In 1995 Clara Davis of Toone, Tenn., suffered from a painful peptic ulcer. Her gastroenterologist, Dr. Richard Brownstein, prescribed prilosec, but that drug was no longer covered by her insurer, Blue Care of Tennessee. Instead, the pharmacy gave Davis cimetidine, one of the drugs Blue Care covered. As her doctor srestled with the insurer's appeals process, Davis was switched back and forth between the two drugs.
When Davis was on Prilosec, her ulcer healed, but on cimetidine, it flared up again. Several months later, the ulcer required surgery that removed 35 percent of Davis's stomach. She suffered a stroke during recovery, and now has partial paralysis.
Something chilling is happening in doctors' and pharmacists' offices nationwide. Increasingly, medical professionals are losing control of patients' prescritpions. Supplanting them are big drug companies, working in concert with managed care plans and little-known but increasingly powerful behind-the-scenes outfits called pharmacy benefit managers. These PBMs oversee prescription plans for health insurers.
The business stakes are high. The ten largest PBMs process some 817 million prescriptions a year, more than a third of the estimated 2.3 billion written for managed-care patients. But the human stakes are even higher. says Dr. Richard Wein, director of surgery at the General Hospital Center in Passaic, N.J.: "We are allowing drug companies and their intermediaries to distort the practice of prescribing medicine. And we are letting it happen without knowing what the effects will be on patient health."

Over-the-Top Tactics. For five years Marie Willaims, a 56-year-old school-bus driver in Richmond, Va., had used Zestril to control her high blood pressure. But when she went to get a refill on January 4, her pharmacist said that her new health insurance, CIGNA, no longer covered Zestril, made by Zeneca, and would substitute Prinivil, made by Merck. CIGNA says both drugs are equally effective, though a spokesman concedes that the company has a "financial arrangement" with Merck.
Within a few days Williams knew something was wrong. "My head didn't feel right, and I was driving a school bus with 65 kids aboard," she says. After suffering through a week of disorientation on the new medication, Williams complained to her doctor, who persuaded CIGNA to make an exception and cover Zestril for her.
What Williams didn't know was that in the new world of prescription medicine, drug makers seeking to increase their products' market shares now deploy a diverse arsenal of strategies--most hidden from patients---that are radically altering how we obtain prescriptions.
Pharmacists and doctors are regularly bombarded with letters, calls, and faxes--many offering cash payments to pharmacists--urging them to stop prescribing certain medications in favor of others. Earlier this year, for example, an official of the North Carolina Mutual Wholesale Drug network, a group of 500 retail pharmacists, sent a letter to the membership explaining a program offered by the Glaxo Wellcome corporation: if a pharmacy dispenses the company's Flonase to 34 percent of patients seeking allergy medicine, the pharmacy gets an eight-percent rebate. "Kickback is not a nice word, but that's what rebates are," says Dr. David Massanari, a family practitioner in Sanford, Maine.
Other sales tactics are over the top. In one aggressive drug-marketing program, PCS Health Systems of Scottsdale, Ariz., the nation's largest PBM, launched a substitution effort called Performance Rx. Under it, PCS pays pharmacists bonuses of as much as $12 a prescription to recommend drugs on its own list. (By contrast, pharmacists may earn a profit of less than 50 cents for filling a typical prescription.) Pharmacists who do not meet specified quotas for filling prescriptions run the risk that PCS will drop them from the Performance Rx program.
Paul Hushing, owner of Lakeland Pharmacy in Ronkonkoma, N.Y., does not participate in Performance Rx. Nevertheless, he spends at least two hours a day asking doctors to switch prescriptions: "I can't give it if it's not covered by their HMO," he says. "And if I don't get them to make substitutions, the managed-care plans and PBMs will take their business away from me. I could lose 95 percent of my customers."

