A bitter pill to swallow

Leslie Yesenchak was elated when a generic drug became available to treat her multiple sclerosis, a drug so simple that her doctor told her she could “make it in her garage.”

She was eager to pay lower prescription costs. But it didn’t work out that way.

Her co-pay for the drug supplied by her health plan’s specialty pharmacy, operated by Chartwell Pennsylvania LP, didn’t budge. Then she heard about a West View pharmacy that offered lower prices on many drugs — but getting her script moved there was a trial.

What Ms. Yesenchak didn’t know at the time was that making it hard for her to shop around for a lower prescription price is an aspect of a lesser-known pharma strategy to boost profits. It’s not an uncommon practice, as companies seek to hang on to sales, according to industry analysts.

It’s a big market: Special pharmacy prescriptions represented about 50% of the $600 billion in overall drug costs in 2021, but made up only 2.2% of the total number of prescriptions filled, according to the National Association of Specialty Pharmacy, a Washington, D.C., trade group.

Specialty mail order drug stores generally have a reputation for resisting efforts to transfer prescriptions funneled to them through relationships with health plans and medical offices, and local pharmacists say Chartwell’s resistance to transferring prescriptions to other pharmacies is real.

“ ‘I don’t want to use you guys anymore,’ ” Ms. Yesenchak said she told an phone operator at Chartwell, which has offices in Oakdale, Erie and Altoona. “ ‘You’re too expensive. Stop it.’ The girl said that was impossible.”

Chartwell finally relented, forwarding her prescription to Blueberry Pharmacy in Westview to be filled as she requested, but the delay became a monthly battle. Other times, Ms. Yesenchak had to ask her doctor to send a new prescription, overriding his office electronic medical records system that automatically sent it to Chartwell, she said.

Chartwell officials didn’t return calls seeking comment.

‘Sometimes you pay more’

Ms. Yesenchak’s experience pulls back the curtain on an insurer-drug industry practice that props up specialty pharmacy prices for consumers, according to industry analysts. Health insurers’ pharmacy benefit plans do not always offer the best price.

Insurers decide which drugs to classify as specialty — and therefore carry a higher cost — on a case-by-case basis.

For Ms. Yesenchak, 66, a cardiology nurse who lives in Canonsburg and has health insurance through UPMC Health Plan, going outside her health insurance plan saves her 63% on a month’s supply of this particular drug — $28 instead of a $75 co-pay, before paying an annual membership fee of $60.

Co-pays for specialty drugs vary by plan, so in some cases the savings on specialty drugs could be greater leaving the insurance plan.

For example, the specialty drug co-pay for the 13,538 people who work at the University of Pittsburgh and have UPMC Health Plan coverage is $100, so Blueberry’s price for the prescription would be 72% lower than Chartwell.

In such cases, a health insurance pharmacy plan “benefit becomes an oxymoron because sometimes you pay more,” said Gordon Vanscoy, pharmacist, serial entrepreneur and CEO of health care company RareMed Solutions in Findlay. “You just have to be aware.”

Mr. Vanscoy said he advises patients to shop around.

In the case of Blueberry, the independent pharmacy doesn’t accept any pharmacy insurance benefit plans and takes a membership-based approach to filling prescriptions. The pharmacy, opened in 2020, buys directly from drug wholesalers on a just-in time basis meant to reduce costs. It also discloses its markup.

Filling a prescription at this kind of pharmacy won’t always be less expensive for consumers.

For common antibiotics and other medicines, UPMC Health Plan has 30,000 approved pharmacies, including Giant Eagle supermarkets, which compete for the right to fill its members’ prescriptions.

The funnel is tighter for the specialty tier of its formularies — which generate the highest profits. In UPMC’s pharmacy network, just two providers serve almost 570,000 commercial health plan members: Chartwell and Accredo Health Inc. of Memphis, Tenn.

The challenge can be getting places like Chartwell, which receives specialty drug prescriptions electronically, to transfer a script, pharmacists say.

