Quest Diagnostics data breach puts health care security in the spotlight

http://www.foxnews.com/tech/2016/12/14/quest-diagnostics-data-breach-puts-health-care-security-in-spotlight.html

Quest Diagnostics joined the list of health care companies targeted by hackers this week when it announced a data breach that exposed the health information of about 34,000 people.

In a statement released Monday, the diagnostics specialist said that “an unauthorized third party” accessed a mobile app called MyQuest by Care360 on Nov. 26 this year. Data accessed included name, date of birth, lab results, and, in some instances, phone numbers, according to a Quest Diagnostics statement.

Quest Diagnostics said that Social Security numbers, credit card information, insurance and other financial information was not accessed. “There is no indication that individuals’ information has been misused in any way,” it said, in its statement.

The Madison, N.J.-based company said that it immediately addressed the vulnerability when it discovered the intrusion. “Quest is taking steps to prevent similar incidents from happening in the future, and is working with a leading cybersecurity firm to assist in investigating and further evaluating the company’s systems,” it added. “The investigation is ongoing and the unauthorized intrusion has been reported to law enforcement.”

Quest Diagnostics provides diagnostic services to one in three adult Americans each year, as well as half of the physicians and hospitals in the U.S.

The breach is the latest in a string of high-profile cyberattacks in the health care sector. Last year, for example, health insurance giant Anthem announced a massive breach that compromised the data of 78.8 million people.

In February this year, a Los Angeles hospital paid nearly $17,000 in bitcoins to hackers who disabled its computer network. In August Newkirk Products, which issues ID cards for health insurance plans, announced that a server containing personal information had been breached.  

Also this year, a hacker claimed to be selling 655,000 alleged patient health care records on the dark web, containing information such as social security numbers, addresses, and insurance details. The dark web, or darknet, refers to private networks built from connections between trusted peers using unconventional protocols. Dark Web is just one part of what is known as deep web – a vast network which is not indexed by search engines such as Google and Bing.

With the Quest Diagnostics breach, health care security has been thrust into the spotlight once again, according to Israel Levy, the CEO of security company BUFFERZONE.

“For hackers, developing a targeted attack is a significant effort, so it’s no surprise that they focus on healthcare organizations that store highly valuable patient data (significantly more valuable than credit cards on the Dark Web!),” he told FoxNews.com, via email. “[The Quest Diagnostics] breach is yet another indication that despite regulations like HIPAA, healthcare organizations still aren’t doing enough to protect themselves.”

The Health Insurance Portability and Accountability Act (HIPAA) aims to ensure the privacy of medical information.

Data released earlier this year by security researcher Ponemon Institute said that breaches could be costing the health care industry $6.2 billion annually.

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DEA Hurts Growing Industry and Exceeds its Authority Regarding Scheduling Controlled Substances; Enacts Final Rule Seeking to Make Any Extract of the Cannabis Plant a Schedule 1 Drug

http://www.einnews.com/pr_news/358098567/dea-hurts-growing-industry-and-exceeds-its-authority-regarding-scheduling-controlled-substances-enacts-final-rule-seeking-to-make-any-extract-of-the

As I have stated before.. our “shadow government regulators” tend to “go off the reservation” when we are between Presidents and Congress not being in session.  This is just a TEXTBOOK example of such.  I expect Kratom to be re-scheduled before Jan 20th to a C-I substance by the DEA and they will be blaming the FDA because they can’t provide “clinical evidence” of Kratom having a safe/therapeutic value.

DENVER, CO–(Marketwired – December 14, 2016) – On December 13, 2016, the DEA issued its Final Rule, “Establishment of New Drug Code for Marihuana Extract,” which serves to potentially devastate developing businesses and consumer, textile and manufacturing industries related to cannabinoids. Robert Hoban, a cannabis, cannabinoid and hemp lawyer and expert as well as an adjunct professor of law at The University of Denver, states the DOJ and DEA cannot unilaterally make law and schedule controlled substances, thus causing this Final Rule to exceed the DEA’s authority. Instead, such actions require an act of Congress.

As is the case here, the DEA is an agency that has previously sought to exceed its authority contrary to applicable law. It is anticipated that this “final ruling” and determination will be challenged both in court and administratively across the country. With 28 states that already have medical cannabis laws on the books, 8 states passing adult use laws in the November election, and numerous other states enacting industrial hemp legislation, the industry is up for the challenge of litigation against any government agency that operates contrary to prevailing law and enforcement policies.

The DEA’s Final Rule seeks to broadly expand and override existing definitions of controlled substances by newly creating a “Marihuana Extract” classification. The effect of this Final Rule appears to be incorporation of any and all cannabinoids from the Cannabis plant as a Schedule 1 controlled substance, despite the fact that many such cannabinoids are naturally occurring derived from non-“marihuana” portions of the plant or or from entirely different plants altogether. Problematically, the Final Rule fails to acknowledge there exist certain parts of the plant, and certain types of the plant — namely, industrial hemp — which cannot and should not be treated as a “Marihuana Extract.” Notably, the DEA has sought to unilaterally create laws before, and has lost, when challenged.

Hoban surmises, “The feeling is that this is an action beyond the DEA’s authority and we believe this is unlawful and we are taking a course of action for our clients. This Final Rule serves to threaten hundreds, if not thousands, of growing businesses, with massive economic and industry expansion opportunities, all of which conduct lawful business in reliance upon the Federal Government also acting pursuant to law, and as ordered by the Ninth Circuit in 2003 and 2004. We will see the Federal Government in court.”

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Prescription Drug Errors May Be Concealed by Nursing Home Management or Staff

www.marylandnursinghomelawyerblog.com/2016/12/prescription-drug-errors-may-concealed-nursing-home-management-staff.html

A pharmaceutical journal’s review of a recently conducted study concerning the prevalence of prescription errors in nursing homes found that while the total number of errors was relatively high, the prevalence of incidents that result in serious complications from the mistakes was surprisingly low. There could be several reasons for the higher-than-normal rate of prescription errors in nursing homes.

For one, nursing home residents are more likely than the general population to be receiving medical treatment that includes prescription medication. Nursing home staff may be responsible for dispensing out hundreds of medications from different doctors and pharmacies to various patients, who may not be verifying that they are receiving the correct medicine or dosage and could be harmed as a result. The study found that the level of serious incidents due to these errors was lower than expected, which the authors of the article attributed to the possibility that the errors that led to serious problems were being underreported or misclassified.

Nursing Home Residents’ Condition May Worsen for Various Reasons

Residents of nursing homes often have serious medical problems for which they are being treated while living at a nursing facility. If a prescription error is made by a pharmacy or employee of the nursing home and causes a significant injury, illness, or death, the nursing home employees and management may not wish to reveal the error leading to the resident’s complications and instead attribute it to a more common or accidental cause.

This pattern of blaming negligence on an unrelated cause for which the home would not be liable occurs frequently in nursing homes with all sorts of illnesses, injuries, and complications. If a resident or their family does not suspect a medication error resulted in harm to the resident, they may never check the records. Worse yet, the records may not have been properly kept to document which medications were actually dispensed to the residents and by whom.

Victims of Nursing Home Prescription Errors Are Entitled to Relief

Nursing home residents who are affected by prescription errors are often in a difficult position because it may be hard to find the cause of their health problems. If it is determined that a resident was given the wrong medication by the staff or a pharmacy as a result of a prescription error, the residents or their family may be entitled to damages. In cases in which the nursing home management actively works to conceal or destroy evidence of the true source of a serious error, victims and their families may be entitled to additional damages or other procedural benefits, such as the extension of the statute of limitations for filing a nursing home prescription error claim for relief.

