Caremark And Vytorin: A Conflict Of Interest
8 CommentsBy Ed Silverman // June 13th, 2007 // 8:30 am
Here’s a new twist on formulary preference. Caremark, the big pharmacy benefits manager, is being paid by the Merck/Schering-Plough joint venture to produce newsletters touting Vytorin. But the arrangement isn’t clear without wading through the small print, according to Newsday.
The newsletter states there were changes to Caremark’s formulary for meds with lower co-payments, and devoted more than a quarter-page to Vytorin - one of Caremark’s preferred drugs. Other cholesterol drugs on the list - Lipitor and generic forms of pravastatin and simvistatin - received only brief mention. Hmmm.
Not surprisingly, Caremark spokeswoman Carolyn Castel insisted payments haven’t influenced formulary decisions. But she didn’t explain why Caremark required outside money to pay for the newsletter; she wouldn’t reveal the amount of the payment and declined to explain why Vitorin received prominent display. There’s no “conflict of interest,” she wrote Newsday.
Really? A PBM is supposed to negotiate the best price for a drug on behalf of its clients, not accept additional money to promote one drug instead of another on its formulary. This smells like the same kind of problem that prompted government investigations and lawsuits over allegations of switching and undisclosed rebates.
Read what others have to say…
“There is always a potential for a conflict of interest when you see something like this,” says Larry Sasich, a Public Citizen consultant and assistant professor of drug policy at the School of Pharmacy at Lake Erie (Pa.) College of Osteopathic Medicine. “It might lead a patient to ask a doctor about Vytorin rather than (the drug) they’re already on. It sounds like an ad for Vytorin.”
Art Caplan, director of the Center for Bioethics at the University of Pennsylvania, called the arrangment “ethically odd. It’s very surprising because part of the credibility of Caremark and any PBM [pharmacy benefits manager] is to be seen as trying to recommend the best drug at the best price. It may raise an eyebrow or two about is there too close a relationship formed between what is supposed to be a prudent purchaser of drugs and manufacturers.”
Of course, promoting Vytorin could help the Merck/Schering-Plough venture capture a larger chunk of the $32 billion worldwide cholesterol market. Vytorin sales last year topped $2 billion.
The Caremark newsletter also provided information about high cholesterol. It also pointed to a study that found Vytorin - which contains two drugs, Zocor and Zetia - more effective in lowering LDL cholesterol than AstraZeneca’s Crestor, a single drug also known as rouvastatin. Crestor is not among the preferred cholesterol drugs listed in the newsletter, and using it would probably mean higher co-payments. Under most Caremark-managed plans, listed drugs have lower co-payments.
AstraZeneca spokesman Christopher Sampson said he was not familiar with the claims in the Caremark newsletter comparing Vytorin with Crestor.
When Merck lost its patent protection for another cholesterol drug, Zocor, in June 2006, cheaper generic forms of the drug, also known as simvistatin, posed a threat to the company’s revenues. To protect itself, Merck entered into a deal with India-based Dr. Reddy’s Laboratories Ltd., giving the company its Zocor formula and licensing it to make what it called “an authorized generic” in return for a revenue share.
Stan Katz, chief of cardiology at North Shore University Hospital in Manhasset, NY, advises patients not to switch from one drug to another simply to get lower co-payments. “The bottom line is I don’t think there is scientific data proving one statin to be superior to the other,” he says.
Skip Irvine, a Merck Schering-Plough spokesman, says the newsletter was an “educational program. It’s disease awareness. We do that through a number of different channels. We underwrite the cost of the mailing.”
Peter
WRONG!
A PBM is perfectly entitled and obligated to communicate info about the preferred drugs in its formulary.
Ed Silverman
Hi Peter,
You’re right. A PBM is entitled and obligated to communicate the info. I’m not questioning that.
The issue here involves the circumstances. Maybe those circumstances could be proven legit, but it does look dodgy.
After all, Caremark can afford to pay for a newsletter and write it off as SG&A.
Newsday gave Caremark an opportunity to explain, but the company wouldn’t do so, leaving everything open to question.
So keep ‘em coming. I need folks to keep me honest.
And thanks for writing,
ed
Dr. Remulac
This is a very common practice, and is done throughout the healthcare system - from the very small, local MCO/PBM to the nationwide MCO/PBM levels. Nine times out of ten, it is done at the request of the PBM/MCO! The real question is: Who actually wrote the piece? It is not uncommon for these to be ghost-written by the pharma co, and this is never disclosed. If it is fair-balanced, then this is ok, but if not….well, you know.
Ed Silverman
Hi Dr. Remulac,
Interesting observation, although I still wonder if that makes it correct. In the spirit of raising questions, however, I’d like to know why the PBM can’t pay for such things itself. In the process, the appearance of a conflict - or questions about it - could be avoided? You know, just because one does something, doesn’t make it right.
Anyway, thanks for stopping in. I appreciate the viewpoint.
Ed
Dr. Remulac
Ed - I agree that without transparency this looks too cozy to the casual observer. Like all organizations, if an MCO/PBM can get an outside party to subsidize the cost of something, they do!
Lillian Katz
This site doing nothing for the patients that have been dangerously harmed because of medication, especially statin medications. The same goes for all medications. This is for Ed Silverman—Doctors are not monitoring statin medications and when statin medications have adverse side effects doctors are not announcing the cause is statin medications. People are dangerous harmed and some will die because of this. It is crimmional and nothing is be done. Congress, the bush and previous administrations have allowed the corruption to exist in our jealth care system. Writing about this will not solve the problems. Investigation and truth honesty is the answer. When will that happen. Every governmet agency managed by appointe officals is corrupt. why don’t you, Ed heve a phone number to contact you? America needs ACTION to honest health care
Ed Silverman
Hi Lillian,
I’m doing the best I can. And you know how to reach me.
Regards
ed
Dr. Remulac
Lillian - ease up on our fearless moderator here. Without him, this blog would not exist and common people such as ourselves would not have a forum to voice our opinions. Given that, I’ll voice mine. Statins are the most extensively studied medications in the entire history of mankind. Yes, they do have risks, but their benefits FAR outweigh those risks. If you or a loved one have been personally harmed as a result of taking a statin, then you have my empathy. However, on the whole and taking a population perspective, you’re off-base.