United Healthcare charged Cancer patients 5000%

[BrunoMars420]

UnitedHealth charged cancer patients 5000%, bombshell FTC report claims

Wholesalers made huge profits on two specialist cancer drugs, the FTC said

www.newsweek.com

America's largest health care company, UnitedHealth, made profits of more than 5,000 percent on a lifesaving leukemia drug, according to a Federal Trade Commission report.

What To Know​

A new Federal Trade Commission (FTC) report found that the three largest Pharmacy Benefit Managers (PBMs) have taken in large profits on lifesaving medicine for heart disease, cancer and HIV.

The FTC report found that from 2017 to 2022, three PBMs—UnitedHealth Group's Optum, CVS Health's CVS Caremark and Cigna's Express Scripts—marked up prices at their pharmacies by hundreds or thousands of percent.

By doing so, they collectively added $7.3 billion in revenue, the report states.
Figures released with the report show that in 2022, the final year of the study, two cancer drugs had the highest markup.

Gleevec, the generic form of the leukemia drug Imatinib, was collectively marked up by the three providers by 5232 percent in 2022. For patients using Medicare, the markup was 4154 percent.

For Zytiga, the generic form of the Abiraterone prostate cancer drug, that markup was 2299 percent commercially and 1533 percent for those on Medicare.

UnitedHealth recorded revenue of $372 billion in 2023, making it about the same size as Apple.

The company released its fourth-quarter results on January 16, which beat analysts' profit expectations based on quarterly revenue of $100.8 billion, up 7 percent year-on-year.

A spokesperson for Cigna's Express Scripts told Reuters that the report's findings were misleading and that the calculations are based on a subset of medications that represent less than 2 percent of what the company spends on medications in a year.

CVS Vice President David Whitrap, in a statement: "How many more interim reports will it take before the FTC includes the mountain of data that refutes these few outliers? We've provided terabytes of data in compliance with their requests, and virtually none of that data is reflected in this report."

Pharmaceutical Care Management Association Vice President of Public Affairs Greg Lopes, in a statement: "It's clear this report again fails to consider the entirety of the prescription drug supply chain and makes sweeping assertions about the role of PBMs disconnected from a full appreciation of their critical cost-saving role for employers, unions, taxpayers, and patients."

What Happens Next​

The FTC is considering its position and may take legal action.

FTC Chair Lina M. Khan said in a statement that the FTC should act swiftly to stop illegal conduct. However, the report states that the issues highlighted do not indicate that any illegal conduct has occurred.

 

[BrunoMars420]

Soooooo, what should the public do in this situation?

 

[5545]

Demand access to the terabytes of data that weren't included in the report, or feign outrage on social media.

 

[Tiny Hands Trump]

Soooooo, what should the public do in this situation?

Luigi recommends:

 

[Aardvark86]

I am going to take a closer look at this report today. I am no fan of pbms but I will say there is something that doesn’t smell quite right in their word choices. I am also wondering whether part d benefit design reforms may actually alleviate the scenario they describe for specialty genetics

 

[Hawkfan_08]

I'm usually not for government intervention on things but if there was a time and a place to regulate this stuff for the benefit of the people it's now and it's big pharma.

 

[BrunoMars420]

I am going to take a closer look at this report today. I am no fan of pbms but I will say there is something that doesn’t smell quite right in their word choices. I am also wondering whether part d benefit design reforms may actually alleviate the scenario they describe for specialty genetics

Please do and give a a nice synopsis of it

 

[hawkeye54545]

 

[RagnarLothbrok]

I think it’s time for Trump to unveil his “something terrific” healthcare plan.

 

[tumorboy]

Private Healthcare system is working exactly as it’s designed. To keep their costs as low as possible. While keeping revenues as high as possible. That’s capitalism.
This shouldn’t be surprising.

 

[The Tradition]

So United's PBM increased the price by 5000% which was then paid by United's health insurance division?

 

[TennNole17]

""How many more interim reports will it take before the FTC includes the mountain of data that refutes these few outliers? We've provided terabytes of data in compliance with their requests, and virtually none of that data is reflected in this report."

Do we trust the government, or the insurance companies. Neither?

