Tag Archives: Politics

ALERT! YOUR CO-PAY HAS BEEN CLAWED BACK

How Does Prescription Drug Insurance Work?

Every insurance plan has preferred drugs, brand name drugs and drugs that are either not covered or have a high co-insurance cost.  These are often arranged into Tiers.

  • Tier 1 – Generic Drugs

    • Once a drug has been on the market for 20 years (25 in some circumstances), the patent held by the company which created the drug expires.  This allows other companies to create the exact same drug (chemically and in delivery) for a tiny fraction of the price.
    • Lowest copay amount
  • Tier 2 – Non-Preferred Generic Drugs

    • Same as above just more complex or expensive ingredients.  Could also be generics purchased by new companies trying to drive profits.
    • Slightly higher copay amount
  • Tier 3 – Preferred Brand Name Drugs

    • These drugs are less expensive than the Non-Preferred list, but are still under patents and therefore significantly more expensive than a generic.
    • Often have a higher copay than a generic drug
  • Tier 4 – Non-Preferred Brand Name Drugs

    • These are expensive drugs which are still under patent.  They are often the brand name drugs for the generics in Tier 1.  Considered an unnecessary insurance expense.
    • These drugs are often susceptible to a copay and having to pay the cost difference between the Brand Name and the Generic version.
  • Tier 5 – Specialty Drugs

    • These drugs are expensive, new and used to combat complex diseases.
    • They are often not covered at all or require heavy co-insurance payments and restrictions on access.

So…how do tiers become tiers?  Why is a drug covered under one insurance plan and not another?  Who controls this system?

Pharmacy Benefit Managers

Insurance Companies and Employers contract PBMs (Pharmacy Benefit Managers) to organize and negotiate plans with pharmacies and drug companies.  These folks are super important to understanding the cost of pharmacological medicine.

BCBS uses Prime Therapeutics from Irving, TX, as their PBM for many of their plans.  According to Prime Therapeutics’ website:

“Prime Therapeutics’ NetResults is one of the most aggressive formularies in the industry. And it works. Our clients are seeing an estimated savings of more than $10 per member per month.

So being aggressive pays off — we get people the medicine they need without the use of high-cost drugs.

Go bold or go home.”

So wait.  You do this formulary thing and we avoid high-cost drugs and everyone wins?  Cool.  

What’s a formulary?

A formulary is a tiered list of drugs covered by a prescription plan.  The “NetResults” formulary can be accessed here.  It uses a “p” for Tier 1, “np” for Tier 2, “P” for Tier 3 and “NP” for Tier 4.  The copay assigned to each of those tiers depends on how much your insurance company/business wants to pay for prescription coverage.

The average copay for a three-tier system (usually combines tiers 1 and 2 from above and excludes all drugs from tier 5) are $11 for Tier 1, $31 for Tier 2 and $53 for Tier 3.

So how do Wal-Mart and Target offer $4 generics WITHOUT INSURANCE? (They totally do.  Check out their lists here and here)

Average Wholesale Price

The Average Wholesale Price is the price a pharmacy buys the drug for in bulk.

It is considered the industry’s average price paid by a pharmacy to a drug manufacturer per 30/day or traditional supply.  You can find the federal government’s ACA payment AWP list here.

Let’s use Meloxicam 15mg as an example.  Target offers it for $4 without insurance.  The FDA says its AWP is about 1 cent a pill.  That’s a wholesale cost of 33 cents per 30 day supply.  With my insurance it is $4.18/30 day supply at Walgreens (as mine is a percent, not a copay).  The average cash price for the same amount is $13.78.  Priority Health will charge you $7 after you meet their $75 deductible.

NOTE:  The pricing isn’t even this simple as it is what the manufacturer reports to the government.  It doesn’t include all of the standard rebates and coupons given as incentives to PBMs and Pharmacies in the form of checks after our collective purchases.

Has it ever occurred to you that pharmaceuticals are like a grocery store without price tags?  Everyone pays a different amount and no one knows exactly why.  But more importantly, does Walgreens keep all of the 1,250% markup on my Meloxicam?

The Clawback

A PBM clawback occurs when an insurance company assigns expensive copays to a drug, a price that may be significantly higher than the actual value and acquisition cost of the drug.

Clawbacks occur when your pharmacy submits a claim for a prescription drug, and you’re directed to collect a specific dollar amount for the copay. The amount will likely be excessive and unrelated to the acquisition cost of the drug. – pbahealth.com

So for example, if you paid that $7 co-pay for 30 days of Meloxicam and Walgreens paid 33 cents, the PBM would clawback over $6 of that copay YOU PAID after paying your deductible and monthly premiums.  The amount of clawback to these PBMs has skyrocketed the cost of medication.

