How the HIV scheme works
Bad apple pharmacists and managers understand the financial struggles of their customers, and exploit them for their own profit, said Amida Care Vice President of Pharmacy Terry Leach in an interview last year.
“If they’re low income this is a way to make some money,” Leach said. “They have food issues, nutrition issues, housing issues. There are a lot who are very stable but it’s tough to make ends meet living in New York as a poor person.”
For every pharmacist that gets busted at the end of a long investigation, others manage to evade prosecution while exploiting low-income customers.
“They’re taking advantage of us,” M. said. “The medications are worth thousands of dollars.”
Indeed, a single tablet of Atripla, Stribild and Triumeq — three of the most common antiretroviral treatments — costs between $92 and $104, according to the New York State Department of Health list of Medicaid reimbursable drugs. Each pill delivers a suite of medications in one capsule, a huge upgrade from the days when people with HIV had to take a handful of pills — often with damaging side effects — every day.
The individual pill prices mean that a 30-day supply wholesales for nearly $3,000, but the Average Wholesale Price, or AWP, is just the “sticker price” — no pharmacy ever actually pays it. Instead, pharmacy benefit managers and pharmacist trade groups serve as go-betweens, negotiating the retail price that pharmacies pay, Leach said.
Though the actual prices are based on the AWP, each pharmacy may pay a different amount depending on the insurance coverage they accept or which wholesalers’ rebates they submit, Leach said.
After the complexities of determining the actual price, the pharmacy derives profit from a simple math calculation: Reimbursement minus cost.
The profits are slim. Pharmacists may even take a loss on some medications, Leach said. But if a pharmacy gets reimbursed for a medication it did not actually buy, then the profit grows exponentially.
Therein lies the incentive for a few, dangerous pharmacy owners to buy back unopened HIV prescriptions.
Say a medication costs a pharmacy $2500 and the pharmacy receives a $2600 reimbursement from Medicaid. That’s a $100 profit. If they buy the entire 30-day supply of medication back from the customer, that means they can resell it and bill Medicaid for another $2600. The initial $100 profit just became $2700.
The pharmacist can then pretend to distribute the same medication to another customer who immediately hands it back. That’s another $2,600. If the pharmacy runs this trick for 60 customers a month, they can make $78,000. If they do that to sixty customers a month for a year, they can make $936,000 from fraudulent claims.
It’s usually not as simple as customers selling an entire month’s supply back to the pharmacy, however.
M., for example, said he would sometimes sell a handful of pills, which enabled him to make some extra money while taking his medication nearly every day. Six people selling five pills each will allow a nefarious pharmacist to repackage a full 30-day supply.
Other times, pharmacies will lighten the refill. For example, they may provide 28 pills instead of 30 and repackage the remaining two pills, said AIDS Center of Queens County Executive Director Rosemary Lopez. She said she works with clients to ensure they’re getting the medication they deserve, and that their insurance pays for.
Red flags
Lopez said pharmacies often pay customers to fill their HIV medication prescriptions and add a referral fee when that customer brings in someone new. The practice is illegal, but does not mean the person has stopped taking their medication.
Still, she said, it can be a red flag when people with HIV receive money from pharmacies.
“We ask, ‘Are you sure of what they’re giving you in the medication bottle?” Lopez said. “‘Where are they making the money if they’re giving you $100 back. Are you sure you’re getting the right pills and the right scripts?’”
M. said that long distances between home and pharmacy could also signal a problem.
“If a person lives in Washington Heights, but their pharmacy is out in Jamaica, Queens then something’s up,” M. said.
Law enforcement investigations are time-consuming, but there are easier ways to prevent this exploitation – HIV scheme, said Leach, from Amida Care.
Amida Care encourages pharmacists to package pills in individual blister packs, so they are more difficult to resell and easier to count than pills contained in bottles.
At times, organizations that serve people with HIV, like Callen Lorde, maintain in-house pharmacies. Service providers and physicians monitor how many times people are filling their prescriptions or how consistently they keep their viral load down. A fluctuating viral load can indicate that someone is not taking their medication consistently, Leach said.
Meanwhile, some organizations incentivize people who maintain undetectable levels of HIV with gift cards and other rewards.
“For my patients, it’s an acknowledgement — it’s even more than just the money. It’s, ‘You guys understand what I’m going through, you see my trouble,’” Poitevien from Housing Works said. “It’s huge for people to be recognized and see what they’re going through.”
