To:
`
`Subject:
`
`Sent:
`Sent As:
`
`SUSAN B. MEYER(ipdocket@grsm.com)
`U.S. Trademark Application Serial No. 97253721
`BMIMP1095805
`December 22, 2023 04:54:51 PM EST
`tmng.notices@uspto.gov
`
`- MEDPAY
`
`-
`
`Attachments
`
`screencapture-en-wikipedia-org-wiki-Pharmacy_benefit_management-17032701255631
`screencapture-www-cvshealth-com-services-prescription-drug-coverage-pharmacy-benefits-
`management-html-17032702413471
`screencapture-content-naic-org-cipr-topics-pharmacy-benefit-managers-17032714575821
`screencapture-www-medicalnewstoday-com-articles-pharmacy-benefit-manager-
`17032715129961
`screencapture-www-commonwealthfund-org-publications-explainer-2019-apr-pharmacy-
`benefit-managers-and-their-role-drug-spending-17032716915371
`screencapture-www-wbur-org-onpoint-2023-12-14-pharmacy-benefit-managers-the-
`middleman-that-decides-what-you-pay-for-medications-17032718833331
`screencapture-www-vox-com-2023-5-10-23709448-what-are-pbms-pharmacy-benefit-
`managers-bernie-sanders-17032729117461
`screencapture-newcityinsurance-com-pharmacy-benefit-managers-and-their-role-in-rising-
`prescription-drug-costs-and-spending-17032737150021
`screencapture-www-sanabenefits-com-blog-health-insurance-101-what-is-a-pbm-
`17032737881961
`screencapture-www-forbes-com-advisor-car-insurance-medical-payments-medpay-coverage-
`17032760854641
`screencapture-www-hofflawyer-com-general-2017-11-29-med-pay-pip-insurance-
`17032785074861
`screencapture-www-chicagolawyer-com-blog-how-does-medical-payment-insurance-work-
`17032785754631
`screencapture-www-coplancrane-com-car-accident-lawyer-chicago-compensation-
`17032786840121
`screencapture-www-scottsdaleinjurylawyers-com-medical-payments-insurance-after-a-car-
`accident-what-you-need-to-know-17032788265951
`
`United States Patent and Trademark Office (USPTO)
`Office Action (Official Letter) About Applicant’s Trademark Application
`
`U.S. Application Serial No.  97253721
`
`Mark:   MEDPAY
`
`Correspondence Address:  
`SUSAN B. MEYER
`GORDON REES SCULLY MANSUKHANI LLP
`101 WEST BROADWAY, SUITE 2000
`SAN DIEGO CA 92101
`UNITED STATES
`
`

`

`Applicant:   MedImpact Healthcare Systems, Inc.
`
`Reference/Docket No.  BMIMP1095805
`
`Correspondence Email Address:   ipdocket@grsm.com
`
`
`
`
`
`
`REQUEST FOR RECONSIDERATION AFTER FINAL ACTION DENIED
`
`Issue date:   December 22, 2023
`
`Applicant’s request for reconsideration is denied.   See 37 C.F.R. §2.63(b)(3).  The trademark
`examining attorney has carefully reviewed applicant’s request and determined the request did not:  (1)
`raise a new issue, (2) resolve all the outstanding issue(s), (3) provide any new or compelling evidence
`with regard to the outstanding issue(s), or (4) present analysis and arguments that were persuasive or
`shed new light on the outstanding issue(s).  TMEP §§715.03(a)(ii)(B), 715.04(a).  
`
`Accordingly, the following requirement(s) and/or refusal(s) made final in the Office action dated May
`30, 2023 are maintained and continued: 
`
`
`•
`•
`
`Mere Descriptiveness Refusal
`Request for Information
`
`
`See TMEP §§715.03(a)(ii)(B), 715.04(a).  
`
`In addition, the following requirement(s) and/or refusal(s) made final in that Office action are satisfied:
`
`
`
`•
`
`Identification of Services
`
`
`See TMEP §§715.03(a)(ii)(B), 715.04(a).
`
`
`SECTION 2(e)(1) REFUSAL - MERELY DESCRIPTIVE
`
`The refusal under Trademark Act Section 2(e)(1) is maintained and continued for the reasons set forth
`below. See 15 U.S.C. §1052(e)(1); 37 C.F.R. §2.63(b).
`
`Applicant has applied to register the mark MEDPAY, for use with  Administering healthcare
`management programs, namely, cost management and consultation for the healthcare and prescription
`drug benefit plans of others; administering healthcare management programs, namely, cost
`management for the healthcare benefit plans of others via healthcare and prescription drug benefit
`plan utilization review programs and pharmaceutical cost management services; administering
`healthcare management programs, namely, cost management for the healthcare benefit plans of others
`via drug utilization review programs; administering healthcare management programs, namely, cost
`management for the healthcare benefit plans of others featuring prescription drug mail order and
`specialty drug programs and
`integrated healthcare wellness programs; Healthcare benefit
`
` 
`