 

[BrunoMars420]

""How many more interim reports will it take before the FTC includes the mountain of data that refutes these few outliers? We've provided terabytes of data in compliance with their requests, and virtually none of that data is reflected in this report."

Do we trust the government, or the insurance companies. Neither?

Give me the US governments all day over those scumbags

 

[Tom Paris]

""How many more interim reports will it take before the FTC includes the mountain of data that refutes these few outliers? We've provided terabytes of data in compliance with their requests, and virtually none of that data is reflected in this report."

Do we trust the government, or the insurance companies. Neither?

I trust that the incoming administration will do absolutely nothing to even attempt to address our healthcare racket. Trump would have the votes but he doesn't truly give a damn if we get ripped off, considering he will be grifting from taxpayers again anyway.

 

[RagnarLothbrok]

Do we trust the government, or the insurance companies. Neither?

Neither.

That’s why the Boomers voted Trump—to ensure the government keeps its hands off their Medicare.

 

[RagnarLothbrok]

Give me the US governments all day over those scumbags

I’m someone who is for minimal government, but I have also known for years private health insurance is a scam. That’s why I was so adamantly opposed to Obamacare.

The government sucks, but private health insurance is highway robbery. When what stands between people and healthcare is a system that rakes in billions every quarter, it’s time to take the for-profit motive away from the people handing out admission tickets to doctors’ offices and cancer clinics.

 

[onlyTheObvious]

Soooooo, what should the public do in this situation?

Seems like an easy first step is make laws where drug companies can’t change different people/countries different amounts.

Still would like to see one state take a stab at public insurance. Combination sales tax/income tax that covers everybody. Guessing the math doesn’t work.

 

[millah_22]

Soooooo, what should the public do in this situation?

 

[tumorboy]

Seems like an easy first step is make laws where drug companies can’t change different people/countries different amounts.

Still would like to see one state take a stab at public insurance. Combination sales tax/income tax that covers everybody. Guessing the math doesn’t work.

Not sure how insurance companies are allowed to be vertically integrated. UHC owning Optum and Hospitals/Clinics is nuts.

 

[RollingBallofButcherKnives]

Soooooo, what should the public do in this situation?

Why, give them a nice tax break, obviously…..

 

[Aardvark86]

So, without having looked at all of the appendicies, for those of you who want to nerd out a little despite the tldr... Full disclosure, imo, pbms are intermediary organizations that suck cost reductions out of the system without passing much of it on to patients in any material way.

1. Some preliminary notes.
a.to be clear, none of what is described is unique to united or its pbm optum
b. the findings of the two referenced drugs actually arose in a previous report, so a bit of lazy reporting here.

2. The report basically says a couple of things (with my reactions):
a. pbm markups on generic specialty drugs dispensed by their pharmacies (measured by the difference between the amount paid for the claim less the national average drug acquisition cost) are massive. Aardvark take: This section is kind of puzzling. On the one hand, it is not surprising that markup percentages may appear high, because when generics enter in the market, the price drops like a stone, and plans generally want to create margin opportunities for pharmacies to dispense the generic rather than the brand. But on the other hand, some of the percentages they're talking about are pretty extraordinary. So how could that be? A couple of possibilities. First, the nadac data that they're using on the cost side is actually pretty crappy. Second, usually when generics enter, the payor pays for all forms of the drug (brand and generic) using a single "MAC" amount. The MAC is often calculated as a substantial discount from the list prices (WAC or AWP) for the drug, and the generic list prices are often pretty close to the brand list prices. So, it could be that the margins are created because the list prices for both brands and generics are high and don't reflect acquisition costs. But these numbers are way higher than I'd expect in a MAC context, so it could be that they're not using MACs (eg, depending on the timing of the generic entrants for the studied drugs), or that specialty drug MACs are more 'friendly' in terms of the percentage discount. Notably, there's nothing in this report to compare the typical profit margin percentages on 'ordinary' drug MACs. I suppose another possibility is that the FTC is just doing the wrong margin comparison (eg, looking at the pharmacy's charge rather than the net amount paid), but that's not what they say.
b. specialty drug dispensing is concentrated in their affiliated pharmacies. Aardvark take: Absolutely. PBMs and plans try everything they can to exclude independent sp's, and while state laws provide some access protection, the networks are much tighter here also because manufacturers have limited distribution of specialty drugs that doesn't usually include retail chains. (This actually makes sense, since they typically are for smaller populations and thus broad retail distribution doesn't make a lot of sense as expensive product would sit on shelves and get returned.)
c. PBMs pay affiliated pharmacies more than non affiliated pharmacies. Aardvark take: Not surprising, but the magnitude is a little surprising. While insurance payment methods are ultimately subjects of negotiation and there is no 'equal payment' law like Robinson Patman price discrimination on the buy-side, some "any willing provider" laws require pharmacies to be in network if they'll accept the rates paid to others. ultimately, what this underscores is that, for independent specialty pharmacies dispensing expensive products, the need for access to insurance networks is so critical that they'll cut to the bone in terms of payment rates to get in. It may also be that the FTC's study has not taken into account certain true-ups that can benefit non-affiliates.
d. they engage in spread pricing by charging the plan incrementally more than the amounts paid to the pharmacies on the claim. Aardvark take: True, they often do charge a percentage point or so more, though (i) this practice is receding, (ii) it is all disclosed pretty clearly as part of the overall compensation relationship with the plans (though often, the plans now own them so it's really a way of creating profit outside of the plan), and (iii) recent medicare/medicaid reforms are designed to constrain the practice of spread pricing.

