Class warfare at the pharmacy [Virginian – Pilot]

By KEVIN HORRIGAN

WHEN I was a child, I spake as a child, I understood as a child, I thought as a child. When I got sick, my mom got me medicine at a local drugstore by handing a nice man a prescription and paying him a few bucks.

When I became a man, I put away childish things. When I got sick, I handed my prescription to a pharmacist's assistant in a white coat at a chain drugstore. Usually my insurance paid most of the cost.

Now that I am a middle-aged man, I have resumed childish tantrums. These occur whenever I have to refill a prescription. Unless it's something short-term like an antibiotic, I have to go online to order a 90-day supply. If there are no refills remaining, I must try to get in touch with the doctor.

Or maybe there's a billing snafu, some holdup among my health insurer, my health insurer's pharmacy benefits manager and my health insurer's flexible spending account manager, which wants more documentation than a French passport inspector.

My theory: They deliberately make things hard to discourage you from using your benefits.

I wind up in telephone hell, swearing at a computerized voice, wasting an hour of my time, no doubt spiking my blood pressure, increasing my anxiety and otherwise contributing to what doctors call "poor health outcomes."

I should not complain. Unlike 50 million other Americans, I have health insurance. It costs me and my company a great deal of money, but I have it. Plus, I have been blessed with good health, way better than I deserve.

On the other hand, if people who have been amply blessed don't complain, how are things going to get better for everyone else? The only people who possibly can be satisfied with the American health care system are those who haven't needed it lately.

Why are there so many middle-men? Exactly what are they contributing to our nation's health? The CEO of my pharmacy benefits management company last year received $22 million in total compensation. The CEO of my health insurance company received $102 million. Both of them cashed in a lot of stock options. But why should Americans' health be traded on the stock market?

For the past couple of years, I have been pen pals with a man I'll call Mr. Gower. He used to be a Main Street pharmacist in outstate Missouri. Mail-order pharmacies run by pharmacy benefit managers like Express Scripts and Medco crushed his business. They can buy drugs cheaper than he can, which means that health insurers sign exclusive deals with them.

But Mr. Gower complains that nobody other than the pharmacy benefits manager and the drug companies know how big a discount they're getting. They're allowed to operate in secret.

Meanwhile, he writes, "I know the margins for every pharmacy in the country. Literally. Trust me. I can prove it. Please believe me. This isn't used cars or furniture. We all pay the exact same price and are contracted to get paid the exact same dispensing fee (an average of $1.50 per prescription) which is our margin ... (t)he tobacco and lotto shop down the street has higher margins than me ... (t)han Wal-Mart ... than the hoity-toitiest upscale boutique pharmacy on the plaza. Margins have been universalized. And conceded. We lost. Now, we're simply fighting for access to customers."

And they're losing that fight. Even mighty Walgreens dropped its contract with Express Scripts on Dec. 31, claiming it was losing money on every prescription. Millions of Americans had to find a new drugstore. Most of them, Mr. Gower complained, "weren't even aware who their PBM was. And that's the way they want it."

Last summer, Express Scripts and Medco announced plans to merge, creating an entity that would fill one in every three prescriptions in the country. The Federal Trade Commission hasn't approved the $29 billion deal, and may not. When even Wal-Mart is complaining about predatory pricing, you know there might be a problem.

One does so hate to root against the home team. St. Louis-based Express Scripts would come out ahead in the deal. If there are "efficiencies" to be gained - people being laid off - most of them can be expected at Medco's headquarters in New Jersey.

In testimony prepared for a hearing of a U.S. Senate antitrust subcommittee in December, Express Scripts CEO George Paz used the words "waste" or "wasteful" 11 times. In an interview with the St. Louis Post-Dispatch last July, Paz boasted, "We're driving waste out of health care."

Not to go all class-warrior on you, but George Paz took home $51.5 million last year, according to Forbes. Not waste. Small pharmacists like Mr. Gower, "redundant" employees and niceties like service and convenience? Waste.

Maybe this is just the way it is. I'd take a chill pill, but I can't get the prescription refilled.

Kevin Horrigan is a columnist for the St. Louis Post-Dispatch. Email: [email protected].