Express Scripts on the Road to Damascus?

The political pressure around PBMs has apparently given ESI's leadership a Paulian vision. The tone-deafness and clinical errors in their release belie their message of goodwill.

Today, a friend shared this press release from Express Scripts with me. “Express Scripts® Launches New Initiative to Expand Rural Health Care Access Through Partnerships With Independent Pharmacies”

I think that Express Scripts is doing everything they possibly can from a PR perspective to prevent wholesale breakup of their company and their business model. And this press release is a great example of that, but it also shows something deeper that is wrong with the PBMs being the lords of pharmacy. At first glance, this release says:

1. they’re going to increase reimbursements to independent pharmacies

2. They’re going to pay pharmacists to do cool stuff

3. They’re creating an independent pharmacy advisory committee

At a slightly deeper examination it says

1. They’re going to increase reimbursements to RURAL independent pharmacies that “aren’t affiliated with a wholesaler.”

2. Their PR people don’t know what a virus is.

3. Their PR people don’t speak pharmacy.

There are a lot of oddly worded phrases in this press release, and that’s what caught my attention.

“aren’t affiliated with a wholesaler” - this appears to be a reference to Pharmacy Services Administrative Organizations, which are largely operated by wholesalers, but not exclusively. As literally worded, this suggests that they won’t be increasing reimbursements to any pharmacies that use a wholesaler at all (i.e. every pharmacy), which is probably not what they were going for.

“pay pharmacies more when they drive better outcomes, such as prescribing 90-day supplies” - this crosses a pet peeve of mine - pharmacies and pharmacists don’t usually “prescribe” anything. Pharmacists “dispense” medications. Physicians and midlevel practitioners “prescribe” medications. When pharmacists DO prescribe, it’s under relatively restrictive circumstances and doing so at all is lauded by state pharmacy associations as a big win. Pharmacists prescribe vaccinations. Pharmacists prescribe naloxone under standing orders. The authority to prescribe (i.e. decide which treatment to use) and the authority to dispense (the authority to sell that product) are deliberately separated - that separation is what created Pharmacy as a separate profession from medicine. In recent years, this boundary has become blurred (physician dispensing, pharmacist prescribing), but the separation is why pharmacists go to pharmacy school and not medical school followed by a residency in pharmacotherapy or something like that. Separately, I don’t believe that 90-day supplies actually drive true adherence or clinical improvement - they just move the process measure of PDC. And PBMs do like to pretend that when pharmacies dispense 90 days of medication, the drug cost drops even further than their already fantasy land reimbursements. It’s not a thing. 90 day supplies cost pharmacies the exact same about to obtain as 30 day supplies. Reimbursing less for the drug cost portion for a 90 day supply makes zero sense, but every PBM does it.

“[R]eimbursing independent pharmacists for… Acute viral condition testing (i.e., influenza, strep A, A1C)” - This is so incredibly off base that it feels like it was written by ChatGPT while it was hallucinating. Strep A is NOT a virus. It’s a bacteria, which is why we treat it with antibiotics. A1c - i.e. Hemoglobin A1c is not only not a virus, it’s not “acute.” A1c is a laboratory measurement of the percentage of hemoglobin in the blood that has been chemically modified by exposure to glucose. It’s a very useful metric for chronic diabetes management, because since red blood cells stick around in the blood for ~3 months, it can give you a sense of how well controlled a person’s diabetes is over the past three months, even if their current blood sugar is perfectly normal. And don’t get me wrong here - that Express Scripts wants to reimburse pharmacies for A1c testing in the pharmacy is not a bad thing, it’s just that clearly their PR team doesn’t know what it is they are buying.

This brings me to my main point today - Pharmacy Benefit Managers are exactly what Matt Stoller describes - glorified spreadsheets that get to charge everyone fees for no reason. And PBMs are REALLY good at playing with spreadsheets to move around dollars and cents and hide that money from everyone doing business with them. But organizationally, they don’t understand what those spreadsheets MEAN, what they are DOING with all of the spreadsheets. It’s all just numbers on a spreadsheet. A1c, strep A, influenza are just terms they saw on a spreadsheet or on a blog somewhere about what independents do. They aren’t connected to a mother caring for a kid with strep throat and ailing parents with uncontrolled diabetes. AWP discounts in the contracts that they offer aren’t tied to any understanding of how pharmacies source medications. They’re just numbers on a spreadsheet, and the higher the discount goes, the better, never mind the fact that the discount is implicitly asking pharmacies to buy counterfeit products.

When they mandate that their members go to Walgreens or CVS to save a few pennies in dispense fees or AWP discounts, the fact that they are severing therapeutic pharmacist-patient relationships is just “member disruption” - a metric that can be put into a spreadsheet with a few dollars here or there to make the numbers work, consequences to the member’s downstream health notwithstanding. And downstream health effects of PBM coverage decisions don’t even enter into the spreadsheet - PBMs are about drug cost, and drug cost alone. Make cost number go down, make profit number go up. You would think that being a part of Cigna - a health insurer at risk for all of the money spent on a member’s overall health - would make Express Scripts’ spreadsheet monkeys take more factors into account than just drug costs and AWP discounts, but that’s a category error of believing that giant bureaucracies work like rational human beings. It’s also an error to believe that health insurers care about their members’ health. They do… to a point. In reality, health insurance companies want their fully-insured members to be exactly as healthy and expensive as their actuaries guess that their members are, maybe a tiny bit sicker every year. Because insurers and PBMs throw up massive barriers to covering healthcare services, we assume they want to “reduce the cost of care.” But that’s not exactly right - health insurers that reduce the cost of care too much have to refund their premiums to the plan membership, and then they have to charge lower premiums next year, which means that your top line revenue is smaller. No CEO wants to be in charge of a shrink in their top line revenue - revenue is power!

All of this to say that PBMs can say whatever they want in their press releases. This move is an attempt to break the one negotiating point that PSAOs have - access to rural health care. While my own feelings about PSAOs are decidedly mixed, the market power dynamics are clear - PBMs can issue whatever contract they want in an urban setting where there are numerous pharmacies. Some sucker will sign the deal and the PBM members will have reasonable access to a pharmacy (like as I may to imagine otherwise, the general public’s #1 reason to pick a pharmacy is location and #2 is “in network with my PBM”). PSAOs don’t derive any significant bargaining power from sheer number of locations - they derive their bargaining power from the fact that PBMs NEED rural pharmacies in their network to be able to meet network adequacy requirements. Express Scripts is trying to break that bargaining power by contracting with all of the rural pharmacies directly on favorable terms so that they can dictate terms to the remaining urban and suburban pharmacies. The vast majority of the dollars flow through the urban and suburban areas, so giving more favorable terms to the rural pharmacies to get better terms with urban pharmacies is a great deal for ESI.

I would like to take this press release at face value and believe that ESI really has had a Paul-on-the-road-to-Damascus awakening “why persecutest thou [the little pharmacies]?” But as NCPA has said, actions speak louder than words, and ESI’s most recent major action around independents was to effectively kick us all out of the Tricare network by offering unconscionable terms, so I just can’t see Express Scripts’ Saul-like behavior turning to Paulian love for the small pharmacies that fill in the holes in their chain-dominated pharmacies networks. I hope I’m wrong.