Mail Order Pharmacies  -- What you don’t know 

Mail order pharmacies grew out of the market need for greater convenience and efficiency at lower costs. 

At the time, it seemed logical enough. Place your orders, get your prescriptions at home. What could be better than that?

What was left out of the analysis included the following:
 Customer-pharmacist relationship
 Changes in doctors’ prescriptions
 Weather Sensitive drugs
 Delivery issues
 Ownership

Customer-pharmacist Relationship

Most people trust their doctors but they trust their pharmacist more. They see the pharmacist as the last line of defense when it comes to their health, and their lives. Mail order houses are fine if all you want is a drug. If you want advice, if having a local pharmacist to consult with is important to you, then the package in the mail box is not for you. It’s not for me, either.

But, if you are getting the same drug month after month, and you know that’s how it’s going to be, then maybe the savings take precedence, especially if you’re on a fixed income. After all, look at all the people who get their diabetes drugs that way. Works for them, doesn’t it? 

Life is always a balance of values. What is more important is always the deciding question and the answers are not often easy. The decision is made harder if you’ve bought prescription drugs for some time and have developed a relationship with your pharmacist. You come to rely on their advice. In 2013, “Gallup’s annual Honesty and Ethics survey* show that pharmacists ranked second, finishing ahead of physicians and second only to nurses. It is the ninth consecutive year in which pharmacists have ranked in the top 3.”  

Sometimes the choices are not left to you. Increasingly, insurers are encouraging their clients to use mail order to keep prices down. One way to do that is by adjusting the patients’ co-pays. For example, you can fill your prescription at your preferred pharmacy and pay a co-pay ($4 or more). Or, you can fill it through mail order and have no co-pay. The choice is still yours but there’s a cost to you. What do you value more? If you’re on a limited budget, there really is no choice.

Pharmacies across the nation are facing a challenge to their existence. It’s not the first challenge they’ve encountered and it’s certainly not the only one. They will try to adapt as they always have, and some will succeed. Some pharmacies offer special on-site services, such as blood sugar testing and personal consultation. Others are offering classes on topics of interest to patients. The value of these services often moves the balance in their favor. Competition drives creativity.

Changes in doctors’ prescriptions

Most prescription drug users change prescriptions frequently, especially in the first few months of treatment, when there’s a learning curve involved.  Each patient is different and so are the drugs. Whether for ADHD or depression, blood pressure or diabetes, a drug that works fine for one person may be less effective for another. This even applies to something as simple as the dosage. A 20mg dose that’s good for you is too much for someone else. 

Mail order houses don’t respond well to such changes. As a result, you may institute a change but you still get the same drug shipped. Or, as often happens, you get two scripts. The result is that your medicine cabinets fill with stuff you didn’t need and certainly didn’t want. Either way, the mail order house gets paid.

Time is also an issue. If the doctor wants to change your medications, it can take a few weeks until the new drug arrives. The solution to that dilemma is the local pharmacy, if it’s still in business.

 Weather Sensitive drugs and Other Delivery issues

Many prescription drugs are temperature sensitive. Some require refrigeration to remain effective. Delivery by mail is risky, especially in rural areas or for full-time workers who cannot be home to take delivery. It is not uncommon for a person to find a package delivered to the back porch, set next to the garage or placed somewhere the homeowner never considers to look. A misplaced book is one thing. A mis-delivered prescription is more serious, if not deadly.

None of these issues exist with community pharmacies. Many community pharmacies will even deliver prescriptions to people who cannot make it in themselves. It's the neighborly thing to do, after all.

Ownership

What is a mail order house, anyway? It’s a huge warehouse-distribution center, not unlike amazon.com. Tens of thousands of drugs, each in its own large container, each dispensed in specific quantities into smaller containers, labeled and shipped. Nothing magical here. 

Mail order houses came about to fill a need for efficiency in drug distribution. Insurance companies could save a small fortune using an outside source other than a pharmacy to dispense drugs. In a way, it eliminated thousands of middlemen and all that cost. 

