KARE 11 Investigates: Prescription price shell game

KARE 11 Investigates: Prescription price shell game

GOLDEN VALLEY, Minn. – A major company has rolled back the price of a potentially life-saving prescription drug after a KARE 11 News investigation.

But the decision has some people asking how often we’re being overcharged on other medicines.

Curt’s Story

It started with Curt Burshem.

Back in November he told us CVS Caremark had jacked up the price for a prescription drug a family member needed for a kidney disorder.

 

"When I see a company doing this crap, it makes me insane,” he said.

But, now, CVS has reversed the price high.

"Justice had been served,” Curt told us.

When Curt originally went to the CVS pharmacy in Maple Grove last Spring, the initial 30-day supply cost about $.87 per pill.

But when he followed his insurance company’s advice and ordered a 90-day supply through the mail, CVS Caremark increased the price to more than $6 a pill.

That’s when Curt contacted KARE 11.  We showed his bills to one of the nation’s leading experts on prescription pricing.

RELATED: What's the real cost of prescriptions?

"This particular case is a perfect example of a shell game,” said Dr. Stephen Schondelmeyer, who heads the Department of Pharmaceutical Care and Health System at the University of Minnesota.

Professor Schondelmeyer told KARE 11 it is one of the ways the prescription drug industry “games” the system.

And after our story aired, CVS rolled back the price and gave Curt a refund.

"Surprisingly, Caremark dropped their price,” Burshem said. “I was grateful for that.”

CVS Caremark dropped the price from more than $6 a pill to just 74-cents a pill, even lower than the original 30-day supply.


‘Huge Fraud on the Government’

Was the price hike Curt uncovered the tip of the iceberg?

"It’s a huge fraud on the government and on us,” says Minneapolis attorney Jim VanderLinden.

He was one of the lawyers who filed a law suit in 2008 accusing CVS of defrauding Medicaid by over-charging on prescriptions.

"They’re taking more money than they deserve,” he said.

CVS was supposed to charge the government the same low price it gave some private insurance plans.  But Twin Cities pharmacist Stephani LeFlore noticed they weren’t and blew the whistle.

"Fortunately Stephani looked at it and said, ‘this is wrong’,” VanderLinden said.

CVS denied wrong-doing claiming it wasn't intentional, but the company agreed to pay $17.5 million to settle the suit.  Some of that money went to Minnesota, reimbursing the state for the overcharges.

Walgreens settled a similar suit.

Just last year a federal class action lawsuit accused CVS of “fraud” for not giving people who have private insurance the same low price they charge people without insurance who sign up for a so-called prescriptions savings club that anybody can join.

“You’re a preferred club member by raising your hand. Everyone and anyone is eligible,” VanderLinden said.

CVS denies doing anything wrong.  And so does Kmart pharmacies. They were sued for using prescription clubs to avoid giving insurance customers low prices, too.   Both lawsuits are still pending.

“The pharmacies admit they’re doing it, but they just come up with the argument that because they call it a prescription savings club they can do it because that’s not the general public,” he said.

It’s costing us all

And one way or another, all of this is costing money.  Lots of it.

“The overall cost is going up pretty tremendously,” said Carolyn Pare, President and CEO of Minnesota Health Action Group.

Her organization advocates for local companies that pay a big chunk of their employees’ health insurance.

As health costs continue to rise, some businesses wonder whether they’re victims of prescription price-gouging, too.

“This could be the straw that breaks the camel’s back. This is so hugely expensive,” she said. She estimates heath care now makes up about 18 percent of company budgets.

For the last several months, the group has met with employers for hours at a time trying to untangle the complicated issue of prescription drug costs.

“It’s harder to follow the money because, I’ll characterize it this way, the supply chain is extremely convoluted,” she said.

“At the end of the day, every consumer pays for this,” she said.  “This isn’t something that goes away. All of us are feeling the pinch.” 

Meanwhile, Curt Burshem has a tough time trusting prescription prices.

"It kind of opened my eyes a lot,” he said.

Opened his eyes and his employer’s.  

"They actually said they were glad that I brought it forward, because it revealed some other issues with other drugs that they were doing this on,” he said.


JOIN THE CONVERSATION

To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment