Plan Sponsor ALERT: PBMs Should Be Held Accountable for Opioid Crisis
It is no secret that the opioid crisis has caused devastating impacts upon patients and their loved ones as well as the overall healthcare industry. Since the inception of the crisis, public Plan Sponsors including state agencies and municipalities, have brought countless claims against the opioid manufacturers, distributors, and wholesalers. However, until recently, plaintiffs have failed to apprehend the critical role played by Pharmacy Benefit Managers (PBMs) in the on-going crisis. That trend seems to be reversing.
Judge Dan Polster, who is presiding over the National Prescription Opiate Litigation, entered an order dated July 15, 2019 mandating the country’s three largest PBMs — Caremark, Express Scripts, and OptumRx — to alter their national formularies so that they align with CDC guidelines regarding opioid prescriptions. It is the first major step in holding PBMs accountable for their participation in the opioid epidemic. More recently, New York Governor Andrew Cuomo announced last week that he will take action against PBMs for their role in the current opioid crisis. “I’ve seen a number of schemes and frauds, but the opioid scheme is as diabolical, as brazen, as obnoxious and as offensive as anything I’ve seen,” Governor Cuomo commented. The Department of Financial Services (DFS) has determined that New York consumers have overpaid an estimated $2 billion in insurance premiums over the past 10 years due to the costs associated with opioid manufacturers.
It is logical that the government has turned its attention toward PBMs in light of their role in the opioid crisis. PBMs have been acting as the “middlemen” between opioid manufacturers and insurers (i.e., Plan Sponsors). In general, PBMs provide pharmacy benefit administration services to Plan Sponsors and such services include, but not limited to, negotiation and collection of manufacturer rebates. DFS had indicated that it received information that some PBMs may have been paid rebates by opioid drug manufacturers, opioid drug wholesalers or opioid drug distributors in exchange for placement of an opioid prescription drug in a favorable drug formulary tier with lower co-pays. By placing an opioid prescription drug in a “preferred” status in the drug formulary, PBMs have made it much easier for prescribers and patients to overutilize the opioid prescription drug. PBMs should be held accountable, among other things, for their failure in policing and preventing prescription fraud, waste, and/or excessive opioid prescriptions as well as vetting out fraudulent claims. PBMs not only failed to perform their obligations but also financially benefited by pushing opioids into the market.
In light of the foregoing, Plan Sponsors should look into opioid claims submission data provided by PBMs for any misconduct. If you are a Plan Sponsor that has noticed a questionable opioid claim processed by PBMs, contact Frier Levitt today to speak to an attorney.