`

`management services in the nature of healthcare cost review, namely, monitoring and analyzing
`information regarding consumer prescription drug use and healthcare habits to identify potential cost
`savings and improvements to business administration of integrated healthcare wellness programs, in
`Class 35;Healthcare benefit management services, namely, insurance administration and insurance
`claims processing of healthcare and prescription drug benefit plans; Healthcare benefit management
`services, namely, administering a network of pharmacy providers for the purpose of insurance
`administration of healthcare benefits; Healthcare benefit management services, namely, insurance
`advisory services and insurance consultancy regarding healthcare and prescription drug benefit plans;
`Healthcare benefit management services, namely, provision of insurance information and analysis in
`the fields of healthcare and prescription drug benefits; Healthcare benefit management services,
`namely, insurance claims processing for healthcare benefits in the nature of verification and
`processing of consumer healthcare benefits and prior authorization requests, in Class 36;Providing
`temporary use of on-line non-downloadable software for database management and for the collection,
`editing, organizing, modifying, book marking, transmission, storage and sharing of data and
`information for healthcare management services, in Class 35; and Healthcare management services in
`the nature of providing information and consultation in the field of health, in Class 44.
`
` A
`
` mark is merely descriptive if it describes an ingredient, quality, characteristic, function, feature,
`purpose, or use of an applicant’s goods and/or services. TMEP §1209.01(b);  see, e.g.,  In re TriVita,
`Inc., 783 F.3d 872, 874, 114 USPQ2d 1574, 1575 (Fed. Cir. 2015) (quoting  In re Oppedahl &
`Larson LLP, 373 F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004));  In re
`Steelbuilding.com, 415 F.3d 1293, 1297, 75 USPQ2d 1420, 1421 (Fed. Cir. 2005) (citing  Estate of
`P.D. Beckwith, Inc. v. Comm’r of Patents, 252 U.S. 538, 543 (1920)).
`
`Applicant argues that the mark is not descriptive of the services because it does not answer all possible
`questions about the payments, including who is paid, why they are paid, and in what manner they are
`paid.  Relatedly, applicant argues that the mark cannot be descriptive because applicant does not offer
`medical clinic services.  However, applicant's services are clearly used in making payment decisions
`and in the payment for medical costs.   The attached articles discuss the role that pharmacy benefit
`managers such as applicant play in determining how much consumers pay for their medicines, as well
`as their roll in paying for medicines.  These articles include the following:
`
`
`•
`
`•
`
`•
`
`•
`
`The Wikipedia entry noting that a pharmacy benefit manager (PBM) is a third-party
`administrator of prescription drug programs whose responsibilities include negotiating
`discounts and rebates with drug manufacturers, and processing and paying prescription drug
`claims.
`AMedical News Today article notes that PBMs represent health insurance providers when
`making agreements with drug manufacturers, explaining that “Drug manufacturers pay PBMs
`rebates. PBMs will also make payments to pharmacies, on behalf of the health insurance
`providers, for the drugs the insurer dispenses.”
`A WBUR radio presentation that refers to PBMs as “The middlemen who decide what you pay
`for medications.”
`The Sana Benefits page explains that the PBM determines the amount that the health plan will
`pay for a claim, and the pharmacy is then paid by the PBM.
`
`
`The fact that the mark does not provide all of the salient information about the payment for medical
`services does not mean that it does not still  describe an ingredient, quality, characteristic, function,
`feature, purpose, or use of an applicant’s services.   Furthermore,  “A mark may be merely descriptive
`even if it does not describe the ‘full scope and extent’ of the applicant’s goods or services.” In re
`
`

