Exploring Human Potential

Arthur Sackler’s Ghost Has Access To Your Personal Health Data.

Posted on | May 25, 2022 | No Comments

Mike Magee

When Americans first bet the nation’s health on an entrepreneurial system of care, we grossly underestimated just how far certain individuals and institutions would go in pursuing financial incentives, how benefits might be overstated and risks downplayed, and how side effects including drug addiction and lost productivity could bring a large portion of society to its knees. We also grossly underestimated just how much such a system could be gamed and, in that gaming of the system, how pivotal a player one highly determined individual might be. But in this market-driven health care system, Arthur Sackler continues to demonstrate just how wealthy one can become by advantaging patients and their diseases.

He’s been dead since 1987, but his ghost continues to access your personal health data, pushes medical consumption and over-utilization, and expands profits exponentially for data abusers well beyond his wildest dreams. Back in 1954, he and his friend and secret business partner, Bill Frohlich, were the first to realize that individual health data could be a goldmine. That relationship would still be a secret had it not been exposed in a messy family inheritance feud unleashed by his third wife after Sackler’s death.

That company, IMS Health, was taken public and listed on the NYSE on April 4, 2014, transferring $1.3 billion in stock. I’ll come back to that in a moment. But in the early years, the pair realized that the data they were collecting would multiply in value if it could be correlated with a second data set. That dataset was the AMA’s Physician Masterfile that tracked the identity and location of all physicians in America from the time they entered medical school. 

Those doctors were largely unaware that they had been assigned an identifier number early in their career, or that they were being tracked, or that the AMA was profiting from the sales of their information. With this additional information, IMS information products helped inform companies commercialization plans, their pharmaceutical marketing and sales, and eventually the targeting of physicians most likely to overprescribe Oxycontin.

After Arthur Sackler’s death, the company was sliced and diced, sold and resold, merged and divested. In May 2016, IMS merged with Quintiles with ownership at 51.4% IMS and 48.6% Quintiles. The resulting company was valued at  $17.6 billion and called QuintilesIMS. On November 6, 2017, it was renamed IQVIA. 

Two decades earlier,  Congress had passed HIPAA , designed to protect patient’s personal health information, but leaving health care organizations (not patients) in control of that data. In a compromise, those organizations were permitted to sell and mine aggregate data as long as it was detached from personal identifiers such as names, birthdates and ZIP codes.

Under the mantra of “de-identification,” the Medical-Industrial Complex went to work. One of the most successful of the lot was a West Coast start-up, MedicaLogic, which created a shared patient case database fed by thousands of doctors nationwide.  The doctors were assured that the data housed in their proprietary medical record system was de-identified and intended for altruistic purposes. But its commercial worth quickly became evident resulting in a sale to GE Health in 2002, becoming the “must-have” MQIC database. 

By 2013, it had been six-figure licensed to over 500 corporate clients and included focused marketing and sales insights from data mining the records of 25 million de-identified Americans over a 15 year span. Its premier customer was QuintilesIMS, now generating $4 billion in annual revenue, employing 33,000 employees and running the clinical research (largely overseas) operations for 20 of the largest pharmaceutical companies.

QuintilesIMS, now IQVIA, was the owner of MarketScan, the domicile for a 270 million Americans-strong health insurance claims repository. The original creator of MarketScan was Truven Health Analytics. IQVIA took the data from GE’s MQIC database and merged it with Truven’s MarketScan with an aim of re-identifying your health data, thus vastly expanding its commercial value. The results were alarming. As an internal GE memo later revealed, the cross reference with Tureen data allowed re-identification of the original patient source with “95% accuracy.”As one investigative report noted, “The unsettling part was how precisely the patients were flagged in another dataset, with near perfect accuracy…”

GE’s internal investigation caused some consternation in the firms legal wing, but they eventually concluded they had not technically violated HIPAA because the manipulations were one step removed from direct patient data collection. GE’s finance department was much relieved. GE’s health database and proprietary software was sold to New York private equity firm Veritas Capital, (who in the past had also bought and sold Truven) which in turn resold the entire medical records business for $17 billion on the open market.

Channeling their inner Arthur Sackler, IQVIA (formerly Quintiles, formerly IMS) justified their actions, saying they are all about improving patient outcomes by identifying what treatments work best for what diseases. What all now admit behind closed doors is that HIPAA is hopelessly outdated, and that the glaring loopholes have been identified and commercially advantaged. 

In many respects, this is old news. In 1957, when Arthur Sackler appeared under oath before the Kefauver Commission in January, 1962, he lied through his teeth, denying his ownership of IMS. Now 35 years later, his ghost and the IMS progeny continue to haunt our personal health data.

What Have We Learned About Epidemics in America?

Posted on | May 16, 2022 | No Comments

Mike Magee

Listen to Lecture (1 hour) HERE.

Last week’s online lecture, The History of Epidemics in America, sponsored by LeMoyne College, was a great success, attended by well over one hundred registrants. The transcript of the entire lecture is available online for those interested in a relatively deep dive. But for those who are interested and time-limited, here is the content of the final two slides summarizing in 15 learnings and takeaways from six months of research.

  1. Epidemics, as historians have emphasized are “social, political, philosophical, medical, and above all ecological events.”
  2. Competing and complimentary species cycles, in pursuit of nutrition and reproduction, maintain or distort ecological balance.
  3. Populations initially respond to epidemics with fear and flight. Scapegoating and societal turmoil are common features. Diseases disadvantage the poor, the weak, and those without immunity or prior exposure.
  4. Epidemics often travel side by side with warfare in transmitting and carrying microbes, and exposing vulnerable populations. Historically, epidemics have repeatedly played a role in determining the ultimate outcomes of warfare and conflict.
  5. Throughout history, scientific advances have – by enabling travel, congregation, and entry into virgin territory – triggered epidemics, but also provided the knowledge and tools to combat epidemics.
  6. Domestication and sharing of animals has enhanced the introduction of microbes to populations vulnerable to epidemic disease.
  7. Disease, accompanied by aggression, has been the major factor in the destruction of native cultures and has decimated native populations in the Americas.
  8. Slavery was in large part a response to workforce demands created by the epidemic eradication of native populations intended to serve as indentured servants on large agricultural plantations that raised and exported highly lucrative products into Old World markets.
  9. Epidemics often result in secondary consequences. For example, Yellow Fever and the defeat of the French in Saint-Domingue led to Napoleon’s divestment of the Louisiana Territory. Struggles to control and explain the Yellow Fever outbreak in Philadelphia in 1793 helped define the emergence of two very different branches of American Medicine over the next century.
  10. Scientists defining “germ theory” and social engineers leading the “sanitary movement” reinforced each other’s efforts to lessen urban centers vulnerability to epidemics.
  11. Immunization has a long and controversial history. As enlightened public policy, it has saved countless lives. It can, as illustrated by Justice John Marshall Harlan’s 1905 decision in Jacobson v. Massachusetts, create uncomfortable legal precedents and unintended consequences as in Justice Oliver Wendall Holmes 1927 decision in Buck v. Bell.
  12. The U.S. scientific community prematurely declared victory over communicable diseases in the early 1960’s.
  13. In the wake of HIV/AIDS, some scientific leaders actively warned of ongoing population wide vulnerabilities beginning in 1992. 
  14. Genetic reverse engineering technologies empowering “gain-of-function” led to Consensus Statements in 2014 of potential disastrous consequences, and epidemics that would be difficult to control. High speed travel, climate change, warfare induced human migration, and dysfunctional health care systems make epidemics more likely in the future.
  15. The U.S. Health Care System in initial Presidential leadership, strategic operation, mitigation, and delivery of acute services failed on a large scale when confronted with the Covid-19 pandemic. Many of the over 1 million U.S. casualties were preventable.

Promoting Contraception vs. Banning Abortion – A Wiser Choice.

Posted on | May 12, 2022 | Comments Off on Promoting Contraception vs. Banning Abortion – A Wiser Choice.

Mike Magee

Dr. Linda Rosenstock has an M.D. and M.P.H. from Johns Hopkins, and was a Robert Wood Johnson Clinical Scholar. She is currently Dean Emeritus and Professor of Health Policy and Management at UCLA’s Fielding School of Public Health, but also spent years in government, and was on President Obama’s Advisory Group on Prevention, Health Promotion and Integrative and Public Health.

In the wake of the release of Justice Alito’s memo trashing Roe v. Wade, she was asked to comment about the status of abortion in America. Here is what she said:

“The broader the access to proven family planning methods, the lower the unintended pregnancy rate and the lower the abortion rate. We can’t underestimate the role of educating and empowering women – and men – about these issues.”

