“The most basic question is not what is best, but who shall decide what is best.”
– Thomas Sowell
“This case involves mismanagement of prescription-drug benefits. Over the past several years, Defendants breached their fiduciary duties and mismanaged Wells Fargo’s prescription-drug benefits program, costing their ERISA plan and their employees millions of dollars in the form of higher payments for prescription drugs, higher premiums, higher out-of-pocket costs, and lower wages or limited wage growth.”
-Paragraph 3, class action complaint: Navarro et al. vs. Wells Fargo & Co.
It’s like the flood gates have opened. What a few of us have been screaming about for years is suddenly coming into focus. The class action lawsuits are here and this is a Big One.
But first, two graphics from the FTC report published July 2024 titled: Pharmacy Benefit Managers: The Powerful Middlemen Inflating Drug Costs and Squeezing Main Street Pharmacies
“Oh those mighty kings of the jungle, I can hardly stand to see ‘em”
-Bob Dylan, “When I Paint My Masterpiece”
Anyway, nothing to see here. Back to our lawsuit.
We don’t have to read deep into the 102 page filing to get to the goods. Page 3 provides this nugget:
Fingolimod, a generic drug used to treat multiple sclerosis costs $648 at Wegmanns (90-day fill) and $895.63 at Walmart. If you’re enrolled on Wells Fargo’s employee health and welfare plan however, the cost is $9,994.37. A staggering 15x multiple from the cash-pay price at these local retailers. But how? Wells Fargo’s health plan covers over 200,000 lives. They have a leading benefits brokerage division and regularly publish economic insights and analysis on the health care landscape. I guess they forgot the number 1 rule: put your oxygen mask on before helping others.
The suit continues….Defendants designated approximately 300 drugs as “preferred” thus requiring that patients fill them from Express Scripts - who is not only the PBM for Wells Fargo but also the designated pharmacy to fill these drugs. These drugs all had an average markup of more than double the cost of those very same drugs. Neat!
Then there’s the classic game of reclassifying drugs. We have generics that are now given a novel moniker of “specialty generics” and all of a sudden the markup explodes to 5x the acquisition cost.
For those readers with mail-order pharmacy benefits, are your copays less than going to a retail pharmacy? I bet they are. There’s a nice incentive to use mail-order pharmacy. But in this case, as with many others, the mail order pharmacy is none other than….Express Scripts.
In just the first 4 pages of the lawsuit, we learn that Express Scripts is 3 different companies:
1) Pharmacy Benefit Manager (negotiator of drug prices)
2) Specialty Pharmacy
3) Mail Order Pharmacy
The prices must be unmatched at Express Scripts if Wells Fargo selected to use them for all 3 functions!
Specifically, bexarotene gel is available for a cash price (i.e., without using insurance) of $3,750 at Rite Aid, $4,129 at Wegmans, $7,256 at Walgreens, and $10,310.07 at Cost Plus Drugs, but costs $69,806.75 from Accredo [Express Scripts]. In short, Defendants are steering Plan participants/beneficiaries toward an option that, for many drugs, wastes thousands of dollars in Plan assets while enriching Express Scripts by that same amount.
Damnit. I was wrong.
I’m only on page 9 of this 101 page document and i need to go to bed.
Good night.
