PBMs Stand in the Opioid Liability Crosshairs

A new decision out of Texas aims to hold PBMs accountable for their role in perpetuating the epidemic. Other municipalities are likely to follow suit.
By: | July 30, 2019

In 2017, the New York Times reported that drug overdoses, many related to the opioid epidemic, were expected to kill as many Americans as the wars in Vietnam, Iraq and Afghanistan combined.

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Now, deaths related to drug overdoses have fallen for the first time in nearly 30 years. But with opioids causing 47,590 overdose deaths in 2018 and synthetic opioids accounting for another 31,897 deaths, the pain of the epidemic is still being felt across many communities — more than a few of which have begun looking for someone to blame.

At first, it was primarily pharmaceutical companies that faced legal action for their role in creating the man-made crisis. Many speculated that prescribers and pharmacies would be next.

Now pharmacy benefits managers (PBMs) have landed in the public’s crosshairs for their role in perpetuating the flow of opioids into U.S. communities.

A judge’s order in Webb County, Texas will require the country’s three largest PBMs — Caremark, Express Scripts and OptumRX — to alter their national formularies so that they align with CDC guidelines regarding opioid prescriptions.

At the height of the opioid epidemic, these three PBMs managed reimbursements for over 90% of all prescription drugs.

This is the first case to hold PBMs accountable for their role in perpetuating the epidemic.

The decision is the result of a September 2018 motion by Webb County lead counsel, which called out PBMs for not doing more to prevent opioids from flowing into communities across the U.S.

“PBMs themselves readily acknowledge that the difference between taking a highly addictive drug for three days versus five days versus 20 or 30 or 90 days can be really significant to the patient. Even a few days extra of the script can translate into addiction.” — Joanne Cicala, lead counsel, Webb County, Texas

“PBMs have, throughout this crisis, had the ability to influence how pain medicine reaches those who are in pain,” said Joanne Cicala, lead counsel for Webb County.

“What we’ve seen when we’ve studied the [PBM’s] formularies is that often it was easier for a patient to access a dangerous, highly addictive opioid than an alternative form of pain relief that would be less addictive. Easier to get oxycontin, for example, than to get [prescription strength] acetaminophen,” she continued.

As a result of the order, PBMs will be required to alter their formularies so that doses of opioids are limited to 90 morphine milligram equivalents a day. Higher doses will require a doctor’s authorization. Prescriptions will also be limited to seven days, and PBMs will recommend minors receive prescriptions for no longer than 3 days.

“PBMs themselves readily acknowledge that the difference between taking a highly addictive drug for three days versus five days versus 20 or 30 or 90 days can be really significant to the patient. Even a few days extra of the script can translate into addiction,” Cicala said.

Long-duration opioid treatment continues to plague the workers’ compensation industry. An October 2018 study by the JAMA Network found that out of a cohort of 9,596 injured workers, 30% were still filling an opioid prescription 90 days after an injury.

The epidemic costs businesses from $26 billion to $54 billion per year in lost productivity and has caused many states to grapple with labor shortages in an already tight market, said Cicala.

She said that her clients in western Virginia have been deeply impacted by constriction of the labor pool, due to the “extraordinary influx of opioids” in the region.

Prior to the Webb County case, litigation on both federal and state levels has went after pharmaceutical companies to make up for these losses. Teva Pharmaceuticals settled with an Oklahoma court for  $85 million in 2019. Purdue Pharma paid the state another $270 million for issues related to the epidemic, proving once again that opioid liability often leads to massive settlements.

On the federal side, the FDA issued Purdue Pharma a record $600 million fine for deceptive advertising of opioids back in 2007.

Doubling Down on PBMs

According to Cicala, PBMs have become part of the focus for her opioid liability cases because they positioned themselves as “uniquely situated” to help prevent the flow of opioids into communities.

“[PBMs] acknowledged that there is an opioid epidemic and that it’s a national crisis and it needs to be addressed. Then, they went on to say, and this is mostly in their promotional materials … that ‘they were uniquely situated to help abate the opioid epidemic,’ ” she said.

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The Webb County case isn’t a one-off either. Cicala and her co-counsel at Sanford Heisler Sharp, LLC are representing Jefferson county, New York and over 50 municipalities in Virginia in cases related to the epidemic and PBMs are set to be included in their litigation.

Other states are also adopting Cicala’s strategies for holding PBMs accountable for their role in the epidemic. In Missouri, 20 counties have already adopted Cicala’s theories about PBMs into their complaints. If these cases are successful, other states are likely to follow their lead.

“The objective of those claims is to, is to secure consideration from the PBM, in the form of monetary damage to help the communities clean up this mess,” Cicala said.

“We’re hopeful that we’ll see utilization of less of non addictive products for long-term pain outside of the cancer end of life environments. we are hopeful that we’ll see a sharp decline, very sharp decline in addiction.” &

Courtney DuChene is a staff writer at Risk & Insurance. She can be reached at [email protected]

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The R&I Editorial Team can be reached at [email protected]