These are not simply the opinions or insights of a single health expert. They are backed up by the following facts:

1. Since 1981, abortion rates in U.S. women, age 15 to 44, have declined by nearly two thirds from 29.3 per 1000 to 11.4 per 1000.

2. Approximately half of all pregnancies in the U.S. are unintended.  Of those unintended, approximately 40% of the women chose to terminate the pregnancy by abortion – either procedural or chemically induced. 

3.  The decline in the number of abortions has coincided with increased access to long-acting reversible contraception, including IUD’s and contraceptive implants. These options are now safe, increasingly covered by insurers, and more accessible to at-risk populations.

4. The increasing inclusion of sex education in middle school and high school curricula has been accompanied by a decline in high school sexual activity by 17% between 2009 and 2019.

5. There were 629,898 abortions recorded by the CDC in 2019. For every 1000 live births that year, there were 195 other women who chose to terminate their pregnancies. Almost half of the 1st trimester abortions are now chemically induced through Plan B-type pills.

What is clear from these figures is that knowledge and access to contraception is the best way to decrease the number of abortions in America. We’ve known this for some time. But when push comes to shove, the actions of Right to Life advocates including conservative Catholics and Evangelical Christians, have (by their actions) revealed that a broader agenda than simply eliminating abortions is at work here. That broader agenda includes patriarchal control over women’s sexuality and birth rates in America.

That contraception is safe and effective, and reinforces women’s autonomy and entry in the workplace, is no longer debatable. The options for birth control have expanded as well. Contraceptive reversible implants are now chosen by 16%, IUDs by 21%, and operative tubal ligation by 28%.

If one looks at the track record of those leading the charge to eliminate Roe v. Wade (in and out of the Supreme Court), including De Santis level book sanctions, pedophilia fantasia, insistence that failed “abstinence-only” sex education works, and highly organize assaults on women’s services provided by Planned Parenthood, it is reasonable to assume that Alito’s assurances that overturning privacy precedents applies only to abortion are not trust worthy.

Justice Alito’s reliability should be viewed through the lens of the testimony provided by Justices Kavanaugh, Barrett, and Gorsuch, under oath, on the topic during their confirmation hearings. Alito and these co-signers on his recent draft assure that Roe v. Wade and Planned Parenthood v. Casey are different since “[a]bortion destroys . . . potential life” and “none of the other decisions cited by Roe and Casey “involve the critical moral question posed by abortion.” 

But the history and performance of these five Justices, their original and current supporters, their documented religious orthodoxy, and the web of conservative schools and think tanks that nurture their well-entrenched biases all suggest “buyer beware.”

Other recently granted rights under these privacy precedents include:

Paraphrasing the proverb from a book called The Court and Character of King James by Anthony Weldon, 1651,: “Fool me once, shame on you. Fool me twice, shame on me.”

Will Catholic Women Accept Second Class Status?

Posted on | May 4, 2022 | 10 Comments

Mike Magee

In this week’s New York Times, in an article titled, “Overturning Roe is a Radical, Not Conservative, Choice,” conservative columnist, Bret Stephens, lays out a reasoned summary of the current controversy over a leaked Supreme Court decision that addresses the survival of Roe v. Wade.

His account of the medical history, however, includes a fundamental error – both in fact, and in timing. In the piece, Stephens writes about the 1973 decision, “It set off a culture war that polarized the country, radicalized its edges and made compromise more difficult.” 

Well, not exactly. As I describe in my 2020 book, CODE BLUE, only a small segment of religious leaders from one religious denomination voiced opposition to Roe v. Wade in 1973, and their opposition had been long-standing, active and vigorous.

That denomination was Roman Catholicism, the religion of choice for just 22% of Americans, but also the religion that 7 of our current 9 Justices were born into, and all five signatories on the recent leaked decision. That leaves only Elena Kagan who is Jewish, and incoming Justice Ketanji Brown Jackson who identifies her religion as non-denominational Protestant.

As opposed to Southern Christian Evangelicals, who came relatively late to the abortion issue, Roman Catholics have a long history of activism when it comes to control over women’s bodies and their sexual behavior. The Catholic Church, patriarchal, vertically integrated and highly centralized, has been waging a century-old pitched battle against “artificial contraception,” which it views as not only interfering with God’s plan and limiting the scale of future parishioners, but also challenging priestly authority.