What could be better? One thing. What if the insurance company owned the mail order house. What better way to keep costs in check. 

Today, the largest pharmacy chain owns its own PBMs, along with the metaphorical ‘keys to the kingdom.’ So, when your employer gives you a prescription drug benefit, chances are it is one of two PBMs which, together, account for over 95% of all prescriptions filled across the nation. They, in turn, offer you choices: a low co-pay if you choose a preferred pharmacy, like their own; a zero co-pay if you use mail order, also their own; a higher co-pay if you use a non-preferred pharmacy; and a higher co-pay if your doctor prescribes a drug that is not on their “formulary’ ( a euphemism for a drug they can’t make enough money on).

To carry the story to its conclusion, after you’ve made your selection, picked up your meds and are using them as prescribed, the PBM then charges your employer whatever it wants, sometimes as much as 40x what the pharmacy was paid, and even more than when its own mail order house was the fulfillment source.

No Co-pay?  --  It’s not always such a deal

Unless you’re a cash buyer, you may have no idea what the drugs you use really cost.* For example, I priced out my script for Clopidogrel (generic Plavix) at my local community pharmacy**. I paid $12. That’s the total cost.

If I use insurance, I can pay a small co-pay of about $7. That’s a savings, right? Yes, it is -- to me, but it is not the total cost. If your insurance is through your employer, the total cost to the company can be $20 or more. In some cases, your employer might be paying millions in overcharges and neither you, nor any of your co-workers will ever know. Heck, your CFO may not know it, either. If you are on Medicare Part D, they might get charged $20 or more, too. (Read my blogpost**)

This stems from the relationship between the insurer and the Pharmacy Benefit Management company (PBM) that manages their prescription drug process. As a consumer, you more than likely have never heard of a PBM, the guys who process all those claims. But, they’re there, and their actions border on the criminal.

A great way to explain this process is, as one expert put it, to talk about pizza. Let’s say you own the company and that you love your employees. Every few weeks you throw pizza parties at all your different facilities. Over the course of a year, you’ve bought lots of pizza, of all sorts -- plain, multiple toppings, deep dish, Chicago-style, you name it.

Now pizza is not your business. Your company makes things or provides valued services. That’s what you focus on. The pizza is an employee benefit. Buying so much pizza is complicated. So, you hire Ralph, world renowned for managing pizza benefits. You tell him to bring you a pizza and you give him a crisp $100 bill. He returns with a piping hot ‘Supremo’ pizza, extra large, the aroma from which fills your office. He gives you $21 in change. So, it stands to reason the pizza cost was $79, some for the pizza, some for the ‘process’. 

What you don’t know -- and can’t know, is that the pizza cost Ralph $14.99. The retail price is $24.99 but Ralph buys in such volumes that he can negotiate for the best prices. Over the next few years, the price of pizza increases by 12-15% per year. By year five, that same pizza now costs your company $158! 

So, you call Ralph in for a ‘discussion’. He says, look, raw materials and labor have gone through the roof. That’s what pizzas cost today.  You have some tough decisions to make. Do you make your employees pay a co-pay? Do you find that you may have to stop giving the benefit altogether because it has become too expensive?

You ask someone in HR to look over the contract you have with Ralph but it’s almost impossible to understand. What is clear, though, is that by agreement, you cannot talk to the pizza maker. Oddly enough, in Ralph’s agreement with the pizza maker, he cannot talk to you, either. And what you don’t know, and what he can’t tell you, is that the price he gets for the pizza has only gone up $2 over that time. Guess where the money went.

You decide you’re going to audit Ralph. Fine, he says, but you have to use an auditor of his choosing. It’s in the contract! You wonder who, if anyone, in your company, ever read the contract before it was signed.

