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CVS Health Corp. and Walgreens Boots Alliance Inc. were sued by California customers who accused the drugstore operators of charging co-payments for certain prescription drugs that exceed the cost of medicines.
CVS, the largest U.S. pharmacy chain by number of stores, overbilled consumers who used insurance to pay for some generic drugs and wrongfully hid the fact that the medicines' cash price was cheaper, Megan Schultz said in her lawsuit. Schultz said in one case she paid $166 for a generic drug that would have cost only $92 if she'd known to pay cash.
[...] In her suit, Shultz accused CVS of clawing back her co-pay because the chain was in cahoots with the pharmacy benefit managers who got the extra money. The practice was part of CVS's agreements with benefit managers, such as Express Scripts Holding Co. and CVS Caremark, according to the suit filed Monday in federal court in Rhode Island. CVS is based in that state.
"CVS, motivated by profit, deliberately entered into these contracts, dedicating itself to the secret scheme that kept customers in the dark about the true price'' of drugs they purchased, Schultz's lawyers said in the suit, which is seeking group status.
[...] The lawsuits follow at least 16 other cases around the U.S. targeting drugstore chains' alleged co-pay clawback practices. The clawback occurs when patients hand over co-payments set by a pharmacy benefit manager that exceed the actual cash cost of the drug. The benefit managers pocket the difference, according to the complaints.
Most patients never realize there's a cheaper cash price because of clauses in contracts between pharmacies and benefit managers that bar the drugstore from telling people there's a lower-cost way to pay, according to the complaints.
[...] The cases are Megan Schultz v. CVS Health Corporation, 17-cv-359, U.S. District Court for the District of Rhode Island (Providence); and David Grabstald v. Walgreens Boots Alliance Inc., 17-5789, U.S. District Court, Northern District of Illinois (Chicago).
Source: Bloomberg
Also at The Boston Globe, The Chicago Tribune, The Los Angeles Times, and NBCNews
(Score: 1, Interesting) by Anonymous Coward on Sunday August 13 2017, @05:12AM (2 children)
It has to be said, you can go to developing nations that otherwise have pretty good healthcare yet have no real regulations on pretty much anything. And the costs, even relative to local incomes, are a tiny minuscule fraction of what you pay in the US. I don't know if there's a causal relationship there - but such a relationship definitely exists. It's both the reason that medical tourism exists and the reason that places like Costa Rica, which has a purchasing power adjusted GDP of just $12,382 per capita, actually have greater life expectancy than we do.
I've always been extremely liberal, but having traveled the world a lot I've started to become more and more averse to governmental regulations. The United States has some of the strictest regulations in the world in many fields, but you'd be surprised how little a difference there is between our amazing country and developing nations, even what we'd refer to as the 'third world.' Government is absolutely a force for good, but it can also be exploited by private interests and turned into the opposite. I think the biggest protection against a corrupt government is keeping the distance (literally and figuratively) between the government and its constituents as small as possible. In the US it takes millions of dollars to effectively run for congress and unsurprisingly you end up with a situation where the majority of congressmen are millionaires. And they're not only millionaires but people entirely detached from the people they're supposed to represent - again physically and figuratively.
I think much strong state powers and much weaker federal powers would be something that could greatly benefit the US. Allow Ohio to have its own set of rules and regulations (or lack thereof) for medicine and insurance, and another for California. And let people decide where they'd prefer to take their business and ultimately let us see, existentially, which works out better. This is most obvious today with things like drug laws. The fact that the federal government is attempting to stop states from legalizing, or even decriminalizing, possession or consumption of various natural compounds is just silly. I'm not actually taking a pro or con stance there, but rather that this is something that the people most directly affected by these things should get to decide - not some centralized government so far detached from the people it is legislating against.
(Score: 0) by Anonymous Coward on Sunday August 13 2017, @05:32AM
Take this exact case for an example. I'm certain there is probably some law on the books that made what CVS is doing illegal. Perhaps it's the Orwell fair pricing and consumer confidence act of 1984. But one of two things will happen here, with our hypothetical regulation. Either CVS would end paying a fine which would be a small fraction of the additional profits they garnered, or CVS would manage to successfully argue that the law didn't apply to them because reasons. This story plays out over and over and over. The only people said law ends up applying to are those who are either not wealthy or well connected enough to successfully defend themselves.
Bring things down to a smaller scale and it becomes more and more difficult for companies or individuals to escape the consequences of their actions. Alice Walton, one of the richest individuals in the world, was put through a drunk driving test and arrested for breaking a law at the local level. But it eventually got thrown out and one can only imagine what happened to the police officer who did arrest her, thanks to her connections with people far detached from that officer who's interest is not in appeasing rich connected individuals - but just doing his job. The fewer people in the pipeline who see value in pandering, the more concrete laws become. Our federal government adds an entire layer of people who are for the most part only in the position they are thanks to pandering - and they're at the top of society. That, in effect, means society is for sale.
(Score: 2) by Justin Case on Sunday August 13 2017, @02:11PM
I think that's why we have 50 separate states. But federal power has gradually expanded. Or sometimes not so gradually. Consider the civil war. By spinning the propaganda to the evils of slavery, the winners shut down any further discussion of states' rights.
Imagine if we had 50 simultaneous experiments running. One state has "single payer" (actually taxpayer) health insurance. Another has highly regulated doctors and hospitals. Another is more or less a free for all, but the poor and careless die.
We would quickly see through the rhetoric to find out what really works.
And fairly soon, the other 49 states would converge toward the winning solution. With less debate, because everyone would have seen the truth and lies of the talking points.