Birth-controllers in the past were lumped with “adulterers, fornicators, prostitutes, drunkards, Mass Skippers” who had given way to “madness of the senses.” The issues of birth control and women’s health not only defined the boundaries of priestly authority; they were the fundamental differentiating features separating Catholic hospitals from their competitors. These institutions, which today make up more than 12 percent of US hospitals, prohibited instruction in the use of contraceptives and procedures like vasectomies and tubal ligations. Most important, they outlawed the performance of abortions and aggressively campaigned against the legalization of the procedure and have remained in the lead in attempts to overturn Roe v. Wade. Once run by nuns “in the service of God,” these hospitals are predominantly under secular management these days, with their boards tightly supervised by Catholic bishops.

Evangelical Christians, in contrast, came late to the struggle against birth control and legalized abortion. As recently as 1968, the membership of the Christian Medical Society refused to endorse a proclamation that labeled abortion as sinful.  In 1971, America’s leading conservative religious organization, the Southern Baptist Convention, went on record as encouraging its members “to work for legislation that would allow the possibility of abortion under such conditions as rape, incest, clear evidence of severe fetal deformity, and carefully ascertained evidence of the likelihood of damage to the emotional, mental, and physical health of the mother.”

In 1973, both the Southern Baptist Convention and the Christian Medical Society chose not to actively oppose the Supreme Court ruling against a Texas law prohibiting abortion known as Roe v. Wade, and reaffirmed that position in 1974 and 1976. The Southern Baptist Convention’s views on abortion were part of its long-standing support for the separation of church and state, and Baptist medical communities largely opposed the idea of churches and their pastors wading into delicate health care issues.

In addition, abortion was an issue long associated with “the other team,” namely Roman Catholics. To take up abortion as a moral (and political) issue would require cooperation with the very group that Protestantism had long ago risen up in protest against. 

But in 1970, a Nixon-era journalist named Paul Michael Weyrich arrived on the political scene, and with beer magnate Joseph Coor’s help, launched the Heritage Foundation. stating “The New Right is looking for issues that people care about. Social issues, at the present, fit the bill.”

It took a decade, and false starts including Anita Bryant’s anti-gay campaign and forays into “book-burning”, but in the summer of 1980 the self identified “Moral Majority” listened intently to then candidate Ronald Reagan address the Christian Coalition’s annual policy meeting and say, “I know you can’t endorse me, but I want you to know that I endorse you and what you are doing.” That included defeating Roe v. Wade.

This new Moral Majority got “their man” (a divorced, completely secular product of Hollywood and corporate America) into the White House. Whereas 61 percent of conservative Christians had voted in the 1972 presidential election, 66 percent voted in both 1976 and 1980, and they voted overwhelmingly Republican. Motivated by anti-abortion sermons delivered by”Father-priests” from Catholic pulpits across America, Catholics voted in favor of Reagan, 51% to 40%. 

John Gehring, a director of the clergy network, Faith in Public Life, sees the effort to elect Catholic Justices as highly organized through investment in Catholic law schools and networks that actively feed the pipeline of candidates. “The problem is not how many justices are Catholic. The cause for alarm is the court’s ideological lurch to the right, and what that means for health care, voting rights and other moral issues at stake in this election.”

In 1980, the new fundamentalist tag team of Evangelical Christians and conservative Roman Catholics espoused conservative politics first, social issues second, and fundamentalist religious fervor a distant third. Four decades later, as book banning, gay-shaming, and undermining women’s autonomy return, they appear to have reversed their priorities.

McKinsey, the FDA, and the Medical-Industrial Complex.

Posted on | April 26, 2022 | 2 Comments

Mike Magee

In today’s New York Times, Dr. Joshua M. Sharfstein, professor at the Bloomberg School of Public Health at Johns Hopkins, and principal deputy commissioner of the Food and Drug Administration from 2009 to 2011, recounted global consulting firm McKinsey’s simultaneous working relations with the FDA and Purdue Pharma. 

The Congressional investigation currently underway reveals that  McKinsey had been advising the FDA on how to reorganize its opioid oversight efforts while simultaneously imbedding a “mini-army” of advisers in Purdue Pharma’s Connecticut headquarters. 