“Scripts would go there and go into a black hole,” Blueberry’s founder, pharmacist Kyle McCormick said. Repeated phone calls and delays followed.

Limiting patients’ options

Steering prescriptions to certain drug stores is a fairly common industry practice that takes a variety of forms, said Jesse C. Dresser, partner at the Pine Brook, New Jersey law firm of Frier & Levitt LLC, where he specializes in pharmaceutical industry issues.

Unlike 26 other states, Pennsylvania has no law prohibiting insurers and health systems from excluding pharmacies from their commercial plan networks, providing they meet the insurer’s terms and conditions for a contract.

“We see many instances, whether it’s Aetna, CVS or other pharmacy benefit managers, taking steps, or actively interfering, to limit patients from getting prescriptions filled at another specialty pharmacy,” Mr. Dresser said. “In a situation where there is clear direction from the patient to transfer a prescription, a pharmacy cannot hold on to that prescription.”

Ms. Yesenchak has group health insurance through UPMC Health Plan and her coverage lists her prescription for Tecfidera, which is a generic drug that she takes twice a day, as a specialty drug on her plan’s formulary.

UPMC Health Plan sent her prescription to Chartwell, a limited partnership specialty pharmacy created in 1991 by UPMC, Butler Health System, Heritage Valley Health System and Washington Health System.

In 2020, UPMC sold its share in Chartwell for $400 million to CarepathRx, a Seattle-area pharmacy and medication management company. At the same time, UPMC became an investor in CarepathRx.

In February, UPMC sold part of its CarepathRx business to an unnamed third party, resulting in $164.1 million in proceeds that were booked as “other revenues” for the second quarter, according to new financial statements.

CarepathRx has been on something of a tear since it was formed in 2019 with $2.4 billion in estimated prescription refills in 2022, up 33% from 2020, according to Philadelphia industry analyst Adam J. Fein, CEO, Drug Channels Institute.

‘Convenient, in-network access’

Chris Antypas, owner of Asti’s South Hills Pharmacy, believes consumers wind up paying for the price for the alignment of a health system, insurer and pharmacy. He, too, has tangled with Chartwell over getting prescriptions referred to his special pharmacy at the request of customers.

“Chartwell flat-out says they won’t transfer it,” Mr. Antypas said. “When a medication prescriber and insurer own a pharmacy, they’re incentivized to direct business to the pharmacy they own.”

In a statement, UPMC Health Plan said members were free to have their prescriptions filled at other drug stores.

“UPMC Health Plan provides members with convenient, in-network access to specialty pharmacies, like Chartwell and Accredo, because they provide high-touch clinical services that help manage chronic conditions requiring medications with potentially serious side effects,” UPMC said.

“Chartwell has a process in place to help members transfer their prescription. Any UPMC Health Plan members with concerns about their prescription should call member services for assistance.”

Highmark does not own a specialty pharmacy, a spokesman for that Pittsburgh-based insurer said.

“We offer specialty pharmacy management programs and benefit designs that provide our members and group customers with specialty pharmacies that are highly qualified to manage their particular health status,” Highmark said in a prepared statement.

Woonsocket, R.I.-based CVS Health, the parent company of Aetna, a big health insurer in the Pittsburgh area with its own specialty pharmacy, did not return calls for comment.

Like Ms. Yesenchak, East Liverpool, Ohio, retiree Linda Bush was prescribed Tecfidera for multiple sclerosis. And like Ms. Yesenchak, her health insurer, UnitedHealthcare, referred the prescription to a specialty pharmacy to fill.

Ms. Bush, 67, was billed $2,000 for the pills in February, an amount that was paid by the Assistance Fund, an independent charitable organization in Orlando, Fla., that helps consumers afford prescriptions, far above the $29.95 that Blueberry Pharmacy charges for the prescription.

Her husband Terry Bush, 68, finds the situation frustrating. “If Blueberry can offer the same drug for $29.95, who is screwing who here?”

Kris B. Mamula: kmamula@post-gazette.com