HMOs started using pharmacy benefit managers, a new breed of bureaucratic middlemen, in the mid-'80s. One purpose was to restrain rising prescription-drug costs by forcing drug companies to vie for the right to market their products to health-care plans.
PBMs did help lower prescription costs. But then in the early '90s, the drug makers wised up. "They decided that if they couldn't beat them, they would buy them," says stephen Schondelmeyer, professor of pharmaceutical economics at the University of Minnesota.
Indeed, since 1993 drug companies have acquired the nation's three largest PBMs, at a total cost of $12.9 billion. In November 1993 Merck purchased Medco Containment Services, which onversees prescription benefits for 50 million members; in May 1994 SmithKline Beecham acquired Diversified Pharmaceutical Services (30 million members); in November 1994 Eli Lilly bought PCS Health Systems (more than 56 million members).
Simultaneously, drug companies began crafting multi-million-dollar deals in which they paid PBMs to recommend their products. "It's as though all the vendors that sell you soft drinks were bought by Coca-Cola, so they all switch to selling Coke products," says Dr. Wein.
Says Schondelmeyer: "PBMs are now owned or paid by the drug companies. That's an inherent conflict."

Jumping Through Hoops. One result of the drug-company rebate deals and PBM tactics: the list of drugs your insurer will pay for is narrowing--and tilting ever more toward specific drug makers' products.
John Mainini, 68, of San Bruno, Calif., used nitroglycerin patches for his heart condition. But early this year his FHP insurance plan decided it would no longer automatically cover nitroglycerin in patch form, preferring instead that patients take less-expensive capsules.
Mainini's family physician and his cardiologist went along with the change. But shortly after the switch, while walking out of a movie, Mainini felt chest pains and turned ashen. As his wife, Cathy, drove him home, she thought, My God, he could die right here. Once home, he swallowed medication to relieve his pain, and rested until he recovered. Later, his doctor increased his dosage to four nitroglycerin pills a day, but that gave Mainini severe headaches. Now, he says, "I'm trying to get by on three. If I feel something coming on with my heart, I take one more, and I take Tylenol for the headaches."
Dr. Philip Alper, Mainini's family physician, explains: "I cannot keep writing letters to get coverage for my patients every time their prescriptions get switched. John has decided to make a go of his current prescription. There is an enormous, unreimbursed clerical and professional cost to fighting all the intrusions the PBMs make."

Short-Term savings. A recent study indicates that reducing access to a wide variety of prescription drugs could actually increase long-term health-care costs. That's because patients who don't get the prescriptions they need may end up using more drugs and going to doctors and hospitals more frequently. The study released in March 1996 tracked almost 13,000 patients, suffering from at least one of five diseases, for up to a year of managed care. "We found that more limited access to drugs in managed-care settings was associated with increased use of drugs, and thus with higher costs, as well as higher rates of doctor, emergency-room and hospital visits by patients," says Susan Horn, the lead author of the study and senior scientist at the Institute for Clinical Outcomes Reserach in Salt Lake City.
Even if you never have trouble with your prescriptions, the brave new world of prescription medicine may be costing you in higher taxes. Forty-six states are shifting toward managed-care organizations in their Medicaid programs; most of these organizations will probably use PBM to administer their prescription benefits, according to the National Association of Chain Drug Stores in Alexandria, Va.
More states are looking for ways to get short-term savings, and restricting access to prescription drugs is a way to do that. That contains drug costs in the short run but inflates costs in the long run.
When financial pressures and health-plan policies combine to prevent your doctor and pharmacist from furnishing you with your first-choice drug, here's what you can do:

Ask you insurer how you can request reimbursement for drugs that are not covered. To find out which drugs are included on the list of medications your health plan will pay for, call your plan's administrator of pharmacy benefits.

Question any changes in your drugs. If your doctor or pharmacist raises the possibility of switching you to another drug, ask questions. Among the most important: Why is a change needed? What is the price of the new drug? are the insurer's prescription benefits administered by a company owned or allied with the maker of the new drug? If you are not satisfied with the answers you get, insist that your doctor help you get the drug that works best for you.

Report your experience. If you have suffered because you were switched to a different presciption, let the FDA know. Call its MedWatch program (800-332-1088), which monitors patients' adverse reactions to drugs.

From MONEY, Peter Keating. RD Nov.97

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