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State urges health insurers to let patients buy ‘specialty’ drugs at retail pharmacies

Health insurance companies should allow certain patients to buy “specialty” drug prescriptions at community pharmacies rather than requiring the use of mail-order services, according to the state Attorney General’s Office.

In a letter to 15 New York-based health insurers, the Attorney General’s Office is urging the companies to change their policies and allow certain members to purchase specialty medications at retail pharmacies, citing dozens of complaints from consumers about problems with mail-order pharmacies.

Packages that arrive through mail order compromise privacy and, in instances where drugs need refrigeration, can result in spoilage, according to the letter from Dorothea Caldwell-Brown, assistant attorney general. In addition, she wrote, mail-order arrangements may not stay current with patients whose drug dosages fluctuate, posing a health risk.

“Every New Yorker deserves easy access to the benefits they pay for,” Attorney General Eric T. Schneiderman said in a statement. “Those suffering from debilitating diseases like cancer, rheumatoid arthritis and HIV should not be made to suffer further hardship to get prescription drugs that are critical to their care.”

He said that exempting consumers with qualifying hardships from mandatory mail-order requirements would allow health plan members to continue to obtain medications from their local pharmacies.

The letter, dated today, is being sent to HealthNow New York, parent company of BlueCross BlueShield of Western New York; Independent Health; Excellus BlueCross BlueShield, parent company of Univera Healthcare; and Fidelis Care New York.

Others on the mailing list include EmblemHealth, Aetna, AXA Equitable Life Insurance Co., Capital District Physicians Health Plan, Cigna Corp., Healthfirst, MVP Health Care, Oxford Health Plans, Guardian Life Insurance Co. of America, UnitedHealth Care and WellPoint.

Community pharmacists praised the action.

“I’m very happy to have that level of oversight. The attorney general is trying to encourage different behaviors,” said Stephen L. Giroux, owner or co-owner of a handful of pharmacies in the region, including Middleport Family Health Center in Niagara County.

Giroux, who is a past president of the Pharmacists associations of Western New York and New York State, as well as of the National Community Pharmacists Association, said the action by the attorney general reflected the lack of clarity over the definition of a “specialty drug.”

“ ‘Specialty drug’ has come to be just a buzzword for an expensive drug,” he said.

In 2011, Gov. Andrew M. Cuomo signed into law the Anti-Mandatory Mail Order pharmacy bill, legislation heavily supported by independent pharmacies. The bill barred insurers or employers from requiring patients to use mail order for prescription drugs, except for self-insured health plans and plans negotiated by unions.

However, independent pharmacists said pharmacy benefit managers, which manage prescription coverage for health plans, have found ways to get around the law, which called on brick-and-mortar pharmacies to meet certain terms and conditions to fill specialty medication prescriptions.

In addition to prices, those conditions might also include a 24-hour nurse hotline, a service not usually offered by a retail pharmacy.

“We needed a level playing field,” said Dennis C. Galluzzo, executive director of the Pharmacists Association of Western New York and operator of Family Medical Pharmacy in Amherst.

“There is no reason to isolate certain drugs away from retail pharmacies.”

In a related matter, the State Pharmacists Society, as well as a group of patients and pharmacies, including Giroux’s, in 2011 filed a lawsuit in State Supreme Court against the state Health Department to stop allowing managed-care plans for Medicaid recipients from requiring patients to get drugs through mail order. The society contended that the policy violated patients’ rights and threatened mom-and-pop pharmacies.

The court last year temporarily stopped the state from requiring Medicaid patients on any of about 400 specialty drugs to get their medicine through mail order. Then, in this year’s state budget, language was included to end the Medicaid mandate, Galluzzo said.

Generally speaking, specialty drugs are high-cost medications derived from living organisms and administered by injection or infusion. They are used to treat such complex conditions as cancer, multiple sclerosis, rheumatoid arthritis and blood disorders.

Specialty drugs are prescribed for only 1 in every 100 commercial health plan enrollees, but they account for 12 to 16 percent of commercial prescription drug spending, according to a study last year by the Center for Studying Health System Change. The medications can cost as much as $200,000 per year.

A key problem is that no standard definition exists for “specialty drugs,” according to the study, which noted that health plans and pharmacy benefit managers often use or own specialty pharmacies and employ their own definitions. The Attorney General’s Office is urging health plans to adopt a policy similar to one worked out earlier this year with Empire BlueCross BlueShield.

Empire notified its members that, as of Jan. 1, drugs on its “exclusive specialty drug list” must be purchased through its mail-order pharmacy, CuraScript. But Empire agreed to a new policy in which qualifying members can be exempted from the mail-order mandate.

Mail order represents a large and lucrative segment of the prescription business. Of the $314.3 billion in prescription drug spending from Sept. 1, 2010, to Sept. 30, 2011, retail pharmacies accounted for 54.2 percent, followed by mail order at 17 percent, according to a 2012 study in the American Journal of Health-System Pharmacy.

“The mail order mandates are just a money grab by pharmacy benefit managers. They want that business,” Giroux said.

Independent pharmacists contend that specialty drugs would constitute a small group of rare medications not usually available at retail stores. But the class of medications has come to include many drugs that retail outlets can stock or easily obtain.

“We either have them or have access to them,” Galluzzo said. “But if you take my clientele away, of course, I won’t stock it.”

Mail-order advocates defend the practice, saying the service saves money for patients and employers. They also accuse the independent pharmacy lobby of advocating for regulations that benefit their businesses under the guise of protecting consumers.

“This unnecessarily raises costs for consumers, insurers and employers. Obviously, these laws mostly aim to benefit local community pharmacies rather than consumers,” the Pharmaceutical Care Management Association, which represents pharmacy benefit managers, wrote in a recent report.