3. I do wonder whether some of the phenomenon they've identified may go the way of the dodo, at least in the context of medicare part D. Previously, when the benefit design included a "donut hole," when a patient's drug spend got through the donut hole, the feds basically subsidized like 90% of the drug cost to the plan. Thus, there has been a significant incentive for plans and pbms to dispense specialty drugs. As part of the ACA (and taking effect this year), the benefit design has been modified to eliminate a lot of those subsidies, and thus, those behavioral incentives. The data in this report, of course are from 2022.

 

[Aardvark86]

I'm usually not for government intervention on things but if there was a time and a place to regulate this stuff for the benefit of the people it's now and it's big pharma.

Fine to be in favor of regulation, but to be clear, the problem described here is decidedly not big pharma. ftc is focused on pbms, and more importantly, the report is focused on products for which there is generic competition, which is not typically where "big pharma" sins are committed.

 

[BrunoMars420]

So, without having looked at all of the appendicies, for those of you who want to nerd out a little despite the tldr... Full disclosure, imo, pbms are intermediary organizations that suck cost reductions out of the system without passing much of it on to patients in any material way.

1. Some preliminary notes.
a.to be clear, none of what is described is unique to united or its pbm optum
b. the findings of the two referenced drugs actually arose in a previous report, so a bit of lazy reporting here.

2. The report basically says a couple of things (with my reactions):
a. pbm markups on generic specialty drugs dispensed by their pharmacies (measured by the difference between the amount paid for the claim less the national average drug acquisition cost) are massive. Aardvark take: This section is kind of puzzling. On the one hand, it is not surprising that markup percentages may appear high, because when generics enter in the market, the price drops like a stone, and plans generally want to create margin opportunities for pharmacies to dispense the generic rather than the brand. But on the other hand, some of the percentages they're talking about are pretty extraordinary. So how could that be? A couple of possibilities. First, the nadac data that they're using on the cost side is actually pretty crappy. Second, usually when generics enter, the payor pays for all forms of the drug (brand and generic) using a single "MAC" amount. The MAC is often calculated as a substantial discount from the list prices (WAC or AWP) for the drug, and the generic list prices are often pretty close to the brand list prices. So, it could be that the margins are created because the list prices for both brands and generics are high and don't reflect acquisition costs. But these numbers are way higher than I'd expect in a MAC context, so it could be that they're not using MACs (eg, depending on the timing of the generic entrants for the studied drugs), or that specialty drug MACs are more 'friendly' in terms of the percentage discount. Notably, there's nothing in this report to compare the typical profit margin percentages on 'ordinary' drug MACs. I suppose another possibility is that the FTC is just doing the wrong margin comparison (eg, looking at the pharmacy's charge rather than the net amount paid), but that's not what they say.
b. specialty drug dispensing is concentrated in their affiliated pharmacies. Aardvark take: Absolutely. PBMs and plans try everything they can to exclude independent sp's, and while state laws provide some access protection, the networks are much tighter here also because manufacturers have limited distribution of specialty drugs that doesn't usually include retail chains. (This actually makes sense, since they typically are for smaller populations and thus broad retail distribution doesn't make a lot of sense as expensive product would sit on shelves and get returned.)
c. PBMs pay affiliated pharmacies more than non affiliated pharmacies. Aardvark take: Not surprising, but the magnitude is a little surprising. While insurance payment methods are ultimately subjects of negotiation and there is no 'equal payment' law like Robinson Patman price discrimination on the buy-side, some "any willing provider" laws require pharmacies to be in network if they'll accept the rates paid to others. ultimately, what this underscores is that, for independent specialty pharmacies dispensing expensive products, the need for access to insurance networks is so critical that they'll cut to the bone in terms of payment rates to get in. It may also be that the FTC's study has not taken into account certain true-ups that can benefit non-affiliates.
d. they engage in spread pricing by charging the plan incrementally more than the amounts paid to the pharmacies on the claim. Aardvark take: True, they often do charge a percentage point or so more, though (i) this practice is receding, (ii) it is all disclosed pretty clearly as part of the overall compensation relationship with the plans (though often, the plans now own them so it's really a way of creating profit outside of the plan), and (iii) recent medicare/medicaid reforms are designed to constrain the practice of spread pricing.