Maryland Nursing Home Abuse and Prescription Error Attorney

If you or a loved one has suffered from an illness or injury while a resident at a nursing home, and you suspect it is a result of a prescription error or other neglect or abuse, you may have a case for damages against the parties responsible for the mistake. The Maryland prescription error and nursing abuse lawyers at Lebowitz & Mzhen, LLC may be able to help you seek the compensation your loved ones and you deserve. Our skilled Maryland, Virginia, and Washington, D.C. attorneys can fight to hold nursing homes up to the standard of care that they guarantee. We can take action to alleviate the harms caused by a serious prescription error or another act of neglect or abuse. At Lebowitz & Mzhen, we represent clients in Maryland, Northern Virginia, and the entire Washington, D.C. area in all nursing home abuse and neglect cases, including prescription mistakes. Call us toll-free at 1-800-654-1949 or contact us online to schedule a free consultation today.

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New DEA Rule Says CBD Oil is Really, Truly, No-Joke Illegal

https://www.leafly.com/news/politics/new-dea-rule-says-cbd-oil-really-truly-no-joke-illegal

The US Drug Enforcement Administration (DEA) this morning made CBD oil a little more federally illegal in a little-noticed bureaucratic maneuver this morning.

“This code,” wrote DEA Acting Administrator Chuck Rosenberg, “will allow DEA and DEA-registered entities to track quantities of this material separately from quantities of marihuana.” The move, the Register entry explained, is meant to bring the US into compliance with international drug-control treaties.

There is no major change in law brought about by the Register item. Rather, it serves to clarify and reinforce the DEA’s position on all cannabis extracts, including CBD oil. That position is: They are all federally illegal Schedule I substances.

CBD oil derived from hemp is now commonly available nationwide via web sites and mail order services. Those operations survive on the assumption that cannabidiol products below the legal threshold for THC percentage in hemp (0.3 percent or less) are technically legal.

Not so, says the DEA.

In the DEA comment on the entry, Rosenberg directly addressed the question: What if it’s only cannabidiol (CBD) and no other cannabinoids? The agency’s response: “For practical purposes, all extracts that contain CBD will also contain at least small amounts of other cannabinoids. However, if it were possible to produce from the cannabis plant an extract that contained only CBD and no other cannabinoids, such an extract would fall within the new drug code” and therefore remain federally illegal. In other words: The DEA is confident that it can find enough traces of other cannabinoids in your CBD oil to arrest and prosecute. And if they can’t, they still have the option of arresting and prosecuting based on the CBD oil itself.

RELATED STORY

Is CBD from Cannabis the Same as CBD from Cannabis?

Is your CBD derived from hemp? Doesn’t matter to the DEA. The new extracts classification applies to all “extracts that have been derived from any plant of the genus Cannabis and which contain cannabinols and cannabidiols.” Hemp is not a separate genus. (Although it may be a separate species; lot of debate on that point.) Legally speaking, hemp is simply cannabis with no more than 0.3 percent THC content.

The new rule seems to clarify the DEA’s position on hemp-derived CBD, which entered a legal gray area following Congress’ passage of the 2014 farm bill. That legislation allowed certain states to grow hemp in pilot projects, and blocked federal law enforcement authorities (ie, the DEA) from interfering with state agencies, hemp growers, and agricultural research.

What DEA Administrator Rosenberg seems to be saying with this clarification is: You may be able to grow hemp. But if you try to extract CBD oil from it, the DEA considers that a federal crime.

The rule did not contain any hint as to when the DEA will step into the 21st century and stop using the archaic version of the word “marihuana.”

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As Afghan Trade Booms, DEA Insists U.S. Heroin Is Mostly Mexican

http://www.breitbart.com/national-security/2016/12/14/afghan-trade-booms-dea-insists-u-s-heroin-mostly-mexican/

Only an estimated one percent of the heroin seized by law enforcement in the United States originates from the Southwest Asia region that includes Afghanistan, the top producer of opium and heroin in the world, reports the Drug Enforcement Administration (DEA) in its latest National Drug Threat Assessment.

The report comes as the Centers for Disease Control and Prevention (CDC) reveals that heroin overdose deaths in the United States have reached historic levels, surpassing gun homicides.

According to estimates from the United Nations, Afghanistan produced 4,800 tons of opium last year, 25 times more than when the United States invaded in 2001.

In comparison, Mexican drug cartels produced an estimated 70 tons of heroin.