`

`Oppedahl & Larson LLP, 373 F.3d 1171, 1173, 71 USPQ2d 1370, 1371 (Fed. Cir. 2004) (citing In re
`Dial-A-Mattress Operating Corp., 240 F.3d 1341, 1346, 57 USPQ2d 1807, 1812 (Fed. Cir. 2001));
`TMEP §1209.01(b). It is enough if a mark describes only one significant function, attribute, or
`property. In re The Chamber of Commerce of the U.S., 675 F.3d 1297, 1300, 102 USPQ2d 1217, 1219
`(Fed. Cir. 2012); TMEP §1209.01(b); see In re Oppedahl & Larson LLP, 373 F.3d at 1173, 71
`USPQ2d at 1371.
`
`In addition to the evidence showing that  pharmacy benefit managers are involved in paying for medical
`costs, additional evidence shows that MEDPAY is a term of art in the insurance industry.  Applicant's
`identification of services is broad enough to encompass such services, and therefore, the mark is also
`descriptive.  
`
`Applicant argues that any doubt regarding the mark’s descriptiveness should be resolved on applicant’s
`behalf.  E.g., In re Merrill Lynch, Pierce, Fenner & Smith, Inc., 828 F.2d 1567, 1571, 4 USPQ2d 1141,
`1144 (Fed. Cir. 1987); In re Zuma Array Ltd., 2022 USPQ2d 736, at *8 (TTAB 2022) (quoting In re
`Fallon, 2020 USPQ2d 11249, at *8 (TTAB 2020)).  However, in the present case, the evidence of
`record leaves no doubt that the mark is merely descriptive.
`
`For the foregoing reasons, applicant’s arguments have been considered and found unpersuasive. 
`Therefore, the refusal to register the mark under Trademark Act Section 2(e)(1) is made FINAL. 
`
`REQUEST FOR INFORMATION
`
`Applicant has once again provided a very broad statement in response to the requirement for additional
`information, which does not address the specific questions posed in the Office action, nor has applicant
`presented any of the additional suggested materials to further explain the nature of applicant's services. 
`Specifically
`, applicant has not clarified whether the software is used in the payment of medical bills, or otherwise
`used in payment processing, or in the medical field.  Therefore, this requirement is maintained and
`continued.  
`
`
`To permit proper examination of the application, applicant must submit additional information about
`applicant’s services.  See  37 C.F.R. §2.61(b); TMEP §814. The required information should include fact
`sheets, brochures, and/or advertisements. If these materials are unavailable, applicant should submit
`similar documentation for services of the same type, explaining how its own services will differ. If the
`services feature new technology and no information regarding competing services is available,
`applicant must provide a detailed factual description of the services.
`
`
`Factual information about the services must clearly indicate what the services are and how they are
`rendered, their salient features, and their prospective customers and channels of trade. Conclusory
`statements regarding the services will not satisfy this requirement for information.
`
`
`If applicant submits webpage evidence to satisfy this requirement, applicant must provide (1) an image
`of the webpage, (2) the date it was accessed or printed, and (3) the complete URL address.  In re ADCO
`Indus.-Techs., L.P., 2020 USPQ2d 53786, at *2 (TTAB 2020) (citing  In re I-Coat Co., 126 USPQ2d
`1730, 1733 (TTAB 2018)); TMEP §710.01(b). Providing only a website address or hyperlink to the
`webpage is not sufficient to make the materials of record.  In re ADCO Indus.-Techs., L.P., 2020
`
`