3. I do wonder whether some of the phenomenon they've identified may go the way of the dodo, at least in the context of medicare part D. Previously, when the benefit design included a "donut hole," when a patient's drug spend got through the donut hole, the feds basically subsidized like 90% of the drug cost to the plan. Thus, there has been a significant incentive for plans and pbms to dispense specialty drugs. As part of the ACA (and taking effect this year), the benefit design has been modified to eliminate a lot of those subsidies, and thus, those behavioral incentives. The data in this report, of course are from 2022.

Thank you for this breakdown

 

[TennNole17]

So, without having looked at all of the appendicies, for those of you who want to nerd out a little despite the tldr... Full disclosure, imo, pbms are intermediary organizations that suck cost reductions out of the system without passing much of it on to patients in any material way.

1. Some preliminary notes.
a.to be clear, none of what is described is unique to united or its pbm optum
b. the findings of the two referenced drugs actually arose in a previous report, so a bit of lazy reporting here.

2. The report basically says a couple of things (with my reactions):
a. pbm markups on generic specialty drugs dispensed by their pharmacies (measured by the difference between the amount paid for the claim less the national average drug acquisition cost) are massive. Aardvark take: This section is kind of puzzling. On the one hand, it is not surprising that markup percentages may appear high, because when generics enter in the market, the price drops like a stone, and plans generally want to create margin opportunities for pharmacies to dispense the generic rather than the brand. But on the other hand, some of the percentages they're talking about are pretty extraordinary. So how could that be? A couple of possibilities. First, the nadac data that they're using on the cost side is actually pretty crappy. Second, usually when generics enter, the payor pays for all forms of the drug (brand and generic) using a single "MAC" amount. The MAC is often calculated as a substantial discount from the list prices (WAC or AWP) for the drug, and the generic list prices are often pretty close to the brand list prices. So, it could be that the margins are created because the list prices for both brands and generics are high and don't reflect acquisition costs. But these numbers are way higher than I'd expect in a MAC context, so it could be that they're not using MACs (eg, depending on the timing of the generic entrants for the studied drugs), or that specialty drug MACs are more 'friendly' in terms of the percentage discount. Notably, there's nothing in this report to compare the typical profit margin percentages on 'ordinary' drug MACs. I suppose another possibility is that the FTC is just doing the wrong margin comparison (eg, looking at the pharmacy's charge rather than the net amount paid), but that's not what they say.
b. specialty drug dispensing is concentrated in their affiliated pharmacies. Aardvark take: Absolutely. PBMs and plans try everything they can to exclude independent sp's, and while state laws provide some access protection, the networks are much tighter here also because manufacturers have limited distribution of specialty drugs that doesn't usually include retail chains. (This actually makes sense, since they typically are for smaller populations and thus broad retail distribution doesn't make a lot of sense as expensive product would sit on shelves and get returned.)
c. PBMs pay affiliated pharmacies more than non affiliated pharmacies. Aardvark take: Not surprising, but the magnitude is a little surprising. While insurance payment methods are ultimately subjects of negotiation and there is no 'equal payment' law like Robinson Patman price discrimination on the buy-side, some "any willing provider" laws require pharmacies to be in network if they'll accept the rates paid to others. ultimately, what this underscores is that, for independent specialty pharmacies dispensing expensive products, the need for access to insurance networks is so critical that they'll cut to the bone in terms of payment rates to get in. It may also be that the FTC's study has not taken into account certain true-ups that can benefit non-affiliates.
d. they engage in spread pricing by charging the plan incrementally more than the amounts paid to the pharmacies on the claim. Aardvark take: True, they often do charge a percentage point or so more, though (i) this practice is receding, (ii) it is all disclosed pretty clearly as part of the overall compensation relationship with the plans (though often, the plans now own them so it's really a way of creating profit outside of the plan), and (iii) recent medicare/medicaid reforms are designed to constrain the practice of spread pricing.