The DEA insists that very little of the heroin from the Afghanistan region makes it into the United States because traffickers from Southwest Asia are unable to compete with Mexican drug cartels. These provide a higher potency, cheaper form of the deadly drug.

The DEA threat assessment report states:

Southwest Asian (SWA) heroin is, by far, the most common type of heroin produced in the world; however, its availability in the U.S. market is very low. In 2014, SWA heroin accounted for only one percent of the total weight of heroin classified by the [DEA], down from two percent in 2013, for several reasons.

The domestic supply of Mexico-sourced heroin is more than sufficient to satisfy current U.S. market demand. Moreover, Mexican heroin traffickers are able to keep the supply steady and reliable. This is evidenced by high availability levels in U.S. heroin markets and low retail-level prices.

The purity level of Mexican heroin is also higher than that produced in the Afghanistan region, which makes the drug more desirable to addicts in the United States.

Mexican cartels are reportedly the top suppliers of heroin in the U.S., and they are making a concerted effort to expand the deadly heroin market and increase the availability of the drug.

The DEA reports:

Heroin from all four source areas (Mexico, South America, Southwest Asia, and Southeast Asia) is available [in the U.S.] to varying degrees; however, analysis of DEA heroin indicator programs data, production and cultivation estimates, and seizure data indicates Mexico is the predominant source of heroin in the United States. South America is the second most common source of heroin.

Smaller amounts of Southwest Asian heroin are available in certain areas, but most Southwest Asian heroin supplies markets in Africa, Asia, and Europe.

The DEA estimates are based on seizures analyzed by the agency. In the report, the DEA acknowledges that its estimates only “provide a snapshot of the U.S. heroin market,” adding that “since not all heroin seizures in the United States are submitted for analysis, the source area proportions should not be characterized as market share.”

The DEA has noted in previous drug threat assessments that most of the heroin flowing into neighboring Canada primarily originates in Afghanistan, but it maintains that Mexico and, “to a lesser extent Colombia,” are the top providers of the fatal drug in the United States.

Heroin seizures along the Southwest border (SWB) have increased dramatically from 559 kilograms in 2008 to 2,524 kilograms last year.

The CDC reports that opioid deaths, primarily driven by heroin overdoses, surged in 2015, surpassing 30,000 for the first time in recent history.

Mexican cartels are expected to continue unrivaled as “the greatest criminal drug threat to the United States,” notes the DEA, adding, “No other group is currently positioned to challenge them.”

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Leading the Way? Northern California Cities To Embark On Soda Tax Spending

khn.org/news/leading-the-way-northern-california-cities-to-embark-on-soda-tax-spending/?

Asian Health Services, a community health center in Oakland’s buzzing Chinatown, sees about 6,000 dental patients a year. Hundreds of others are on a waiting list.

“We simply cannot meet the demand,” said Dr. Huong Le, the center’s dental director.

But now that voters have passed soda taxes in Oakland, Albany and San Francisco, Le and other Bay Area health providers are eyeing millions of dollars in revenue that could help more patients prevent obesity and dental decay.

The San Francisco Bay Area is trying to lead the way in putting soda tax revenues to good use, and cities around the country are watching closely. Some are considering soda taxes of their own.

“Soda taxes are going to be spreading like wildfire,” said Harold Goldstein, executive director of the Davis-based nonprofit Public Health Advocates.

Asian Health Services, a community health center, supports the city’s tax on sugary beverages in hopes that revenue collected from the tax will go towards combating tooth decay. (Ana B. Ibarra/California Healthline)

The city of Berkeley, also in Alameda County, passed the nation’s first such tax in 2014.

In San Francisco, the tax, which takes effect Jan. 1, 2018, is expected to raise up to $15 million annually. Meanwhile in the smaller city of Albany, the tax took effect immediately and is projected to garner $223,000 each year. In Oakland, the penny-per-ounce tax on the distribution of sugar-sweetened beverages is projected to bring in up to $8 million each year, some of which will be used for health education and prevention programs in schools and the community. It takes effect in July.

“We felt this was very important because of the dental needs we see within our patient population,” Le said. “We know there’s a strong link between tooth decay and sugary beverages.”

The link between sugary beverages and obesity, diabetes and tooth decay is well-established. People who drink one or two cans of sugary drinks per day have a 26 percent greater risk of developing type 2 diabetes, according to one study by the Harvard School of Public Health.

A separate study found that for every 12-ounce soda consumed by a child each day, their odds of becoming obese increased by 60 percent. Soda also has been tied to dental erosion which can lead to cavities, according a 2009 study. The most frequent sources of erosive acids are soft drinks like cola, the study found.

In a report earlier this this year, an oversight commission criticized the state’s dental program for the poor, finding that California is seeing an “epidemic of tooth disease in which toddlers by the thousands have mouthfuls of cavities, children and adults are plagued with toothaches.” This is made worse when families struggle to get an appointment with a dentist, the report said.

In Oakland and the rest of Alameda County, one third of children consume one or more sugary drinks a day.

Oakland’s city council will establish a community advisory board to oversee the distribution of soda tax money, and local health advocates want to make sure they’re well-represented, Le said.

Goldstein said the fact that measures recently passed in all three Bay Area cities by a notable margin — in Oakland the tax was approved with 61 percent of the vote — shows that Californians grasp the harmful effects of sugary drinks.

Soda taxes, he said, are significant because they raise money to be used in the fight against obesity and other chronic conditions, and they reduce the consumption of sugary drinks.

In Berkeley’s low-income neighborhoods, the consumption of soda and other sweetened beverages decreased by 21 percent in the months after the 2014 tax began, according to a UC Berkeley study.

The study also showed a 63 percent increase in the consumption of bottled or tap water. It is not clear whether these results are due to the higher retail prices of sugary drinks or to the increased awareness on the health effects associated with the beverages, the study notes.

Goldstein said similar outcomes can be expected in Oakland, San Francisco and Albany, as well as in Boulder, Colo., where voters also passed a similar tax in November. This drives up the total number of cities with soda taxes to six — Philadelphia passed a 1.5 cents-per-ounce tax in June.

The American Beverage Association, which has lobbied heavily against soda taxes nationwide, doesn’t see a movement. Spokeswoman Lauren Kane said that 43 soda tax proposals have been rejected since 2008.

The association will continue to focus on reducing calories and sugar in beverages, Kane said. These taxes, Kane said, are only a Band-Aid solution to the larger national obesity problem.

But they are a start, said Elizabeth Bautista, a health educator at La Clinica, a health center in Oakland’s Fruitvale neighborhood, home to the city’ largest Latino population.

Bautista and 15 volunteer health educators known as promotoras engaged their community in the soda tax discussion by going door-to-door and making hundreds of calls to registered voters.

The challenge now, Bautista said, is to continue to motivate people to choose alternatives to sugary drinks.

The promotoras often share stories of what they see in the field: toddlers with soda in their bottles, and families walking out of dollar stores with grocery bags full of juices and sports drinks.

“It’s a serious problem in our community, and there is so much misinformation floating around,” Bautista said. She often hears from families that fruit-flavored sodas are not as harmful as dark sodas. “That of course is not true; that’s a myth we have to eliminate,” she said.

Maria Reyes, one of the promotoras, said the clinic is starting additional nutrition and physical activity classes — a healthy cooking class, for example, is expected to be of great interest. These are the type of activities that could be expanded by funds from the soda tax, Reyes said.

Reyes believes soda tax advocates in Oakland learned a lot from battles lost in other California cities, such as Richmond and El Monte, where voters rejected soda taxes in 2012.

“We learned that we needed a coalition and that we needed to focus the discussion on diabetes and obesity prevention,” Reyes said.

The promotoras say they are now hearing from community groups in Contra Costa cities interested in following in their footsteps.

“This is a big win,” Reyes said. “Once we start seeing results, I think more cities will join us.”

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Lilly rolls out insulin discount program

http://www.drugstorenews.com/article/lilly-rolls-out-insulin-discount-program?

