When 22-year-old Cole Schmidtknecht attempted to refill an inhaler prescribed by a doctor to prevent an asthma attack, the drugs under $70 on Appleton, Wisconsin and Pharmacy cost over $500 and according to Bil Schmidtknecht, he was priced over $500.
Surprisingly, Cole left the shop with a drug designed to stop when he launches an asthma attack, but without Advair Diskus Inhaler, he prevented the attack from happening in the first place.
Five days after last year’s pharmacy visit, Cole suffered a severe asthma attack, stopped breathing and collapsed. He never regained consciousness and died. The doctors attributed his death to asthma.
Cole Schmidtknecht, left, his mother, Shanon, his brother, Dane, father, Bill. (Courtesy of the Schmidtknecht family)
His parents, Bill and Shannon Schmidt Knecht, blame what they say is a dysfunctional system that allows drugs to change prices overnight without notice.
Some insurance plans that many Americans don’t know about were responsible for the sudden rise in inhalation prices for call. A pharmacy benefits manager, or PBM, is the mediator who manages the drug behind the scenes where it is on the insurance company’s list of eligible drugs (called the formula).
Gerald Anderson, professor of health policy and management at Johns Hopkins University’s Bloomberg School of Public Health, says “rebates” from drug makers will add or subtract drugs through a process that highlights the benefits of pharmacy benefits managers.
PBMS is “looking for the most money-making medicine,” Andersen said
“It’s crazy that’s happening in America,” Bill Schmid Knecht said. “It’s not broken. It’s designed to work like this. It’s just hurting us.”
Schmidtknechts is pushing for a law that requires a 90-day warning when an insurance company’s official changes. They are also suing Optum RX, a PBM who stole Cole’s Advair Diskus from his insurance company’s formulary, and Walgreens, his pharmacy.
The lawsuit alleges that the call did not get a 30-day change notice that it required, doctors didn’t contact him, and that the pharmacy did not offer Call a more affordable option.
Schmidknechts said Cole left the pharmacy with only a rescue inhaler. But Dr. David Bernstein, an immunologist and professor of immunology, allergy and rheumatism at the University of Cincinnati, said that if the asthma attack is severe, he is not strong enough to keep someone out of the emergency room.
“It was empty next to his house, his bed,” Bill said of the emergency inhaler.
In a motion to dismiss Schmidkneckt’s case, Optum RX expressed “deepest sympathy” for Cole’s death, saying federal law prohibits cases from being brought to state court. Optum also said there are three options available, each with a $5 Copay, and the system has directed Walgreens to contact Cole’s doctor about those options.
Walgreens also provided “deepest sympathy” and cited privacy as to why they couldn’t discuss the details of the case. In a statement, “In general, if the drug is not covered by insurance, pharmacy staff can work with plans, patients and/or prescribers to process and distribute prescriptions if possible.”
Cole is now 24 years old. His parents are almost broken when they talk about everything he might have been doing.
“He was so young, he had his whole life before him,” Shannon said. “And it was so preventable and so unnecessary.”
In the case of Schmidkneckts, it is about policy changes. “It’s Cole’s justice, of course, but greater than that, justice for all of us,” Shannon said.
Getting that change is not easy.
In the US, only three PBMs process 80% of their formulations. And the majority of the PBM Formulae Playbook is a secret, Anderson said.
Cole Schmidtknecht. (Courtesy of the Schmidtknecht family)
This way, patients will not learn how PBM makes decisions about drugs and why there are no more drugs in the formulary.
Often, from patients to pharmaceutical companies to insurance companies, they are not aware of the details of the decisions that PBM is making.
“They don’t share this information widely because it is considered a trade secret,” Anderson said.
The deal is “negotiations between the pharmaceutical company and PBM,” Anderson said. “Pharmaceutical companies want drugs in their prescriptions in a favorable position. PBM wants to get the largest rebate possible.”
“Rebates” are the difference between the list price of a drug and what PBMs can buy, and could be “a lot less than the list price.”
If there are multiple drugs that do essentially the same thing, there is a bid war, usually a quiet war.
PBMS rewards can be huge. A Federal Trade Commission report released in January discovered over the past few years that over the past few years, the three biggest PBMSs – CVS Health Caremark RX, Cigna’s Express Scripts and UnitedHealth Group’s Optum RX, have inflated the costs of billions of life-saving drugs. Companies rebutted that the FTC report’s conclusions were misleading.
In January, CVS Health said in a statement that “drawing broad conclusions from cherry blossom “general specialty” outliers is inappropriate and misleading,” and that “the company’s number one priority is to make healthcare more affordable.” OptumRx said it helped eligible patients save $1.3 billion last year, and estimated the median out-of-pocket payout for these patients was $5.
To remember Cole, both his parents had tattoos that looked like they had been painted ink on his wrists. When they feel overwhelmed, they look down at it and remember the change they want to honor him.
“It means that we can continue to live out of Cole and we can still be happy. “I continue to try to remind you that happiness, joy and sadness can coexist.”
NBC News provides in-depth reporting on the systems surrounding the healthcare and insurance industry. If you are dealing with invoices or refusals to compensate, care or repairs that appear to be offline for health, home or automobiles, please email costofdenial@nbcuni.com.
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