Express-Scripts Says It Will Refuse Payments from Drug Makers To Promote Products
Express Scripts, one of the nation's largest pharmacy benefits managers, on March 18 announced that effective Oct. 1 it will stop accepting money from pharmaceutical companies to promote drug makers' products to physicians and patients, the New York Times reports. In a letter released to the public March 18, Express Scripts CEO Barrett Toan also pledged to "promote lower-cost drugs" and "never recommend switching a member to a higher-cost drug." However, a company spokesperson said it will still promote certain drugs "on our own nickel" and continue to accept rebates from manufacturers, based on increasing drug sales and market share. Steve Littlejohn, an Express Scripts spokesperson, said if the company informed its customers of all payments it received from drug makers, it would "remove the incentive" for drug makers to "bid vigorously" to offer discounts.
Increasing Scrutiny
PBMs recently have "come under scrutiny" by critics who say that they are partly responsible for increasing drug costs, the Times reports (Freudenheim, New York Times, 3/18). In January, a report by the General Accounting Office found that rebates and fees paid by drug companies to pharmacy benefit managers to promote the companies' drugs were the "keys to profit" for some PBMs (Kaiser Daily Health Policy Report, 1/10). Last week, documents filed by plaintiffs in a class-action lawsuit found that Medco Health Solutions, one of the nation's largest PBMs and a subsidiary of Merck, received $3.56 billion in rebates from drug makers in the late 1990s to promote sales of certain products (Kaiser Daily Health Policy Report, 3/13). Further, the Justice Department and state attorneys general are investigating "whether rebates and other fees from drug makers to PBMs are fully reflected in lowered prices for Medicaid," the Times reports. By law, drug makers are required to provide state Medicaid programs product prices based on the "best price" they charge other purchasers. Tim Dickman, CEO of Minnesota-based Prime Therapeutics, a PBM owned by Blue Cross and Blue Shield plans in Minnesota, North Dakota, Kansas and other states, said PBMs' business model "is largely focused on extracting revenue from pharmaceutical manufacturers, only some of which is passed on" to employers and health plans in the form of savings (New York Times, 3/18).