  • The PBM negotiates with drug companies to decide which drugs will be part of their formulary and on which tier.
  • The PBM establishes a rebate program for themselves based on purchases made by member of their formulary.
  • The PBM then sets the copay amount (often far above the actual price of the drug).
  • When the copay is more than the pharmacy charges, the PBM claws back all of the copay paid beyond the cost of the drug.

On top of this, you could have gotten the prescription cheaper by paying cash and not using your insurance.  But, if you’re a pharmacy, telling a customer not to use their insurance is asking for big-time PBMs to make your pharmacy a persona non grata under all plans they administer.  That would be a huge loss.

What Did We Learn?

There is a lot about pharmaceuticals that needs overhaul and transparency.  When the pharmaceutical rep shows up in a short skirt to your doctor’s office talking about the next big drug, she’s bringing with her a list of PBMs who have tiered that very medication.  The whole system revolves around a few key players who negotiate the prices, set the premiums, set the copays, choose the drugs, tell the doctors what scripts to write, tell the pharmacies what to charge and then collect back huge sums of cash from your family’s bank account.  We need transparency so that we can reform this broken system.  The only thing that can fight darkness is the light of day.

Further reading on other relevent pharma shenanigans

Micah Crittenden is a Senior Writer for American Research and is on Twitter at @thatgingerish

 

 

The Diminishing Voice of the People

The Founding Fathers believed the Legislative branch (Congress) would be more powerful than the Presidency or the Courts. They were so concerned about the potential for Congress to become tyrannical, they split the Legislative branch into two groups: the House of Representatives and the Senate. It was the House of Representatives that would be the voice of the people, elected by popular vote every 2 years. 

When the first 65 U.S. Representatives were elected, the ratio of citizens to Representative was 60,000 to 1. The voice of the people was strong, as interested citizens could get a chance to communicate with their Representative. If only 1 in 100 citizens wrote a letter in 1790, the elected official would need to read and respond to 600 letters that year. Requests for face-to-face meetings were easily accommodated.

As the population of the U.S. continued to grow, Congress increased the number of U.S. Representatives to try and keep pace. By 1911 there were 435 U.S. Representatives. The Apportionment Act of 1911 put a cap of 435 on the number of U.S. Representatives, a cap which remains to this day.

The story of the United States has been one of perpetual population growth. Since 1790, the population of the United States has gone from nearly 4 million to 308 million (2010 Census). The ratio of citizens to U.S. Representative in 2010 was a staggering 709,000 to 1. Since 1790, the voice of the people has become diluted to more than 1/10th of what the Founding Fathers saw in their time. If 1 in 100 citizens wrote a letter to their Representative in 2010, that Rep would need to read and respond to 7,090 letters a year. That would require a team of staff to do the actual reading. It would also require the use of form letter responses, like many of us have received, responses that barely address the topics of concern. Good luck getting a private meeting.

Sometimes a picture or a graph says it all.

Think of doing laundry. We start off putting in one scoop of detergent and it works well. We start washing larger loads, still using one scoop of soap, but becoming dissatisfied with the results. We change brands and the one scoop still doesn’t cut it. The loads get ten times larger, but no matter which brand we use, or how fresh the soap is, our clothes just don’t get cleaned. 

Today, there is high demand and limited access to U.S. Representatives. Who gets the most face-to-face time? Donors, lobbyists, big business, and other useful parties. Enter political careerism and corruption. Little wonder the people feel disconnected from government. 

There is an unmet need for engaging representation. It’s time to reconsider the arbitrary number of 435. 

Trust in Trump

My wife and I recently went car shopping. The moment we stepped on the lot, a salesman was there to greet us. His tactics were familiar, starting with a smile, handshake, and light hearted joke. Within a minute he was trying to bond with us over dogs (leashes on the seat), grandkids (car seats buckled in), and marriage (“How long have you two been together?”). He was doing his best to elicit a positive emotion because he knew by training and experience, if he can hook us by the feels, we will be more likely to give him our trust. Trust can be a profitable thing.

Trust is willingly becoming vulnerable with the hope of a positive outcome. Most of us like to have first order information (convincing experience) before committing to trust. We want to see things in action, make sure they work, or go for a test drive.

In the absence of that, second order information can supplement. This could be a referral from a family member, numerous good reviews, or an endorsement by a trusted group.

What do we do when first and second order information doesn’t answer the question? We trust our gut.

If you can believe social science, there are several studies suggesting human emotion is a highly valued source of information for most people when they are making decisions (here). The business world takes stock in this theory, writing about it often. Many stock traders, sales staff, loan officers, and marketing reps get training about the connection between human emotion and the development of trust. Most can verify from professional experience that competence is profitably enhanced when clients are groomed for a positive emotional experience.

