When 22-year-old Cole Schmidtknecht tried to get a refill on the inhaler prescribed by his doctor to prevent asthma attacks. The medication that had formerly cost him less than $70 at his Appleton, Wisconsin pharmacy was now priced at more than $500, according to Cole’s father, Bil Schmidtknecht.
Stunned, Cole left the store with a medication designed to stop asthma attacks once they start, but without the Advair Diskus inhaler he needed to prevent attacks from happening in the first place.
Five days after his pharmacy visit last year, Cole had a severe asthma attack, stopped breathing and collapsed. He never regained consciousness and died. Doctors attributed his death to asthma.
His parents, Bil and Shanon Schmidtknecht, blame what they say is a dysfunctional system where medications can change in price overnight and without notice.
A part of the insurance system that many Americans don’t know about was responsible for the spike in Cole’s inhaler price. Pharmacy benefit managers, or PBMs, are the middlemen that control behind the scenes which drugs will be on an insurance company’s list of covered medications (called its formulary).
They add or subtract medications through a process that emphasizes profits for the pharmacy benefit manager by way of “rebates” from drug makers, said Gerard Anderson, a professor of health policy and management at the Johns Hopkins University Bloomberg School of Public Health.
PBMs “are looking for the drug that makes them the most money,” Andersen said
“It’s insane that it’s happening in America,” Bil Schmidknecht said. “It’s not broken. It’s designed to work this way. It’s just hurting us.”
The Schmidtknechts are pushing for legislation that would require a 90-day warning when an insurance company’s formulary is changed. They are also suing Optum Rx, the PBM that took Cole’s Advair Diskus off his insurance company’s formulary, and Walgreens, his pharmacy, which, the Schmidtknechts say, didn’t offer Cole a way to control his asthma while another solution could be found.
Cole had a rescue inhaler to deal with attacks when they occurred. But that type medication by itself isn’t strong enough to keep someone out of the emergency room if the attack is severe, said Dr. David Bernstein, a professor in the division of Immunology, allergy and rheumatology at University of Cincinnati.
The lawsuit claims that Cole did not get the required 30 days notice of the change; that his doctor wasn’t contacted; and that the pharmacy didn’t provide Cole with any more affordable options.
The Schmidknechts said Cole left the pharmacy with only a rescue inhaler, which is used for quick relief. But that type medication by itself isn’t strong enough to keep someone out of the emergency room if the asthma attack is severe, immunologist Dr. David Bernstein, a professor in the division of immunology, allergy and rheumatology at the University of Cincinnati, said.
“It was empty at his house, next to his bed,” Bil said of the emergency inhaler.
In a motion to dismiss the Schmidkneckt’s lawsuit, Optum Rx expressed “its deepest sympathies” for Cole’s death and said federal law prohibits the case from being brought in state court. Optum also said three alternatives, each with a $5 copay, were available, and its system instructed Walgreens to contact Cole’s doctor about those options.
Walgreens also offered “its deepest sympathies and cited privacy for why it can’t discuss specifics in the case. In a statement, it added, “In general, in cases where a medication is not covered by insurance, pharmacy staff may work with the plan, patient, and/or prescriber in an effort to process and dispense the prescription if able.”
Cole would be 24 now. When speaking about all the things he could have been doing, his parents nearly break down.
“He was just so young and he had his whole life ahead of him,” Shanon said. “And it was so preventable and so unnecessary.”
For the Schmidkneckts, it’s about policy change. “Justice for Cole, of course, but bigger than that, justice for us all,” Shanon said.
Getting that change won’t be easy.
In the U.S., just three PBMs process 80% of prescriptions. And a big part of the PBM formulary playbook is secrecy, Anderson said.
That way, patients don’t learn how PBMs make their decisions about drugs and why a medication that had been on the formulary no longer is.
Often no one, from the patients to the drug companies to the insurers, is aware of the details of the decisions the PBMs are making.
“They do not share this information widely, as it is considered a trade secret,” Anderson said.
The deals are “a negotiation between the drug companies and the PBM,” Anderson said. “The drug company wants their drug on the formulary in a favorable position. The PBM wants to get the largest possible rebate.”
The “rebate” is the difference between the list price for a drug and what the PBM can buy it for, which can be “a very much lower number than the list price,” Anderson said.
When there are multiple drugs that do essentially the same thing, then there’s a bidding war, usually a silent one.
The rewards for the PBMs can be huge. A Federal Trade Commission report released in January found that, over the past few years, the three biggest PBMs — CVS Health Caremark Rx, Cigna’s Express Scripts and UnitedHealth Group’s Optum Rx — inflated the costs of numerous life-saving medications by billions of dollars. The companies countered that the FTC report’s conclusions were misleading.
In January, CVS Health said in a statement that it “is inappropriate and misleading to draw broad conclusions from cherry-picked ‘specialty generic’ outliers” and that the company’s “top priority is to make health care more affordable.” OptumRx said that it helped eligible patients save $1.3 billion last year and estimated that the median out-of-pocket payment for these patients was $5.
To remember Cole, both his parents had a tattoo just like his inked onto their wrists. When they feel overwhelmed they glance down at it to remember the change they want to make in his honor.
“It’s just everyone’s little reminder, you know, from Cole to just keep living and that we can still be happy,” Shanon said. “I keep trying to remind myself that happiness and joy and grief can co-exist.”
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