Berks County Medical Society Medical Record Summer 2019 - 13

James Helms, Jr.,
PharmD, BCPS
Clinical Pharmacy
Specialist, Reading
Hospital

As a pharmacist in the hospital, I have an opportunity
to participate in the formulary process. During this
process, consideration is made to balance best practice
with medication cost to provide the best care for our
patients. Many newer medications are expensive (even
CVS Caremark is listed on the Fortune 500 list of 2018 as
having $198 billion in revenue. To put that in perspective, Google
was listed at only $110 billion.

for the hospital) but if best practice recommends use of

The following is an example of an insurance plan rejection that
does not follow logic. The drug albuterol HFA inhaler has three
brand products available: Ventolin HFA, ProAir HFA and Proventil
HFA. Recently a generic became available for each one. A physician
or other prescriber would probably assume that the best choice in
terms of insurance coverage would be the generic, due to its lower
cost compared to the brand name drug. This is not the case. Several
insurance plans will not cover the generic. They will only cover
the higher-cost brand name medication. Why? Rebates. A rebate
is a discount on a medication a drug manufacturer gives a PBM
in return for the PBM agreeing to cover the drug manufacturer's
product. In this case the manufacturer of the brand product gives
the PBM a rebate worth more than that available for the lower price
generic.

Expensive medications are often added to formulary

these medications, they become part of our formulary.
with caveats to limit or monitor how they are used. In
addition, follow up medication use evaluations are
performed to be sure they are being used appropriately.
Hospital acquisition costs may vary from the outpatient
pharmacy cost due to various contracts or programs
that the hospital participates in. It is important to
note that the cost of medications in the hospital does
not directly affect the patient's hospital bill. Insurance
companies generally pay a specified amount for a

Rebates also incentivize the brand manufacturers to raise the
list price of their products so that they can have their drug included
in a PBM's formulary. The rebate is even higher if the product is
'preferred' status, or a lower copay to the patient. PBMs generally
get to keep the rebates without passing them along to their members
because there is no transparency and little regulation. This is one of
the leading causes of high drug prices.

hospital stay.

Recently several State agencies have started to look into the
rebates affecting their Medicaid prescription plans. The findings are
alarming. They found that PBMs overcharge states and fail to pass
along rebates and discounts. Specifically, the Ohio State Auditor
found that the PBM OptumRx earned over $223 million between
April 2017 and March 2018. Kentucky found that hidden PBM

due to inability to pay for medications. Medication

If I could choose one area to advocate for, it would
be medication costs to the public. Although outpatient
medication costs do not contribute directly to the cost
of hospitalization, a subset of patients are not adherent
non-adherence has been associated with poor
healthcare outcomes (including hospital admission).

continued on page 15
SUMMER 2019

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Berks County Medical Society Medical Record Summer 2019

Table of Contents for the Digital Edition of Berks County Medical Society Medical Record Summer 2019

Berks County Medical Society Medical Record Summer 2019 - 1
Berks County Medical Society Medical Record Summer 2019 - 2
Berks County Medical Society Medical Record Summer 2019 - 3
Berks County Medical Society Medical Record Summer 2019 - 4
Berks County Medical Society Medical Record Summer 2019 - 5
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