Pharmacy Benefit Managers as Pharmaceutical Marketers

We posted a number of times about questionable practices Eli Lilly used to market its atypical anti-psychotic drug Zyprexa (olanzapine). A post from 2007, with links backward, is here, and our most recent post is here. The company remains entangled in litigation over its marketing of this drug. That litigation has lead to the release of numerous internal documents that provide quite a view of Lilly's marketing practices. Bloomberg continued its reporting on these documents, with its latest effort here via the Boston Globe, describing yet another surprising way this drug was sold:

A unit of CVS Caremark Corp. used its access to doctors to market Eli Lilly & Co.'s Zyprexa antipsychotic while it was under contract to bargain with the drug maker on behalf of health insurers, internal Lilly files disclosed in a multibillion-dollar lawsuit by insurers show.

The subsidiary of CVS, the largest US drugstore chain, touted Zyprexa starting in 2003, according to e-mails made public by lawyers suing Lilly for overpayment. CVS's AdvancePCS, a pharmacy benefit manager, or PBM, offered to send 120,000 letters to doctors promoting the drug, Lilly's top-seller with $4.7 billion in sales last year, according to a confidential 2004 proposal. The CVS unit said it would charge $5 per letter.

AdvancePCS, acquired by Woonsocket, R.I.-based CVS in 2007, said in the documents that the direct-mail campaign was 'designed to influence key prescribers' as part of a 'tactical plan for Zyprexa.'

Furthermore,

In AdvancePCS's 2004 pitch to Lilly offering to send out letters promoting Zyprexa, Kevin Aholt, the company's assistant vice president in charge of strategic alliances, said he could target physicians based 'on the most recent AdvancePCS claims data,' according to the unsealed documents.

Aholt also said that one of the 'key issues' in the market for antipsychotic drugs was finding ways to 'accelerate the growth of new patient starts,' according to the proposal.

Also,

Steven Fuchs, an official at the PBM, asked Lilly officials in an April 2004 e-mail whether he should include information about Zyprexa's ability to calm agitated patients in the next round of letters to doctors.

'Would a discussion of that be something you would want to include?' Fuchs asked, according to the document.

Lilly marketing executive Scott Dell responded in an e-mail that officials at the drug maker had discussed asking AdvancePCS to include material highlighting 'the new bipolar maintenance indication for Zyprexa.'

AdvancePCS was not the only pharmacy benefits manager (PBM) that offered to help sell Zyprexa.

CVS rival Express Scripts Inc. also sent out Zyprexa marketing letters, according to the unsealed documents and also isn't named as a defendant in the suits.

So here we have at least two pharmacy benefit managers (PBMs) offering to help market a particular drug, for money, of course. What is the problem here?

CVS's contracts with insurers and pensions meanwhile place it in an adversarial posture with Lilly, requiring it to use its buying power as leverage in drug-price negotiations.

'The problem is that PBMs are negotiating these hidden deals while at the same time telling employers that they represent them at the negotiating table,' said Gerry Purcell, a former PBM executive who advises companies on their drug plans. 'These documents will add fuel to the perception that the companies and the PBMs are in cahoots with each other.'

Also,

While PBMs negotiate on behalf of insurers, most states don't designate them as agents of the benefit plans, said Robert Garis, a pharmacy professor at Creighton University in Omaha who studies the industry. As a result, they aren't legally required to act only in the best interest of their clients, he said. Maine is one of a few states that have specified PBMs as fiduciaries, or agents, he noted.

'The companies have gotten around that by adding language to their contracts that exclude them from having to meet those fiduciary duties,' Garis said.

Apparently, in this case, one PBM said it disclosed its relationship to the drug company to physicians, but it is not clear whether it was disclosed to the health care insurers and managed care organizations which paid the PBM to reduce the costs of drugs:

CVS, which isn't a defendant in the Lilly suit, said that it tells doctors when it has 'financial relationships' with drug makers and that they are free to opt out of mailings.

'To engage in a point/counterpoint in a media outlet rather than in court would not be productive,' said Lilly spokeswoman Marni Lemons.

Lemons declined to answer specific queries about the CVS or Express Scripts letters, whether Lilly paid for the practice, or other questions raised by the unsealed documents....

CVS said in its e-mailed statement that it has 'no active educational programs' related to Zyprexa.

'CVS Caremark discloses to its PBM clients that it may have financial relationships with pharmaceutical manufacturers in connection with these educational programs,' said Christine Cramer, a spokeswoman for the chain. 'CVS Caremark's PBM clients are aware of these programs and have the opportunity to opt out.'

Maria Palumbo, a spokeswoman for Express Scripts, didn't respond to eight telephone and e-mail requests seeking comment.

CVS covers 82 million people, with a market share of 12 percent, and is the largest pharmacy benefit manager, according to Atlantic Information Services. Express Scripts, which covers 55 million people, is the fifth largest. PBMs process about 75 percent of the retail prescriptions written annually in the United States, according to the insurance plans.

The insurance plans sued the drug maker in 2005, contending it used researchers, pharmacy benefit managers, advocacy groups, and public agencies to promote Zyprexa.

