New York seeking $2B from opioid industry
It wants the money for businesses and individuals, perhaps in the form of health insurance premium discounts. DFS has started the process by issuing subpoenas and requests for documents. It plans to hold hearings designed to shed light on the problem and inform consumers of what's going on.
DFS is acting under its authority as the regulator of health insurance in
Gov.
Lacewell alleged that the opioid industry, anticipating that just as Medicaid would cover costs, the health insurance industry would pay much of the costs.
"Those costs are passed on to consumers in the form of rate increases and over the past 10 years the dollar figure for what consumers are bearing, the cost, is
Lacewell said her department could seek rebates for businesses and consumers for a portion of what they paid in past premiums, discounts on future premiums or cash settlements. She said legal action could be taken in addition to DFS using its existing authority as regulator of the insurance industry.
"The numbers are based on the over-prescribing and what percent of that was covered by commercial health insurance. Understand, of course, that those costs are now baked into the rate increases that were passed on to the consumers, so recoveries that we obtain in that regard will be factored into whether it's rebates or lower rates in the future. We have to address this as a whole stream of rates that consumers are paying across the state," she said.
In addition to the opioid manufacturers and drug distributors, DFS is going after a segment of the industry identified as pharmacy benefit managers (PBM). The PBMs are third parties acting as go-betweens, working with manufacturers, distributors and insurance companies to set drug formularies in prescription drug coverage under insurance policies. Formularies define which drugs will and will not be covered by a plan, how much insurance companies will pay for various drugs and what patients will have to pay as out-of-pocket co-payments. PBMs also negotiate rebates and credits paid by manufacturers and distributors. DFS says it has information that some PBMs may have been paid rebates by opioid manufacturers, wholesalers and/or distributors for placing opioid prescription drugs in formulary tiers with lower co-pays, making their drugs more attractive in the marketplace.
Lacewell emphasized that her department has consumers in mind.
"They should not have to carry the burden of this scheme. The health insurers have already been compensated by the consumers. It's the consumers who are out of pocket and left to carry the bag as usual. They're not going to walk away with a
Thirty-four opioid manufacturers and distributors, including
"I've seen a number of schemes and frauds, but the opioid scheme is as diabolical, as brązem as obnoxious and as offensive as anything I've seen," Cuomo said. "These drug companies knew what they were doing. It was not accidental It was an industrywide conspiracy."
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