Sadly, such evidence of an integrated career ladder inside the Medical-Industrial Complex is neither a surprise nor news, but rather a long established pattern of behavior that dates back 70 years.

Between 1950 and 1957, advertising revenue in JAMA for pharmaceutical ads increased seven-fold. At the top of the list was Pfizer and its new antibiotic, Terramycin. Between 1950 and 1952, 68% of all JAMA broad spectrum antibiotic ads were funded by Pfizer. Between 1952 and 1956, nearly every JAMA issue included Pfizer’s in-house magazine titled “Spectrum”.

The push paralleled an increase in Pfizer detail men from 8 to 2000 (including medical students). They targeted doctors and hospital pharmacies, and developed a sophisticated range of Continuing Medical Education (CME) materials for the first time. Pfizer’s agency of record? The William Douglas MacAdams Advertising Agency. The principal on the account? Arthur M. Sackler.

Arthur’s groundbreaking innovations would, in the future, be enshrined in the Medical Advertising Hall of Fame. Their tribute included the following: “Dr. Sackler was a psychiatrist who published 140 scientific papers on neuroendocrinology, psychiatry, and experimental medicine.” What they didn’t mention is that the vast majority of these were self-published in journals and “medical newspapers” that Sackler himself had launched as promotional vehicles.

During this same period, his business dealings and associations were secretive and conspiratorial. He created hidden corporations, and listed them under his first wife to hide his own ownership. Behind the scenes, he colluded with his supposed arch-rival, agency head Bill Frolick, whose company International Medical Statistics (IMS) would marry databases with the AMA physician masterfile, reselling the progeny to pharma companies, and allowing them to track individual physician prescribing behavior. His own secret ownership stake in IMS would be revealed after his death. But while alive, he quietly purchased the near dead pharmaceutical manufacturer, Purdue-Frederick, and mothballed it for future use.

In a single decade, Sackler also invented the pharmaceutical rep – a business attired professional “detail man” who would visit doctors offices with branded trinkets and provide the scientific details and new drug samples doctors needed to keep up; and launched pharmaceutical funded “scientific advisory boards” and speakers bureaus that would assist friends like heart surgeon Michael DeBakey as they climbed the integrated career ladder from academia to industry to government and back again.

In 1957, he aired the first drug advertorial on television, an extravaganza describing a new mysterious condition called “Ataraxia” which kept stressed out business men in a state of psychic distress preventing sleep and relaxation. Sadly, no cure was mentioned in the broadcast. That came a few months later when Pfizer released their new tranquilizer, Atarax.

By 1960, he represented two new drugs that risked cannibalizing each other – Valium and Librium. He skillfully promoted one for nervous tension and the other for psychic stress, making both record breaking success stories. By then, 1 in every 7 Americans were on tranquilizers.

But for Arthur, this was just the beginning. He had a grander vision, and had already laid the seeds that would create wealth beyond his wildest dreams, and eventually threaten the health and stability of our nation.

Scratching at the surface of Arthur M. Sackler’s narrative reveals the rather staggering challenge we face in addressing the systemic issues underlying what appear to be isolated occurrences like McKinsey’s conflicts of interest. In Arthur Sackler, whose praise and awards, bestowed so luxuriously by the highest levels of American Science and Medicine, in equal measure to the resources he provided to these very same bodies, can be observed the full tangle that is the Medical Industrial Complex.

Over a period of a half century, under the title of beneficent physician, Arthur Sackler built a vertically integrated empire that created pharmaceutical demand, magnified and multiplied it, and then sold into it as it rose. And at every step along the way, he was aided and abetted by those who coveted the Sackler brand.

Modern day consulting firms like McKinsey are simply enablers – the sticky middlemen who hold it all together. Those who bear ultimately responsibility are their funders at every rung of these integrated career ladders – including scientific leaders in academic medicine, corporations, and government.

Dara’s “Hero Quest” – Should He Push For Universal Health Care?

Posted on | April 26, 2022 | Comments Off on Dara’s “Hero Quest” – Should He Push For Universal Health Care?

Mike Magee

Joseph Campbell, who died in 1987 at the age 83, was a professor of literature and comparative mythology at Sarah Lawrence College. His famous 1949 book, “The Hero With a Thousand Faces” made the case that, despite varying cultures and religions, the hero’s story of departure, initiation, and return, is remarkably consistent and defines “the hero’s quest.” Bottom line: Refusing the call is a bad idea.