You decide to shop around with one of Ralph’s competitors. They confirm that prices have been going up at outrageous rates but, they’re system will save you future expected increases. That’s one way to go. Chances are, you’ll end up with similar results, just from a different vendor.

You, dear reader, may think this is all fiction. I point you to a recent article in Fortune Magazine (Painful prescription By Katherine Eban***), a quote from which says,

 Schenk decided to figure out where Meridian's money was going and why its drug costs were    escalating. That was no easy task because, like most PBM customers, Meridian received data only on what it was being charged for each employee prescription. Meridian didn't know what it cost the PBM to fill that order.

 Then Schenk had a stroke of inspiration. He realized that Meridian had a second stream of data that almost no other PBM customers had: Its in-house pharmacy was paid by Express Scripts for many prescriptions. That meant Meridian could see both what the  PBM was paying to buy drugs and what it was selling them for.

 When he compared the two lists, the mild-mannered pharmacist was shocked: Express Scripts was making huge gross profits (known as "spreads" in the PBM world) ranging  from $5 per order to many multiples of that. In one particularly extreme example, Meridian was billed $92.53 for a prescription for generic amoxicillin filled at an outside pharmacy. Meanwhile, Express Scripts paid $26.91 to Meridian's own pharmacy to fill the same prescription. That meant a spread of $65.62 on one bottle of a generic antibiotic.

   

The Same PBM that is ravaging US corporations is also managing the Medicare Part D, Medicaid and TriCare. Go figure. You may not know that Part D came into existence under president George W. Bush, and that the law: 1) kept the regulator from negotiating drug prices with Big Pharma; and, 2) prevents the regulators from looking behind the curtains to see how much the pizzas really cost. When you as ‘Joe and Jane citizen’ hear legislators cry out that government costs too much and that Medicare is a major drain, it was they who passed the bill into law! It was they who kept the regulators from doing their jobs.

"What do you think?

Would you rather pay $200

for a prescription of AstraZeneca's heartburn medicine Nexium

or $620?"

Those were the opening lines of an article posted at fiercepharma.com* reporting on Maine’s new law allowing importation of prescription drugs from Canada, the UK and Australia. And, it reinforces the reality that some of the greatest mail order services for American consumers are outside our borders. 

How is it that possible? There are two reasons. First, the Canadian government negotiates prices with drug manufacturers. Their prices for brand name prescription drugs are significantly lower than those paid by consumers at pharmacies in the United States. That in itself makes Americans ask, “Why do they get the deals and we don’t?”

The answer, in a nutshell, is that their legislators work for the people, while most of ours work for corporate interests. It’s not exactly a secret.

Drug manufacturers and pharmacies are furious that their US customers should go off shore. They point out there are laws against it, citing the health risks of buying from unknown foreign sources.  They fail to mention that what Americans are buying were made by them and sold to Canada, Australia, New Zealand and the United Kingdom. Each product has all the tracking information on it to prove its validity. 

American pharmacies want the practice stopped because it hurts their business. But all consumers want are fair prices that permit them to buy the drugs they need at prices they can afford.  

The facts don’t support their spurious claims. Facts are not their friends. But politicians are. One look into Big Pharmas’ contributions to federal, state and local politicians’ coffers and it’s easy to see a correlation between those contributions and legislation favoring pharma’s interests over consumers. As is all such cases where the consumer comes last, the way to be sure is to follow the money trail.

The Extra 8 Per Cent Discount

Most of us don’t live near a border but those of us that do really appreciate and understand exchange rates, the difference in value between the US and Canadian dollars. For us, it’s like getting a discount on our purchases. That’s the second benefit of buying Canadian. 

Currently, the Canadian dollar is worth 92 cents US, an 8% discount for someone buying with US dollars. This, in addition to the already low prices for the drugs, is an added bonus.

The Right American Solution

There’s an easy answer to this Made in (Corporate) America dilemma, with its spill over effects on retailers. Stop gouging consumers. Big Pharma can charge the same prices in the U.S. that it charges Canada and, POOF! Problem Solved.

