Skoufis Investigative Committee Will Probe Big Pharma
By Edie Johnson
The bottom line of much of the high pricing in medicine, today, says Senator James Skoufis, is that Pharmacy Benefit Management Service Groups Are Taking Control of the Drug the Market, and putting many small pharmacy owners out of business.
Skoufis warns “We are only a few weeks away from sending requests to a number of the top PBM’s as “Document requests”, with the understanding that we will continue to seek a fair remedy, and that we have the power to issue subpoenas if they don’t comply.
Big conglomerate pharmacies are being accused of doing their business in such a way that they are essentially running small local pharmacies out of business. So says Senator James Skoufis as he begins the first of many investigations into possible corruption and price gouging. The problem, he says, is that companies like CVS are creating a monopoly-like situation by hiring middle management groups, also known as PBM’s (Patient Benefit Managers) to manage purchase and provision of medications. While it sounds innocent enough as a business management technique, the end result has become very suspicious. It is alleged that these middle management groups, which while negotiating, not only get large fees of their own that have to be passed on to customers. But worse yet, Skoufis says, they give so much more discount to the biggest pharmacies, like CVS, that the smaller pharmacies are in serious danger of going entirely out of business. Even worse yet, what do they do when they see the small independent guy struggling? They offer to buy them out. Add this to the extra services that these giant companies are beginning to offer, now jumping from vaccinations to immediate care services), and there is a very good chance that most or all of the smaller stores may soon be gone.
Further, according to Fortune Magazine, the Express Scripts group uses cryptic algorithms to reclassify generic drugs as brand name drugs. The end result is that the customer/patient pays top price for a drug that would otherwise be sold at a great discount as generic. Fortune went on to say that multiplied by all of the seniors alone buying necessary drugs, they would as a group would have saved $20 Billion more money to spend on other needs. Further confusing the smaller pharmacies buying product, the amount of use and price of product varies considerably depending on the time of year, and so there is already a great spread of fluctuating prices. As a result, neither small pharmacy owners or patients cannot get a grasp of what is a fair price and what is not.
With the CVS purchase of AETNA health care, doing a much higher volume of sale, getting much higher discount on product and offering lower reimbursement to the small guy, they are literally being pushed out of business. Skoufis says his investigatory committee will be looking, and soon, at how much they are taking out as a middle man, and what can and should be done to make the business more fair. If a single payer system comes into being over the next few years, the PBM system and its issues will disappear. Meanwhile, he says, they will continue to investigate what he feels is a vastly unfair system, both to the small pharmacy owner and paying customers. His promise, “No stone will be left unturned.”