3. I do wonder whether some of the phenomenon they've identified may go the way of the dodo, at least in the context of medicare part D. Previously, when the benefit design included a "donut hole," when a patient's drug spend got through the donut hole, the feds basically subsidized like 90% of the drug cost to the plan. Thus, there has been a significant incentive for plans and pbms to dispense specialty drugs. As part of the ACA (and taking effect this year), the benefit design has been modified to eliminate a lot of those subsidies, and thus, those behavioral incentives. The data in this report, of course are from 2022.

What I took from this, as a pretty big moron. (as evidenced of my stupidity, there were 6 autocorrections to my spelling of the below post).
Edit 7- I misspelled stupidity

FTC can't math right, or purposely mathed to get big anomalies.
FTC focused on specialty drugs (cancer)- something not prescribed at walgreens- and recently had generics- which can cause anomalies in the math.

 

[HawCory]

I trust that the incoming administration will do absolutely nothing to even attempt to address our healthcare racket. Trump would have the votes but he doesn't truly give a damn if we get ripped off, considering he will be grifting from taxpayers again anyway.

The single largest cost saving change that I've seen in my 18+ years in the industry for Medicare recipients has been the Senior Savings Program, which capped insulin costs for insureds at $35 per month. This was initiated during Trump's first term as a voluntary(not really voluntary) program and has since been codified.

I'm not a Trump fan, but this program was a monumental shift at the time and saved millions of seniors money that many of them couldn't afford to spend, shifting those costs to insurance carriers.

Just sayin'

 

[bdg8]

Start shooting PBMs

 

[Aardvark86]

The single largest cost saving change that I've seen in my 18+ years in the industry for Medicare recipients has been the Senior Savings Program, which capped insulin costs for insureds at $35 per month. This was initiated during Trump's first term as a voluntary(not really voluntary) program and has since been codified.

I'm not a Trump fan, but this program was a monumental shift at the time and saved millions of seniors money that many of them couldn't afford to spend, shifting those costs to insurance carriers.

Just sayin'

True dat. They did sorta steal his thunder on that, which frankly i always sorta forget.

It really is one of the better 'pure health policy' things they've done - not pay to play, but rather subsidized by all manufacturers. The second biggest which people will see this year is the new part D OOP cap. That'll look good at the checkout counter for people on expensive products that are covered, but could over time really lead plans to limit what products are covered on formularies, and double down on prior authorization and the like for expensive products.

 

[BrunoMars420]

True dat. They did sorta steal his thunder on that, which frankly i always sorta forget.

It really is one of the better 'pure health policy' things they've done - not pay to play, but rather subsidized by all manufacturers. The second biggest which people will see this year is the new part D OOP cap. That'll look good at the checkout counter for people on expensive products that are covered, but could over time really lead plans to limit what products are covered on formularies, and double down on prior authorization and the like for expensive products.