Now, you and I know that Big Pharma doesn’t see it the same way. To make sure they get their way, they are taking steps to pass laws to outlaw the sale of drugs from Canada, or anywhere else for that matter. The only way you can protect your rights is to contact the same legislators, to let them know that you want them to do their job, which it to protect your rights. Make it clear that your vote in the next election is predicated on them doing right by you.

There’s more you can do. Write letters to the editors of local newspapers. Form associations with other, like-minded people. Contact local TV and radio stations to let them know what’s going on. There’s plenty for you to talk about.

Start with this. Maine is the first state in the Union to legislate buying from Canada. The city of Portland ME alone will save some $200,000 a year on drug costs.  The same goes for employees of a single company, Hardwood Products, who also save $400,000. You can extrapolate from there. We’re talking about hundreds of millions of dollars in savings, and huge savings for you as an individual.

Tell them about Julie (not her real name), the woman I reported on. Her depression drugs, Seroquel, Strattera and Abilify were costing her over $1,300/month. She now gets them from Canada a Canadian mail-order pharmacy for $180/month shipping included. While the order is through Canada, the drugs can arrive from England, Australia or New Zealand.

Imagine what Julie could do with the $1,150 savings. More importantly, you should know that she, like millions of other Americans, does not have $1150 sitting around. She cannot pay those prices. She faced the real threat of doing without. 

Now, it’s critical to understand how Big Pharma will try to spin their efforts to derail Maine’s law. First, they’ll talk about safety. They’ll use scare tactics to make it seem like you’re buying bogus drugs of questionable quality. Hey, they’ll say, you could die from these products. 

The truth is that Americans have been buying prescription drugs from Canada for years! Were there ever problems? Yep. Some years ago, CanaRx once shipped an insulin medication that needed refrigeration without proper controls. It fixed that problem and hasn’t had a complaint. since.

A second fear tactic used by Big Pharma is that companies will pop up all over the globe to fill the demand for low cost drugs. So what?

Two points stand out. First, the Canadian companies have decades of service to the US market (if not you, then your friends, for sure). Any new suppliers will have to earn their way into the market. In the meantime, you have proven sources.

The only reason Big Pharma is against the importation of their own drugs, is that they have for decades owned the market and made outrageous profits at our expense. It’s your turn to correct that injustice.

Support your Local Community Pharmacy

Don’t blame your local community pharmacist for this mess. The blame lies completely with the drug manufacturers. If they elect to adjust their pricing to the new realities, then prices locally will adjust and you’ll have another option open to you. In any case, the 80% of drugs purchased are generic, and they are cost effective locally, PROVIDED YOU SHOP AROUND. Be sure to buy from your LOCAL INDEPENDENT COMMUNITY PHARMACY, not the NYSE traded big box stores.

The ball is in your courts, my friends, in two ways. First, it’s in the courts of law because Big Pharma wants to use our court system to their advantage – and to our disadvantage.

Second, the ball is in our metaphoric court. It is up to us to act in concert for what is good for American consumers, you and me.

Can we count on you?

* http://www.pharmacytimes.com/news/Pharmacists-Are-Among-the-Most-Trusted-Professionals-Says-Survey

** http://whiletherestime.blogspot.com/2013/11/lets-talk-about-medicare-part-d.html

*** http://money.cnn.com/2013/10/10/news/companies/pbm-pharma-management.pr.fortune/

 index.html

 Full article at 

 http://katherineeban.com/2013/10/23/painful-prescription-fortune-com/ 

If the FTC was truly serious about health-related issues resulting from prescription drugs, it would be more aggressive to curb the numerous illicit actions by criminals, which includes doctors, people who adulterate full strength drugs and sell them on the grey market as full-strength. There are so many other ways consumers are put at risk with prescription drugs. Ms. Eban’s exposé, Deadly Doses. is a must read for people who want to learn more.