Gathering follow-up information for specific switch programs "is not a bad idea at all," Toan said. It would be "probably best done on a selected basis," he suggested: a switch between the competing lisinopril brands (Prinivil and Zestril) is unlikely to need monitoring, while a program involving new therapeutic classes may require more careful tracking. Comments by Sheehan suggest that any form of rebate may be suspect.
Sheehan cited the terms of the 1996 pharmacy class action settlement, which requires the settling manufacturers (including Schering-Plough) to offer equivalent rebates for equivalent effects on market share. "When I start seeing rebates for movement of market share, I have more problems" with pharmacy interventions, Sheehan declared.
Toan defended the rebate system: "The formulary and rebating process is a free-market activity to establish a fair price for the drug....It is a logical extension of a free-market approach." Express Scripts pointed out that the PBM business model can be found at every level of government from state Medicaid programs to the Veterans Affairs health system and the Federal Employees Health Benefit Plan. Given the interest in using PBMs to manage a Medicare prescription drug benefit, the PBM model appears to have a "fair amount of acceptance" even "at the highest level of the federal policy making." During the National Congress on Pharmaceuticals, Sheehan suggested that the interest in a PBM role in Medicare will lead to "a whole new role of regulation as opposed to prosecution." As "Congress becomes aware of these issues, I don't think they are going to sign on to a $20 bil. a year drug program" without addressing them, Sheehan declared. One PBM development that Sheehan indicated support for is the move towards the use of physician connectivity to eliminate pharmacy interventions altogether. As a result of his investigation, Sheehan predicted, "a lot of therapeutic interchange" will be pushed "to the front end and make it more an academic detailing context and less a five guys in a boiler room making phone calls 3,000 miles away." Express Scripts is an enthusiastic participant in the race to develop physician-based interventions (see related story, p. 15). In August, Sheehan projected that a case would be brought within a year. A common prosecutorial tactic is to find a potential defendant who may be more willing to settle because of a pending business transaction. PCS , which Rite Aid is eager to sell, is one logical candidate. If Schering-Plough decides to pursue a merger ahead of the Claritin patent expiration, it could also make an inviting target.
Tk......if you know so much, why don't you know this? It has been discussed ad nauseum. The sites that have earnings for RAD on the calendar, are going by the normal years date. Remember this has been the year in hell for us shareholders.
for all uninformed shorts searching for any shread of hope to force RAD lower, pls keep plugging the PCS thing b/c you dont' know what you're talking about--pls keep shortin' b/c you will only have to cover and force up RAD.
I use to work at PCS and am familar with the practices stated in the subpenoa.
#1--the pharma companies are the ones liable for medicaid best price issues, not PBM's
#2 the switching/incentive/formulary practices have been around for about 10 yrs, starting with Medco and Caremark. There's nothing here. The only time you get in trouble is when you get DIRECT payments for switching, something Bayer did, for example, with ADalat CC. They got nailed. No one does this.
#3 enforcing the formulary (getting MD's to write the formulary drugs) is WHY pharma companies pay rebates--if you don't have formulary enforcement, your just Joe's pharmacy and we've already been thru that legal morass with indep pharmacies and pharma companies.
as to why PCS was not sold, the mkt has tanked recently for potential suitors. Any PBM like Advanced wouldn't care about the subpenoa (they may have even got one).