making tactics employed by PBMs and the impact these can have on pharmacy costs and patient outcomes. Mastering PBM negotiations is an essential tool for CHROs, CFOs, and benefits consultants.

Key sections of the video delve into understanding the opaque pricing models that PBMs often use, which can obscure actual drug costs and complicate efforts to ensure fair pricing. The video provides practical strategies to unveil these hidden costs and leverage this transparency in negotiations. It also discusses the importance of contract clarity and how to ensure contracts are devoid of loopholes that could increase costs unexpectedly.

Furthermore, the video highlights the significance of staying informed about industry trends and regulatory changes that can affect PBM contracts. It advises on building a collaborative relationship with PBMs while maintaining a vigilant stance that prioritizes fiduciary responsibilities. For employers and benefits consultants, this video is an essential tool, offering actionable advice on how to reduce pharmacy costs without compromising on the quality of patient care.

This document presents a detailed evaluation of the top 10 clinical programs offered by pharmacy benefit managers (PBMs), which are pivotal for optimizing drug management and enhancing patient care while maintaining cost-effectiveness. The evaluation of top 10 pharmacy benefit manager clinical programs is methodically ranked, each program focusing on various aspects of clinical pharmacy benefit management.

1. Formulary Management: Topped by dynamic formulary adjustments, this program ensures regulatory compliance and the integration of clinical evidence to drive value-based decisions.
2. Specialty Pharmacy Management: This handles complex conditions through specialty pharmacies, emphasizing treatment adherence and efficiency.
3. Prior Authorization: Focused on fraud and waste prevention, this program maintains robust prior authorization processes with an approval rate below 70%.
4. Disease Management: Offers disease-specific guidelines and regular patient monitoring to enhance patient safety and health outcomes.
5. Medication Therapy Management (MTM): A comprehensive review of patient medications is combined with education and adherence programs to improve health impacts.
6. Benzodiazepine Management: This focuses on safe prescribing practices and patient education regarding the risks associated with benzodiazepines.
7. Generic Substitution: Promotes the use of generic drugs to enhance cost transparency and increase generic dispensing rates.
8. Medication Adherence: Utilizes medication synchronization and refill reminders to improve the proportion of days covered.
9. Opioid Management: Enforces guidelines on opioid prescribing, patient education on risks, and drug take-back options to manage opioid use effectively.
10. Step Therapy: Implements clear, evidence-based guidelines for medication sequences to ensure clinical and cost-effectiveness.

Each program is backed by best practices and involves key stakeholders like Pharmacy Directors, Healthcare Providers, and Pharmacy & Therapeutics Committees, ensuring a holistic approach to pharmacy benefits management. This ranking is crafted to assist Chief Human Resources Officers (CHROs) and Chief Financial Officers (CFOs) in making informed decisions about which clinical programs can best meet their organizational needs, align with financial goals, and ensure patient safety and satisfaction.

New lawsuit targets opioid pharmacy benefit managers and other notes from around the interweb:

• New Lawsuit Targets Opioid Pharmacy Benefit Managers. The case is before federal Judge Dan Aaron Polster of the United States District Court for Northern Ohio based in Cleveland. “Judge Polster recently opened a new bellwether track of cases against Express Scripts and OptumRx, two of the three PBMs with the largest market share in the United States,” according to the National Opioid Litigation letter. The other company in that top three is CVS Caremark, a subsidiary of CVS Health, that was included in a recent $10 billion settlement that also involved Walgreens…”About those companies, Marcus told the commissioners, “They chose profits over doing the right thing.”

• Fiduciary Duty Update: PBM Audit is Now Mandatory Protocol. The revelation that a drug costing over $10,000 in the market could be sourced for $28.40 has sent shockwaves through the industry, illustrating a glaring oversight in PBM management. Auditing your PBM is not merely a best practice; it is a critical safeguard against financial inefficiency and legal liabilities. Audits reveal discrepancies in billing, conflicts of interest, and non-compliance with contract terms — issues that, if unaddressed, could lead to breach of fiduciary claims.

• Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations. “We found that the PBM overcharged the Carrier and the FEHBP $44,882,688 (including lost investment income) by not passing through all discounts and credit related to prescription drug pricing that were required under the PBM Transparency Standards found in the Carrier’s contract with the OPM. Specifically, our audit identified the following six findings that require corrective action. The findings occurred across all years of the auto scope unless otherwise noted.”

• Why Are Cash Prices Lower Than Health Insurance Negotiated Prices? Growing evidence demonstrates a counterintuitive phenomenon in healthcare: the cash price is often cheaper than insurance prices for the same service or product. Cash prices are unilaterally determined by a provider, while insurance prices are bilaterally negotiated between a provider and an insurance company. Don’t insurance companies presumably possess more bargaining power than individual patients? Our study found that among common shoppable services—such as lab tests, imaging, and joint replacements—half of U.S. hospitals set cash prices lower than their median insurance negotiated prices. Cash price being cheaper than insurance prices has also been documented for prescription drugs.

Ranking the top utilization management (UM) programs used by Pharmacy Benefit Managers (PBMs) can be complex due to the proprietary nature of specific tools and strategies employed by different organizations. However, several key types of UM programs are commonly recognized as effective in managing pharmacy benefits and controlling costs while ensuring patient care. Here’s TransparentRx’s ranking of the top ten pharmacy benefit manager utilization management programs:

Pharmacy benefits must be carefully managed to ensure people receive cost-effective treatment, improving their well-being and helping them lead happier, longer lives. This also enables employers to maintain a healthy and engaged workforce. These UM programs form the core of what many top PBMs use to manage drug utilization effectively. Each program has its strengths and plays a critical role in balancing cost containment with the provision of high-quality care. The specific effectiveness and ranking can vary depending on the specific health populations managed and the overall strategy of the PBM.

Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations and other notes from around the interweb:

• Audit of the American Postal Worker’s Union Health Plan’s Pharmacy Operations. “We found that the PBM overcharged the Carrier and the FEHBP $44,882,688 (including lost investment income) by not passing through all discounts and credit related to prescription drug pricing that were required under the PBM Transparency Standards found in the Carrier’s contract with the OPM. Specifically, our audit identified the following six findings that require corrective action. The findings occurred across all years of the auto scope unless otherwise noted.”

• Why Are Cash Prices Lower Than Health Insurance Negotiated Prices? Growing evidence demonstrates a counterintuitive phenomenon in healthcare: the cash price is often cheaper than insurance prices for the same service or product. Cash prices are unilaterally determined by a provider, while insurance prices are bilaterally negotiated between a provider and an insurance company. Don’t insurance companies presumably possess more bargaining power than individual patients? Our study found that among common shoppable services—such as lab tests, imaging, and joint replacements—half of U.S. hospitals set cash prices lower than their median insurance negotiated prices. Cash price being cheaper than insurance prices has also been documented for prescription drugs.

• Fiduciary Duty Update: PBM Audit is Now Mandatory Protocol. The revelation that a drug costing over $10,000 in the market could be sourced for $28.40 has sent shockwaves through the industry, illustrating a glaring oversight in PBM management. Auditing your PBM is not merely a best practice; it is a critical safeguard against financial inefficiency and legal liabilities. Audits reveal discrepancies in billing, conflicts of interest, and non-compliance with contract terms — issues that, if unaddressed, could lead to breach of fiduciary claims.

• How GoodRx Helped Steal $7 From My Pharmacy. GoodRx, primarily known as a platform for obtaining prescription coupons and tracking drug prices, interacts with Pharmacy Benefits Managers (PBMs) in a way that’s distinct from traditional PBM operations. In essence, GoodRx leverages the existing PBM infrastructure to provide discounted prices directly to consumers, often bypassing the more traditional insurance-based prescription purchasing pathway. For benefits consultants and employers, understanding this interaction is crucial in advising on healthcare strategies that maximize both cost efficiency and patient outcomes. Employers need to consider how tools like GoodRx fit into a broader benefits design, particularly in terms of how they affect out-of-pocket costs for employees and the overall usage of pharmacy benefits managed under traditional PBM contracts.