With more attention on the impact of opioid addiction and the role of overprescribing, drug companies have come under more scrutiny for suspicious and sometimes unsavory marketing practices.
A lot of the spotlight has been directed toward Purdue Pharma, the makers of OxyContin. A company that already paid $20 million in a settlement with 27 states, attorneys general across the country many years ago.
Unsealed court documents indicate that the drug manufacturer went to great lengths to stop preauthorization of OxyContin in West Virginia despite concerns from public health officials.
The warning signs of what would become a deadly opioid epidemic emerged in early 2001. That’s when officials of the state employee health plan in West Virginia noticed a surge in deaths attributed to oxycodone, the active ingredient in the painkiller OxyContin.
They quickly decided to do something about it: OxyContin prescriptions would require prior authorization. It was a way to ensure that only people who genuinely needed the painkiller could get it and that people abusing opioids could not.
But an investigation by STAT claims that Purdue Pharma, the manufacturer of OxyContin, thwarted the state’s plan by paying a middleman, known as a pharmacy benefits manager, to prevent insurers from limiting prescriptions of the drug. The financial quid pro quo between the painkiller maker and the pharmacy benefits manager, Merck Medco, came to light in West Virginia court records unsealed by a state judge at the request of STAT, and in interviews with people familiar with the arrangement.
The strategy to pay Merck Medco extended to other big pharmacy benefit managers and to many other states, according to a former Purdue official responsible for ensuring favorable treatment for OxyContin. The payments were in the form of “rebates” paid by Purdue to the companies. In return, the pharmacy benefit managers agreed to make the drug available without prior authorization and with low copayments.
“That was a national contract,” Bernadette Katsur, the former Purdue official, who negotiated contracts with pharmacy benefit managers, said in an interview. “We would negotiate a certain rebate percentage for keeping it on a certain tier related to copay or whether it has prior authorization. We like to keep prior authorization off of any drug.”
Katsur said prior authorization programs do little to eliminate inappropriate prescribing by “bad doctors” and usually just create needless paperwork for doctors working in the best interest of patients. She said some doctors simply won’t deal with the hassle of a prior authorization program, resulting in some legitimate patients not getting the medication they need.
“You don’t want to make it harder for a doctor to prescribe when they are doing the right thing,” she said.
In addition to keeping OxyContin from being subject to prior authorization, the rebates paid to pharmacy benefit managers were used to guarantee favorable status for OxyContin on their listings of approved drugs, Kastur said. PBMs commonly place drugs in different tiers on these lists, called formularies. Some tiers are more restrictive and require higher copayments. Purdue wanted OxyContin placed in the least restrictive tier – and succeeded.
The relationship with Merck Medco was so important that Purdue moved Katsur to New Jersey so she could be close to Merck’s national headquarters, she said.
It is common for drug companies to pay rebates to gain preferential treatment from companies hired by insurance plans to manage prescription drug benefits, but in this case the arrangement removed a key safeguard in the system that may have slowed the growth of OxyContin as it became a national bestseller that eventually peaked at annual sales of $3 billion.
The former Merck Medco was purchased by Express Scripts in 2012. A spokesman for Express Scripts said no one currently at the company had knowledge of the West Virginia contract. A spokesman for Purdue Pharma said the company had no comment.
In McDowell County, where the court records from a state lawsuit against Purdue were unsealed, the local sheriff said prescription pill abuse is so rampant that the county plans to file a new lawsuit against painkiller makers.