George Lucas was a close friend and has said that Star Wars was largely influenced by Campbell’s scholarship. On June 21, 1988, Bill Moyers interviewed Campbell and began with a clip from Star Wars where Darth Vader says to Luke, “Join me, and I will complete your training.” And Luke replies, “I’ll never join you!” Darth Vader then laments, “If you only knew the power of the dark side.” 

Asked to comment, Campbell said, “He (Darth Vader) isn’t thinking, or living in terms of humanity, he’s living in terms of a system. And this is the threat to our lives; we all face it, we all operate in our society in relation to a system. Now, is the system going to eat you up and relieve you of your humanity, or are you going to be able to use the system to human purposes.”

Systems gone awry? Think Putinesque Russia, or Psycho-pernicious Trumpism, or Ultra-predatory Capitalism.

Dara Kharowshaki, the CEO at Uber, who took over the company from uber-bro, Travis Kalanick, is a fan of Campbell’s and understands the journey of a hero – departure, initiation, return. Perhaps that is why he defines “movement” as fundamental to life…adding deliberately the qualifier “movement in the right direction.” In an interview in December, 2021, with Brian Nowak, Equity Analyst, U.S. Internet Industry, for Morgan Stanley, he pushed for corporate engagement in a range of issues including “sustainability, safety, equity, and anti-racism – these are all issues that go to the core of who we are, and our identity.” 

How did health care escape that list, especially considering the companies investment in “Uber Health” – a health care delivery service promoting speed, care coordination, privacy, and cost-effective and reliable transport to and from care-giving brick and mortar? 

It may have something to do with the fact that Uber has fought tooth and nail to avoid providing health care as a benefit to its drivers. In 2020, the company joined Lyft, DoorDash and other gig companies in throwing $205 million into a lobbying effort in California titled “Yes on 22”.

Background: “California, with its estimated 1 million gig workers, has been the largest U.S. market for that type of labor. Officials said the workers were deprived of health care, a minimum wage, job security, and basic protections against discrimination and sexual harassment. So legislators approved Assembly Bill 5 (AB5) in September 2019 to grant benefits to certain classes of gig workers, including Uber and Lyft drivers, by making them employees.” 

“Yes on 22” was industry’s counter-response. In their successful drive, where they outspent the opposition 10 to 1, “yes” actually meant “no” for drivers, further cementing their contractor status rather than requiring that they be treated as fully entitled employees. With this bit of trickery, designed by Republican pollster, Bill McInturff, they won by a 59% to 41% margin. 

The winners argue that Prop 22 is “preserving flexibility and pairing it with new protections.” In return for the contractor status they had to agree to subsidize health coverage for its California drivers who average 15 to 25 hours a week engaged as drivers or couriers to the tune of 41% of what standard health benefits would have been.

Dara may not be anxious to provide full health coverage to his workers, but he’s right that movement is essential to life – especially if by movement you mean access to health professionals, their institutions, their diagnostic equipment and their therapies. In this arena, Dara is caught in the middle of the “hero’s quest.”

He has passed through phase 1 and “departed” the dark brotopia world, and is currently brushing up against difficult choices within a stormy phase 2 “initiation.” 

This has included a rather embarrassing incident that occurred on May 26, 2021, when Uber drivers outside of California received an email (which began with the optimistic opening line “Its a great time to get health coverage,”) announcing that the company would be subsidizing their health coverage, only to learn in a hasty follow-up email that it was all an embarrassing error. It read, “Unfortunately, we made a mistake sending this email to you, as this policy only applies to drivers and delivery people in California. We sincerely apologize for this error.”

Without naming names, Dara has clearly kept his own list of Darth Vaders in Silicon Valley. As he sees it, “Some of them grew up too fast and some of them didn’t take responsibility for their power and I think now they’re being called to reckon… I think the age of ‘I built a platform, I’m not responsible,’ that time is over. And now the question is, what does the responsibility look like? Defining it and putting guard rails around it, I think that’s a healthy thing.”

But his enemies might reply, “You know what else is a healthy thing? Health insurance!”

