Express Scripts, the nation’s largest national Pharmacy Benefit Management Service (PBMS), has dropped Zohydro ER from its 2015 formulary of covered medications. Insured patients whose prescriptions benefits are managed by Express Scripts will pay full price at the pharmacy counter for Zohydro beginning January 1, 2015.
Many health insurance organizations use PBMS to manage pharmacy benefits and costs for their members. PBMS are third party entities that have become a part of the confusing American medical insurance system in recent years. They are responsible for processing and paying prescription claims.
Over 200 million Americans now receive their prescription insurance benefits through PBMS, which use an economy of size in negotiating prices and securing rebates from pharmaceutical companies and large pharmacy chains.
Many people don’t realize there’s a third party involved, until a prescription is denied by the PBMS, leaving the insured person to wonder: “Who are they to deny the medication my doctor ordered?”
A major function of PBMS is to develop formularies, which are the lists of covered medications a patient may receive. These formularies are developed by several panels of experts hired by the PBMS. These panel members come from the fields of medicine, pharmacy, and the pharmaceutical industry.
Express Scripts public communications claim that their formularies “provide affordable access to clinically sound, high-quality pharmaceutical products.” The company says that “clinical appropriateness of the drug, not cost, is Express Scripts’ foremost consideration,” and that “the prescribing physician always makes the final decision regarding an individual patient’s drug therapy.”
Many states are demanding more transparency and fiduciary disclosure to regulate the PBMS industry, requiring it to act in the best interest of health consumers. PBMS, through their representative trade organization, Pharmaceutical Care Management Association, oppose these disclosures for a variety of business reasons, claiming their effect on competition would cause a rise in prices to drug consumers.
Express Scripts is the organization formerly known as Medco Health Solutons. In 2004, Medco Health Solutions agreed to a $29.3 million settlement agreement with 20 states for allegations that the company violated consumer protection and mail fraud laws.
Zohydro ER is the first long acting formulation of the most widely prescribed opioid analgesic, hydrocodone. Manufactured by Zogenix (NASDAQ: ZGNX), Zohydro was approved for use in the treatment of chronic pain in 2013 in a controversial decision by the FDA. Although experts from field of addiction medicine and anti-diversion proponents predicted widespread abuse of this new medication, to date there have been no reported cases of overdoses or diversion of Zohydro ER.