Yeah I’m just learning all about this shit since both my parents are getting on Medicare. That cap should help a lot of old folks on fixed incomes

 

[Scruddy]

Unironic Thanks Obama moment

 

[Hawkfan_08]

Fine to be in favor of regulation, but to be clear, the problem described here is decidedly not big pharma. ftc is focused on pbms, and more importantly, the report is focused on products for which there is generic competition, which is not typically where "big pharma" sins are committed.

I understand. I should have said both.

 

[Whiskeydeltadeltatango]

Aardvark 2025.

 

[Aardvark86]

Aardvark 2025.

I was thinking of throwing my hat into the ring for the Virginia governorship, but the allure of HBOT proved too great.

 

[Whiskeydeltadeltatango]

I was thinking of throwing my hat into the ring for the Virginia governorship, but the allure of HBOT proved too great.

Just remember us little people wherever you shall go.....

 

[ericram]

I'm usually not for government intervention on things but if there was a time and a place to regulate this stuff for the benefit of the people it's now and it's big pharma.

Maybe for profit Healthcare is not so good.

 

[Brian_Fantana]

I trust that the incoming administration will do absolutely nothing to even attempt to address our healthcare racket. Trump would have the votes but he doesn't truly give a damn if we get ripped off, considering he will be grifting from taxpayers again anyway.

Serious question, why haven't previous Administrations tackled it? I sure as shit hope Trump tries to change things; but why hasn't there been more outrage against previous administrations? I honestly don't know that answer, so not trying to make it political.

 

[Tom Paris]

Serious question, why haven't previous Administrations tackled it? I sure as shit hope Trump tries to change things; but why hasn't there been more outrage against previous administrations? I honestly don't know that answer, so not trying to make it political.

You need 60 votes in the Senate and Republicans will not vote to lower costs for everyday Americans. Healthcare. Pharmaceuticals. Food. Gas. Anything, really. Democrats never have enough votes to change our healthcare system. Too much money in it trying to stop them.

 

[Brian_Fantana]

You need 60 votes in the Senate and Republicans will not vote to lower costs for everyday Americans. Healthcare. Pharmaceuticals. Food. Gas. Anything, really. Democrats never have enough votes to change our healthcare system. Too much money in it trying to stop them.

Got it -- obviously it has been well known the consumers are getting screwed by insurance companies, i just never paid attention to the extent.

 

[HawCory]

True dat. They did sorta steal his thunder on that, which frankly i always sorta forget.

It really is one of the better 'pure health policy' things they've done - not pay to play, but rather subsidized by all manufacturers. The second biggest which people will see this year is the new part D OOP cap. That'll look good at the checkout counter for people on expensive products that are covered, but could over time really lead plans to limit what products are covered on formularies, and double down on prior authorization and the like for expensive products.

Yeah I’m just learning all about this shit since both my parents are getting on Medicare. That cap should help a lot of old folks on fixed incomes

The new cap is absolutely helping those people that were spending upwards of $2000 on Rx every year, but what I am seeing is that the people who were spending less than $500ish per year weren't affected at all while people who were spending more than that but less than $2000 are going to spend more on their Rx this year than they did last year, usually by $300 or so.

We didn't see a whole lot of formulary shrinkage this year, but that is certainly a concern of mine as well. That $2000 cap is meaningless if your prescriptions aren't on your Part D plan's formulary.

For background, I ran Rx lists for around 450 clients during AEP.

 

[Aardvark86]

Serious question, why haven't previous Administrations tackled it? I sure as shit hope Trump tries to change things; but why hasn't there been more outrage against previous administrations? I honestly don't know that answer, so not trying to make it political.

Just what do you mean by "it" since i'm not sure of the specific "racket" that Tom is alluding to?

If it's drug cost issues like this, the short answer is that from a legislative perspective, you have two 800 pound gorillas in the room - the insurance industry and pharma. That's not an easy fight to declare a winner, let alone one where somebody even wants to get between them and referee. The longer answer is to remember that in the big scheme of things, we've only had a federal drug benefit for less than 20 years. We're still in the phase of the life cycle of "tinker, respond, counter tinker, respond". You'd be surprised at how much behavior has changed in response to shifting incentives over that period. So it's been a bit of a moving target.

 

[Sharky1203]

This is what happens when you give control to just a few. UHC doesn't have to compete with but a few.