Gut-based decision making has some limitations (we all have that one friend who serially enters one bad dating relationship after another). In an oft replicated classic study, a pair of researchers collected life satisfaction data from college students. Those social scientists also kept track of the daily weather. When the sun was shining, subjects rated greater life satisfaction than when it was raining! (Schwarz & Clore)

When human beings feel good, they are more likely to let their judgement lean in a positive direction. When they feel bad, the world around them looks more negative than usual. These social scientists also found they could eliminate the attributional connection between mood and judgement by simply letting subjects know that decision making can be corrupted by emotions.

When Trump showed up in political force, most of us had very little first order information. We knew Trump was in real estate, he ran a casino, and was the star of a reality game show that judged the business skills of contestants. However, we did not know how he would run a government or collaborate with Congress for the good of our nation.

When it came to second order information, there were not many endorsements or recommendations. The Republican Party was slow to lend support. GOP politicians seemed reluctant to endorse. Media outlets mostly attacked Trump and rarely gave a positive write up.

Undecided voters were left to trust their gut. Citizens searched their hearts. The man was rich, had beautiful kids, conducted some pretty exciting campaign rallies, and claimed with great confidence he had the skills to Make America Great Again.

The sun was metaphorically shining when undecided voters stepped into the voting booth and made a heart-felt decision.

Things are different today. We now have 142 days of first order information about how Trump will continue to govern. His flamethrower approach is well documented in speeches and tweets. He has burnt Congress, the Intelligence Community, and world leaders. The porous boundary between his presidency and the family business looks to be permanent. This means Making America Great Again also means keeping Trump Industries flush with WH generated contacts and opportunities. Trump’s godfather-like kiss the ring loyalty pledge is the standard which seems to come before Constitution. Finally, despite his best efforts to stomp out the embers of investigation, the fire surrounding Russian interference in the last election continues to grow.

We also have new second order information available to us. An erosion of support is evident by the polling data from multiple sources. Most critically, Trump is not winning new supporters as he governs.

Do we declare our Trust in Trump or put him on notice and demand better? After 142 days we can say the test drive is over. We’ve read the reviews and the nation doesn’t appear to be going through a Trump conversion. What of trusting our gut feelings? Fading away is the rush of emotionally charged campaign rallies, the excitement of those flashy red ball caps, and the thrill of shoot-from-the-hip speeches. A thunder cloud is on the horizon and the smell of rain is in the air.

Obstruction of Justice

What is Obstruction of Justice?  According to 18 U.S.C. § 1503, “whoever . . . corruptly or by threats or force, or by any threatening letter or communication, influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice, shall be (guilty of an offense).”

In light of James Comey’s prepared remarks (which can be found here:  https://www.intelligence.senate.gov/sites/default/files/documents/os-jcomey-060817.pdf) we need to evaluate whether President Trump has committed the aforementioned offense.

1.  “Whoever corruptly or by threats or force” — this indicates that force or threat of force is not necessary for one to be guilty of Obstruction of Justice.  It is enough to be acting corruptly.

2.  “by any threatening letter or communication” — This indicates the offense does not need to be in writing but can be verbally or by direct action.

3.  “influences, obstructs, or impedes, or endeavors to influence, obstruct, or impede, the due administration of justice, shall be (guilty of an offense).” — Indicates that it is not necessary for the crime to be successful, but rather, the attempt to obstruct justice is sufficient for conviction.

Information we have received from the Comey statement:

Second Meeting (page 3):



From this section we can infer that the President was using Director Comey’s desire to stay in his position as a bargaining chip for “loyalty”.

Second Meeting (page 4):


Through this we see a specific aim voiced – to “let Flynn go”.  In every aspect of the definition of Obstruction of Justice, this fits. This statement alone is a clear instance of the aforementioned crime.

Final Meeting (page 7):


This is a clear request for the Director to have acted to benefit Trump in the middle of the investigation.  This was his final conversation with the President before being terminated on May 9, 2017.
Based on the prepared testimony and before we have the opportunity to hear what other issues will be brought to light tomorrow, it is clear that President Trump at least committed Obstruction of Justice in relation to the Michael Flynn case.  He also appears to have attempted to influence justice on his own behalf on at least two separate occasions listed by Director Comey.  For this reason, we must begin impeachment proceedings.
“It is almost always the cover up rather than the event that causes trouble.” – Howard Baker

Micah Crittenden is a writer for American Research and is also on twitter at @thatgingerish

Blending Truth and Propaganda

The harms of “fake news” are all too often overlooked.  We search for trustworthy news purveyors, those that provide us information about the world around us without intentionally ignoring parts of the situation’s reality.  When we can’t find a source that simply provides information without hiding/dismissing the parts that complicate the intended conclusion, we search for a source that agrees with our own understanding of the world.  This is called an echo chamber.