Whether or not the PBMs disclosed their relationships to the pharmaceutical company to everyone who might be interested, it does seem that having PBMs who are supposed to help insurers and managed care organizations control drug costs be paid by pharmaceutical companies to market drugs is yet another new species of institutional conflict of interest. Like the many other conflicts of interest, individual and institutional, we have discussed, this one appears to be mutually advantageous to the parties involved. However, it could have adverse consequences for physicians, patients, and the health care system. If the organizations that are supposed to be controlling drug costs are also promoting expensive drugs, the likely result would be excess prescription of expensive drugs to patients who may not derive benefits from the drugs outweighing their harms.

This is another reminder how much we need more sunshine shone on the multitudinous conflicts of interest affecting just about every type of actor within the current US health care system.

A Wide Web of Healthcare Data: He Who Controls The Data, Controls the Playing Field

In posts such as here and here, it's become apparent that "Evidence Based Medicine" (EBM), while perhaps reasonable in theory, is probably unreasonable in practice with the ethics of healthcare in 2008.

One cannot have evidence based rules for anything, let alone healthcare, if the evidence is tainted.

Think clinical research and the drivers of "publish or perish" are the only domains where this evidentiary taint can occur?

Think again.

From a medical colleague, a talented ER physician:

Did anyone see that Wolters Kluwer (a leading multidomestic multimedia company with corporate office in Amsterdam) plans to buy electronic medical platform Up-To-Date?

Correct me if I am off track on the issue of the "full-circle web" of information exchange - an exchange that starts with the sanctity of the private physician patient relationship.

OK, I have a private relationship with my patient, but the perverse laws say that our relationship and the information ‘collected’ is no longer sacred. It may be used without consent under the guise of 'Treatment, Payment or Healthcare Operations' (TPO).

From the Miller School of Medicine Privacy & Data Protection project glossary:

HIPAA bundles a large number of functions into the term "health care operations." This expansive list is important for many reasons, most notably because HIPAA requires no permission from patients for uses and disclosures of protected health information (PHI) for "treatment, payment or health care operations (TPO)."

Covered entities may obtain a consent for TPO-related uses and disclosures, but the practice is optional under HIPAA. (It may nonetheless be required by state law.)

Additionally, the prescription information ‘exception’ from that sensitive relationship is fair game for the data-miners to sell to Pharmacy Benefit Managers (PBMs) and the like.

The so-called ‘Publishing’ company, Wolters Kluwer, who by the way unashamedly writes friend of the court briefs supporting the data merchants and miners (e.g., Amicus Briefs supporting the plaintiffs; IMS and Verispan), is now buying one of the most widely used point of care "Evidence based medicine" tools, Up-to-date.  This is a software application for physicians to practice ‘evidence’ base medicine.

Verispan is a subdiary of one of the largest EHR vendors, McKesson. Without sounding like a nut-case full of crazy conspiracies ...

Is not this bizarre web not only destroying the trust between the patient and the physician, but additionally eroding the trust of what actually is ‘evidence’ based medicine?

I thought the rigor of science was supposed to be the driver and best influence of my decision making process for my patients, not the pull of ‘Pharma and Friends’ puppet stings.

I guess as a physician I am just marginalized to an assembly-line worker for big Pharma.

As an aside:

1. the direct to patient(consumer) marketing expenditures of Pharma – est. $30 billion / year.
2. the entire NIH budget $28 bil/yr.

So, it seems, evidence based medicine is not only threatened by commercial taint of clinical trials and research, it's also potentially threatened by the drivers and behaviors of the Data Merchant component of the healthcare IT ecosystem.

Who polices them, I ask?

-- SS

Express Scripts Settles

Another day, another settlement (of charges that a big health care organization deceived patients and physicians)... Here is the story summarized in the Wall Street Journal:

Pharmacy-benefits manager Express Scripts Inc. agreed to pay $9.5 million to settle allegations that it asked doctors to switch drugs primarily so it could get bigger rebates from pharmaceutical companies.

The move all but closes the books on a four-year investigation of practices at pharmacy-benefit managers, or PBMs.

'Today's settlement completes our effort to clean up the PBM industry,' Vermont Attorney General William Sorrell wrote in a release. Vermont, which gets a $372,000 cut, was one of the lead negotiators with the company.

Fellow pharmacy-benefit managers Medco Health Solutions Inc. and CVS Caremark Corp. have already reached agreements with the states over similar issues.

The agreement states that Express Scripts 'engaged in deceptive business practices by encouraging doctors to switch patients to different brand name prescription drugs and representing that the patients and/or health plans would save money,' according to the Vermont attorney general's office.

The Hartford Courant's coverage added some more detail about the nature of the deceptive business practices:

Express Scripts told doctors that switching their patients to different cholesterol-lowering drugs would save money for patients and insurers, but they often saved little or incurred higher medical costs, [Connecticut Attorney General] Blumenthal said. Patients, for instance, might have had additional blood tests and doctor visits as a result of the drug-switching.

This is first a reminder of the amazing complexity of the US health care system. Not only are there the major organizational players, but numerous middleman organizations that work in the interstices of the system. Pharmacy benefit managers (PBMs), for example, work in the interstices between patients and physicians, pharmacies, pharmaceutical companies, and managed care organizations and insurers.

And it seems like each kind of organization may cultivate its own brand of deceptive practices. Note that Express Scripts is apparently the third PBM to agree to stop the kind of deceptive practice noted above.

The more complex the system, the more organizations shuffling money and paper around, the less transparency there is, and the more opportunities it seems there are to make money via deception.

Yet on a health care policy level, does anyone talk about developing systematic approaches to combat deception and unethical business practices, much less making the overall system more transparent? Not hardly....