As Dara himself would admit life’s a journey, and movement toward hero status is filled with bumps along the way. Will he make it to phase 3, a hero’s welcome on his “return?” Earlier this year he said, “Sometimes the system ‘works too well’: I think capitalism has its claws in our democratic societies in ways that has allowed it to overly optimize for its benefit.”

These are tough times to lead – no doubt. Keeping families together, processing fear and worry, expanding opportunity and productivity – all are worthy and essential goals that can only be realized if our citizens have access to health care. That would most certainly be a “move for the better.” So why not get behind universal health care, Dara?

You could be a true hero. As Joseph Campbell stated “Is the system going to eat you up and relieve you of your humanity, or are you going to be able to use the system to human purposes?”

PBM’s – Their Origins and Parentage.

Posted on | April 17, 2022 | Comments Off on PBM’s – Their Origins and Parentage.

With the controversy swirling over insulin pricing, and sticker shock for seniors meeting deductibles on their Medicare Part D choices, it’s useful to shine a light on PBM’s – their origins and parentage. They would, of course, prefer to remain in the shadows, managing a vast array of legal kickbacks with others within the Medical-Industrial Complex.


And yet they and their middlemen hold 6 of the top 25 spots in the Fortune 500. Here’s a starter course, excerpted from “CODE BLUE: Inside the Medical Industrial Complex” where the full story resides.

“When PBMs began, insurers and employers believed that this new entity might contribute to cost control by efficiently processing prescriptions, maintaining approved drug formularies, and holding down prices. But they soon realized that ownership of a PBM by a drug-maker, insurer, or a retail pharmacy giant allowed the owner to coordinate pricing decisions, see competitors’ pricing information, and favor some drugs over others in return for kickback payments, even if the consumer unknowingly was forced to pay more.

There are now about thirty different PBMs. But three major companies control 78 percent of the PBM market and service 180 million Americans. These opportunistic middlemen emerged from three different Medical Industrial Complex (MIC) industry sectors: a physician managed care group, a pharmacy corporation, and a pharmaceutical manufacturing company.

The first one, Diversified Prescription Delivery, was developed in 1988 by UnitedHealthcare, the insurance company that grew out of a physician-run managed care medical group called Charter Med, incorporated in 1974. They were the first to recognize that new information technology would revolutionize the health care industry. Where the WHO owned the ICD-9 diagnosis billing code databases, and the AMA owned the CPT procedure billing code databases, UnitedHealthcare ambitions were far more expansive–to control and mine patient databases themselves. From this perch, they were the first to develop pharmacy drug formularies, hospital admission pre-certification requirements, physician office software that predated electronic medical records, and tight controls on utilization beyond those of other HMO’s at the time. 

The realization that data now was king spread rapidly. A second PBM, PharmaCare, appeared as an offering from CVS in 1994, and in 2007 was renamed CVS-Caremark.  The third dominant PBM, mail order giant Express Scripts, has a complex parentage. It was formed from the purchase of a SmithKline Beecham’s PBM in 1999 and the addition of Merck-Medco in 2012.  Five years later, in 2017, Express Scripts reported revenue of over $100 billion compared with Pfizer’s $52 billion of revenue that year.

Their sphere of influence and market power derives from the fact that approximately 4.5 billion prescriptions are filled in the US each year. Americans’ appetite for legal drugs is close to insatiable. Just under 50 percent of US residents have filled a prescription in the last month, and 10 percent of our population currently takes five or more prescription medications.

Approximately $50 billion is expended each year in the manufacturing of these drugs, which move primarily through three giant wholesale distributors in the US—AmerisourceBergen, Cardinal Health, and McKesson—on their way to the retail pharmacy. Their combined revenue in 2015 was $378 billion for distributing the drugs to 60,000 pharmacy outlets, 63 percent of which are part of large retail chains. By 2017, their combined revenue reached $481 billion. 

PBMs are now the Grand Central Station of the legal trade of drugs and the primary processors of patient and insurance enrollee data. They negotiate the deals for each and every drug with pharmaceutical companies, the placement of those drugs on insurers’ and employers’ tiered insurer formulary drug lists, and the integration and management of utilization and cost strategies with pharmacies, insurers, and hospitals nationwide. Their cutouts and givebacks to both the drug and insurance industries, and negotiations with hospital systems, share the profits and are nontransparent. Nearly everyone is in on the deal—except the patient.”

keep looking »
Show Buttons
Hide Buttons