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Physician-Assisted Dying: Our Society Needs It, Says MD

http://www.medscape.com/viewarticle/872510

Editor’s Note: Arthur Caplan, PhD, interviewed Timothy Quill, MD, as part of the Medscape video series Both Sides Now. Only a portion of Dr Quill’s interview could be included in the video because of time constraints. Here, we are posting the interview in its entirety. In the coming weeks, we will post interviews with other speakers in that video.

Arthur L. Caplan, PhD: It’s my great pleasure to have as a guest on this difficult topic one of the leading voices—for many decades—in physician-assisted dying, Dr Tim Quill. He is a professor at the University of Rochester School of Medicine. He is also the director of the Center for Ethics, Humanities and Palliative Care, and he is board certified in palliative care. It is a pleasure to welcome you to the program. I can’t think of a better voice to listen to about some of the complexities of these issues. Thanks for coming.

Timothy E. Quill, MD: Glad to be here. Thanks for having me.

Physician-Assisted Dying vs Physician-Assisted Suicide

Dr Caplan: Let’s have you do a little cleaning up of the landscape. What is the difference between physician-assisted dying and physician-assisted suicide? Both terms are around. How do you differentiate those in your mind?

Dr Quill: Many times, the two terms are conflated. Those who believe that this should be a legal option prefer to use the language “physician-assisted dying” rather than “physician-assisted suicide.” Why is that? Well, suicide equates the act with mental illness and with people who have other choices. An important fact is that other languages have more than one word for suicide. There can be rational suicide. There can be heroic suicide, the warrior jumping on a bomb. And there might be suicide for mental illness. The opponents of physician-assisted death would like it to be called “physician-assisted suicide” because they want to equate it in some sense with mental illness.

Dr Caplan: When you say mental illness, do you mean depression?

Dr Quill: Depression, psychosis, an act that makes no sense and could be prevented by good medical care. People who are advocates see it as a possible rational approach when suffering is very hard and there aren’t a lot of other good options. We know that it can be rational because we’ve met people who are in that circumstance who have asked for our help.

Dr Caplan: Do you think there’s a subtle difference in terms of the role of the doctor in physician-assisted dying? People are going to die. For physician-assisted suicide, maybe they’re not terminally ill.

Dr Quill: I suppose it could be the lack or the potential absence of terminal illness. Physicians are also regularly involved in helping people to die. I work in palliative care in hospice. You can take a frame on that to say that we’re at least in part helping people to die better. That’s what we do. So, you want to be sure that you know what we’re talking about as well. There is some issue of clarity that could be an argument in this debate in terms of language.

Palliative Care

Dr Caplan: Your field has evolved a lot over the past couple of decades. I think it would be fair to say that you’ve been a pioneer in palliative care as well. We’ve certainly seen palliative care spread out into American healthcare. Not that it’s where it should be everywhere, but it’s certainly available starting earlier for many people. Some physicians are going to say, “Why do we even have this discussion about assistance in dying if we have palliative care?” Continue Reading

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WSJ Publishes Op-Ed on Not Guilty Verdict for Pain Doctor Obtained by Howard Cooper, Benjamin Wish and Hillary Lehmann

http://www.toddweld.com/wsj-publishes-oped-on-not-guilty-verdict-for-pain-doctor-obtained-by-howard-cooper-benjamin-wish-and-hillary-lehmann

The Wall Street Journal on June 13, 2015, published an Op-Ed piece written by prominent Boston criminal defense and civil rights attorney Harvey Silverglate commenting on the recent acquittal of Dr. Joseph Zolot and Nurse Practitioner Lisa Pliner on multiple counts of alleged violations of federal conspiracy and drug distribution laws.

Dr. Zolot was represented by Todd & Weld attorneys Howard M. Cooper, Benjamin J. Wish, and Hillary A. Lehmann and was acquitted after a 26-day trial.

In the WSJ opinion article, attorney Silverglate questions the legitmacy of federal drug prosecutors using drug laws to prosecute pain physicians where there is little, if any, guidance given to physicians about the line between legitimate medical treatment and improper prescribing.

“This prosecution,” Silverglate writes, ” shows why drug warriors need either to clarify the currently indecipherable line between treating pain and unlawfully feeding drug addicts’ habits, or get out of the business of policing and terrorizing physicians. Unfortunately, the government uses legal ambiguity for tactical advantage and will not readily clarify the lines it expects doctors to follow at their peril.”

Dr. Zolot was a Needham, Mass.-based pain medicine physician whose office was raided by the government in May 2007, after which he was indicted on multiple counts of unlawfully prescribing opioids such as OxyContin, Fentanyl and Methadone to patients. Nurse Pliner was accused of participating in the drug dealing operation. A first trial resulted in a hung jury, after which U.S. Attorney Carmen Ortiz decided to retry the case.

Following his acquittal, Dr. Zolot publicly expressed his hope that the verdict would help doctors feel less intimidated by the federal government in treating patients who are in chronic pain with available pain medications.

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Pharmacy benefit managers face crack down on drug pricing

http://www.healthcarefinancenews.com/news/pharmacy-benefit-managers-facing-crackdown-drug-pricing

New coalition, health plans, employers and legislators will want greater assurances that PBMs are controlling costs.

The financial future of pharmacy benefit managers is uncertain as payers, legislators and regulators focus on rising drug prices, according to Moody’s Investors Service.

The rising price of drugs such as Mylan’s EpiPen has resulted in a  firestorm of scrutiny from legislators and PBM customers.

[Also: Mylan will pay $465 million settlement over CMS classification of epipen for Medicaid Drug Rebate Program]

Humira and Enbrel, popular anti inflammatories that represent a significant portion of the drug spend, saw double digit increases, even after rebates, between 2014 and 2015, Moody’s said.

Because of the growing public attention, manufacturers are expected to moderate drug price increases over the coming year, a factor confirmed by large drug distributors and some drug manufacturers.

However, specialty drugs will account for a larger portion of the nation’s drug spend, due in part to innovation and higher pricing.

[Also: Healthcare spending, driven by prescription drug costs, outpaces economy]

The current PBM model could be altered or undermined by changes proposed by employers, customer groups and legislation that is aimed at drug companies, or even a slowing of brand drug price inflation, Moody’s said.

Earnings guidance is down because branded drug inflation will moderate between 7-9 percent, from around 10 percent.

Pharmacy benefit managers feeling the heat include Express Scripts, CVS Health and Optum RX, which is part of UnitedHealth Group.

Both Express Scripts and CVS Caremark will continue to exclude certain drugs from their formularies to help clients cut drug spending, Moody’s said.

The number of drugs on the PBM formulary exclusion lists for both CVS health and Express Scripts has risen from 76 and 48 respectively, in 2014, to 154 and 85 for 2017.

The problem is, Moody’s says, that with limited transparency on actual pricing and discounts and rebates, it’s not easy to determine if PBMs are making formulary decisions that are best for their clients or for themselves.

PBMs have disclosed little about the profits gained from placing certain drugs on their formularies, Moody’s said.

PBMs have said they pass on the lion’s share of the rebates they receive to their clients.

“We estimate that Express Scripts keeps about 15 percent of the rebates,” Moody’s said.

But none disclose this information.

A Health Transformation Alliance has highlighted employer concerns regarding rising drug costs. The coalition of more than 20 high-profile employers focuses on making the healthcare benefit market most cost-effective by changing how PMBs purchase and pay for prescription drugs.

[Also: Coca-Cola and AMEX among major companies to form Health Transformation Alliance to combine population health data]

They will do this by renegotiating contracts with PBMs, Moody’s said. Branded drug price inflation will slow, but the impact on PBMs depends on contract terms.

The coalition has yet to release firm proposals, but are considering fee for service payment models, in which the PBM client would pay for the cost of the drug, plus an agreed upon fee.

Legislative proposals include allowing the federal government to negotiate drug prices for seniors covered under Medicare Part D, and modifying the reimbursement structure for dual-eligible patients.

In January 2015, a bipartisan bill introduced in the House would help pharmacies receive appropriate levels of reimbursement from PBMs. Independent pharmacies had argued they were losing money because they were being reimbursed by PBMs for less than it cost them to buy the drugs.

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