CVS Alleged Scheme to Defraud Consumers

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CVS In Legal Hot Water

Alleged Scheme to Defraud Pharmacy Consumers

It’s no secret that Big Pharma has been raking Americans over the coals by jacking up drug prices, but how far some will go came as a shock! A lawsuit was filed by Hausfeld Firm one week ago, against CVS Health Corp. Allegedly CVS Pharmacy has been submitting falsified claims to insurance companies with inflated prices since 2008. Kristen Broz, the attorney that filed the lawsuit for the 7 plaintiffs stated, “We’ve seen people who pay $20 for a 30-day supply as their copayments on a drug that was $11.99 for a 90-day supply had they been in CVS’s Health Savings Pass program” (Yahoo Health News). CVS’s Health Savings Pass program offers discounts on generic prescription medications to patients that don’t have insurance or decide not to use it to try and save more money. This program includes popular generic forms of Prozac and Penicillin. “Instead of presenting insurance companies with that discounted price, CVS reported the higher price that a normal retail customer not in the Health Savings Pass would pay” (Yahoo Health News).

On top of the higher payment they were receiving from insurance companies, CVS was also collecting higher copayments from patients for the higher price they were submitting to the insurance. This fraudulent program allowed CVS to increase its market share, fight off discount prices from competitors, and hide its usual prices from third-party payers. It is estimated that hundreds of thousands of people may have been scammed and affected by this scheme. These accusations echo the accusations made by David Morgan, a licensed pharmacist that accused CVS and other Big Pharma companies of pulling this scam in December of 2013. Unfortunately the case was dismissed, but it was alleged that these companies were submitting billions of these false claims as early as 2001 (Courthouse News Service).

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Medication Errors

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Medication Errors

According to the Centers for Medicare and Medicaid Services, the number one cause of re-admittance to the hospital is non-compliance to medication. The FDA reports that since 1992 they have received notification of a startling 30,000 medication errors and more than 7,000 deaths a year as a result. This count does not include the number of medication errors that go unreported. “One study showed that more than half of patients at hospitals nationwide had an error in their medications, such as the wrong drug, the wrong dosage, the wrong frequency, or a potentially dangerous interaction with another drug” (bsahs.org). One report from the FDA included a situation where a physician ordered a 260mg prep of Taxol, but the patient received 260 mg of Taxotere from the pharmacist instead. This mistake cost the patient their life a few days later. It’s easy to make this type of mistake when we get into a routine. The steps and precautions pharmacists take can become mundane and “second nature”, which can become ineffective and dangerous for patients. When we mindlessly go through the motions, accidents are more likely to occur.

The FDA is working on different strategies to reduce the occurrence of medication errors. Drug name confusion, as in the example above, is a big cause of medication errors. “To minimize confusion between drug names that look or sound alike, the FDA reviews about 300 drug names a year before they are marketed. ‘About one-third of the names that drug companies propose are rejected,’ says Phillips. The agency tests drug names with the help of about 120 FDA health professionals who volunteer to simulate real-life drug order situations. ‘FDA also created a computerized program that assists in detecting similar names and that will help take a more scientific approach to comparing names,’ Phillips says” (FDA.gov). The rejection of certain drug names that sound like a medication already on the market is one action the FDA has taken in the fight against medication errors.

What can you and your pharmacists do to decrease medication errors in your area? How about changing your precautionary steps every quarter to reduce errors due to mundane repetition? What other ideas do you have?

A Hospital Minimizing Risk & Creating Jobs for Pharmacists

I think we can all agree that it will take change and testing different strategies to come up with long term solutions to reducing medication errors. A great idea we came across in an industry blog to reduce medication errors is a new two-part process that the Pharmacy Department at BSA Health System in Amarillo, Texas has implemented. Four pharmacists will now be staffed for patient education upon discharge to ensure patients fully understand how to take their medications before discharge preventing unnecessary readmissions, and four additional pharmacists assigned solely to the ER Department to perform medication use evaluation for each patient. Their goal is by educating and making sure each patient is well informed on the importance of each medication, they hope to see a significant improvement of proper medication usage within their patients including a reduction in medication errors.

References:
http://www.bsahs.org/blog/new-pharmacy-programs-aim-avoid-medication-errors
http://www.fda.gov/Drugs/ResourcesForYou/Consumers/ucm143553.htm
http://www.pharmacytimes.com/publications/issue/2010/january2010/p2pdispensingerrors-0110

AARP Report Posted On Price Inflation for Generics

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AARP Report Posted On Price Inflation for Generics

The price of some generic drugs that have been around for years are starting to climb again even after some relief in 2014. As you know with the Pharmacy Industry being a free market, big brand name Pharma companies can capitalize on their existing patent by driving up drug prices because no other company can provide that medication. Once this patent expires, generic drug manufacturers can then create this medication and sell it for a fraction of the cost. This past May, the AARP Public Policy Institute (PPI) released a report regarding drug prices that showed in 2013 there was a 4% decrease in the cost of generic drugs, which is the slowest rate of decline in the previous seven years.