Technology has increased our access to the world.  We can, in an instant, see life through the eyes of a 50-year-old in Pakistan or a 33-year-old in Lufkin, Texas.  We can see the newborn of our college roommate across the globe within minutes of its birth.  The connectivity is awe-inspiring and world-changing.

In this same light, we have greater access to unfolding news stories across the globe.  If a child goes missing in Georgia, it shows up on our Twitter feeds within seconds of the story breaking.  If you allow it, the inundation with these local stories you never had access to beforehand will lead to a misguided fear that we are less safe than we once were.  When your Facebook feed is filled with friends sharing sad/scary stories from their own communities it causes one to believe that crime, fear, violence, war and hate are more prevalent today than they were before the internet.

Statistics say this isn’t so.  According to U.S. News & World Report (https://www.usnews.com/news/articles/2016-09-26/us-crime-rate-rises-slightly-remains-near-20-year-low), violent crime has decreased by almost 50% since 1996.  Pew Research echoes and expands upon the statistics cited in U.S. News & World Report (http://www.pewresearch.org/fact-tank/2017/02/21/5-facts-about-crime-in-the-u-s/).  We are simply not becoming less safe.  Yet, it feels differently, doesn’t it?

That’s the problem with an echo chamber.  If we use our own gut feelings based on the aggregation of internet information we access we begin to doubt facts.  This is the direct cause of alternative factsfacts that feel true regardless of their support by independent verification.  These facts begin with a whisper between friends – “I don’t let my kids play outside anymore because the world is so dangerous now” and lead to online opinion posts about the same subject matter.  Add in enough likes, enough re-tweets, enough shares and these posts take on a life of their own as alternative facts.

Anecdotal evidence has always been an argument used against scientific facts.  This is prevalent enough that there is a logical fallacy of the same name (http://rationalwiki.org/wiki/Anecdotal_evidence).  However, if enough people have the same anecdotal evidence, it becomes a group theory.  Before the internet, most folks didn’t know enough people to build past their own feeling that a fact is incorrect.  Today, you can find a thousand people who agree with your feelings simply by typing your theory into google search.

These pods of people with the same feeling begin by affirming their original theory to one another.  They look for others who think similarly and link out to their anecdotal posts about the subject matter.  Once the network becomes broad enough, it begins to echo back.  New feelings emerge and are sent to the group.  Since the group has bonded over the mistrust of scientific fact, they trust each other wholeheartedly as the only true source of information.  If my friend online also thinks Obama was born in Kenya, when they tell me he is going to invade Texas, I listen.

The far right has courted these feelings via AM radio for decades.  Today, they court them via online media.  These posts are shared between pod members, reaffirming their own belief sets and expanding the areas where they distrust facts.  This grows and grows until the readers no longer trust any other source for news.  If you, an outsider, tell them the Mayor of Detroit says crime is down, they’ll ask about your source.  If you say it is anything other than a far right alternative facts blog (or sometimes Fox News), they’ll declare your facts skewed and therefore invalid.

Oddly enough, the readers of these blogs are grateful.  In the face of complex and constantly evolving internet information, their worlds have become simple again.  Their feelings are real and valid and everything else is false.  Fake News.  Just like a wolf in sheep’s clothing, talk show hosts like Sean Hannity, Bill O’Reilly and Tucker Carlson all state they are not journalists.  Not a single one of them has done investigative work on anything on which they report.  Their only job is to digest and define the issues for their viewer.  To be frank, they’re glorified Maury Povich/Jerry Springer types, trying to be the most extreme for ratings.  Yet, they’re called news.

So, what’s the harm?  Why are alternative facts so dangerous?

When we cannot trust the media, we begin placing all of our trust in demagogues.  Their words are the truth.  They have no need to independently verify.  They aren’t interested in debate.  Their opinion is the the only way to think, to feel.

We were warned against demagogues by our founding fathers.  In the Federalist Papers #1, Alexander Hamilton warns “… of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people; commencing demagogues, and ending tyrants.”   To give any person command of truth is to give them the power to become a tyrant.  The DPRK is an excellent example of this fact.  In a post-fact society, the ruler becomes God.

Across the globe today, people joined in the March for Truth.  We must continue to rise up against the falsities in our feeds, the fallacy of anecdotal evidence and the belief that any one person has a firm hold on what is real.  We must fight for universal, scientifically proven truth in all areas of life.  Real patriots stand on the side of justice.  Real patriots stand on the side of truth.

Micah Crittenden is a writer for American Research and is also on twitter at @thatgingerish