About 27% of generic drugs listed in the AARP PPI had a rise in drug prices, and the price of 97% of brand name drugs increased. A common generic drug that caused “sticker shock” was Doxycycline Hyclate (100mg, 500 count) that went from $20 to a gut wrenching $1,849 in April 2014 (Trxade currently has it listed for $259.39 wholesale). Even though Doxycycline Hyclate has lowered since last year, it is still over a 1,200% increase from 2013. I spoke with a customer at the Pharmacy last week who said her generic birth control that usually costs $5, is now $35 a month. How did this medication become 7 times more valuable overnight?

That’s a trick question because it didn’t! Even pharmacists are confounded by this change; “When we polled our members about a year ago, they were experiencing a rash of dramatic price increases for generic drugs,” says Kevin Schweers, a senior vice president of the National Community Pharmacists Association, which represents small independent drugstores. “Some of the rises occurred virtually overnight. And it continued to snowball and impact more and more medications” (aarp.org). Generic drug price inflation has been so steep lately, that the Senate Subcommittee on Primary Health and Aging held a hearing to investigate. There is no easy answer as to why generic drug prices have soared to double their original price and in some instances as we have highlighted have even risen to over 1,000%!

Some think it’s due to less competition from mergers, others believe it could be caused by an increase in production cost, but the majority of us know that it is most likely unfounded. Panic is starting ensue for the uninsured as they won’t be able to afford some of the generic medications they have grown accustomed to getting at a fraction of the cost, Medicare recipients will experience higher copays or higher percentages, and all taxpayers should be on alert as we take on the responsibility of paying half of the bill for all prescription drugs through government programs. There’s no easy solution on how to combat this unruly price inflation, but further government regulation, price transparency, additional competition (including China which we covered last week), and a simpler coverage system could help.

References:

http://www.aarp.org/health/drugs-supplements/info-2015/prices-spike-for-generic-drugs.html

Teitelbaum, J., & Wilensky, S. (2nd Ed., 2013). Essentials of Health Policy and Law. Burlington, MA: Jones & Bartlett Learning, LLC.

Will “Made In China” Be Good For The Pharma Industry?

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Will "Made In China" Be Good For The Pharma Industry?

In the past medications from China were looked down upon and not trusted by many physicians around the world, including their own Chinese doctors. These medications are completely unregulated and have not been approved by the Chinese FDA. On appearance alone, many of the medications look identical; however, these medicines are dangerous and even fatal partly due to a lack of expertise, a shortage of quality manufacturing facilities, a small pool of talent to choose from, and a slow approval process by the State Food and Drug Administration (SFDA).

Gradually they are raising the standards of their drug manufacturing processes. Some Chinese pharmaceutical companies are even partnering with American pharmaceutical companies to ensure better quality and a higher efficacy rate. These partnerships and the government’s efforts to incentivize privately owned businesses in China could revolutionize the pharmaceutical industry bringing costs down. Do you think this could have the potential to reduce drug prices in the U.S.? It does seem to be plausible.

Get an Additional $30-$50 on Diabetic Claims

The voice of the customer is extremely important to us. When you speak, we listen. Did you know that if you ‘TRxADE it”, you can not only save money on insulin, but you can also save money on complimentary DME products as well? Last week Courtney with Shellman Drugs in Shellman Georgia reached out to us to let us know due to TRxADE they are making an additional $30-$50 per claim by purchasing insulin, syringes, and test strips on the TRxADE buying platform.

TRxADE is your one-stop-shop for all your Diabetic needs. We compare prices for several insulin suppliers, but also for syringes and test strips as well including overstock from peer pharmacies where allowed by state law.

Courtney may look familiar as two weeks ago we received a testimonial that due to TRxADE’s savings they went their first week in years without negative losses on reimbursements!

TRxADE it!

Before you place your order with your Primary or Secondary’s, TRxADE your order and compare pricing before buying! Save on medications especially with negative reimbursements. Many pharmacies have grown accustomed to rebates, high volume discounts or kickbacks. When you TRxADE it you get immediate savings, and hard cash immediately back into your pharmacy’s bottom line instantly. Stay profitable fellow pharmacies and join in our fight to ensure Independent Pharmacies Thrive, not just Survive! What are you waiting for? TRxADE it today!

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