`

`USPQ2d 53786, at *2 (citing  In re Olin Corp., 124 USPQ2d 1327, 1331 n.15 (TTAB 2017);  In re HSB
`Solomon Assocs., LLC, 102 USPQ2d 1269, 1274 (TTAB 2012); TBMP §1208.03); TMEP §814.
`
`
`Applicant has a duty to respond directly and completely to this requirement for information.  See In re
`Ocean Tech., Inc., 2019 USPQ2d 450686, at *2 (TTAB 2019) (citing  In re AOP LLC, 107 USPQ2d
`1644, 1651 (TTAB 2013)); TMEP §814. Failure to comply with a requirement for information is an
`independent ground for refusing registration.  In re SICPA Holding SA, 2021 USPQ2d 613, at *6
`(TTAB 2021) (citing  In re  Cheezwhse.com, Inc., 85 USPQ2d 1917, 1919 (TTAB 2008);  In re DTI
`P’ship LLP, 67 USPQ2d 1699, 1701-02 (TTAB 2003); TMEP §814).
`
`
`If applicant has already filed an appeal with the Trademark Trial and Appeal Board, the Board will
`be notified to resume the appeal.   See TMEP §715.04(a).  
`
`If applicant has not filed an appeal and time remains in the response period for the final Office
`action, applicant has the remainder of that time to (1) file another request for reconsideration that
`complies with and/or overcomes any outstanding final requirement(s) and/or refusal(s), and/or (2) file a
`notice of appeal to the Board.  TMEP §715.03(a)(ii)(B).
`
`
`/Laura Golden/
`Laura Golden
`Examining Attorney
`LO103--LAW OFFICE 103
`(571) 272-3928
`Laura.Golden@USPTO.GOV
`
`
`
`

`

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`Contents
`(Top)
`© Business model
`Theformulary
`Neteffect on consumers
`History
`Market and competition
`Express Scripis
`CVS Health
`UnitedHealth Group
`~ Advocacy and lobbying
`Biosimilars
`Controversies and litigation
`See also
`References
`Extemal links
`
`
`
`Pharmacybenefit management
`Bp 3 languages ~
`
`Article Talk
`Read
`Edit Viewhistory Tools ~
`From Wikipedia, the free encyclopedia
`
`This article may rely excessively on sources too closely associated with the subject, potentially
`appropriate citations to reliable, independent, third-party sources. (Apn! 2019) (Learhowand when to remove
`ee preventingthe articlefrombeing verifiableand neutral. Please help improveitby replacing them with more
`this templatemessage)
`In the United States, a pharmacy benefit manager (PBM)is a third-party administrator of prescription drug programsfor commercial health plans, self-
`insured employerplans, Medicare Part D plans, the Federal Employees Health Benefits Program, and state government employee plans|"!According
`to the American PharmacistsAssociation, "PBMs are primarily responsiblefor developing and maintaining the formulary, contracting with pharmacies,
`negotiating discounts and rebateswith drug manufacturers, and processing and payingprescriptiondrug claims."(*1'*! PBMs aperateinsideofintegrated
`healthcare systems (e.g., Kaiser Permanente or Veterans Health Administration), as part ofretail pharmacies (e.g., CVS Pharmacy), and as part of
`insurance companies(@.g., UnitedHealth Group).!"I41
`In 2017, the largest PBMs had higher revenuethan thelargest pharmaceutical
`As of2016, PBMs managedpharmacy benefitsfor 266 milion Americans,
`manufacturers,
`indicatingtheir increasingly largerole in healthcarein the United States.Hawever,
`in 2016 there were fewer than 30 major PBM
`companies in this category in the US,""! and three major PBMs (Express Scripts, CVS Caremark, and OptumRx of UnitedHealth Group) comprise 78% of
`the market and cover 180 million enrollees !"I5)
`Business model [eit]
`
`In the United States, health insurance providers often hire an autside companyto handle price negotiations, insurance claims, and distribution of
`prescription drugs. Providers which use such pharmacy benefit managers include commercial health plans, self-insured employerplans, Medicare Part D
`plans, the Federal Employees Health Benefits Program, and state government employee plans.'"] PBMs are designedto aggregatethecollective buying
`power of enrollees through their client health plans, enabling plan sponsors and individuals to obtain lowerprices fortheir prescription drugs. PBMs
`negotiate price discountsfrom retail pharmacies, rebates from pharmaceutical manufacturers, and mail-service pharmacies which home-deliver
`prescriptions without consulting face-to-face with a pharmacist !7!
`Pharmacy benefit management companies can make revenue in several ways. First, they collect administrative and service fees from the original
`insurance plan. They canalso collect rebates from the manufacturer. Traditional PBMsdo not disclose the negotiated netpriceof the prescription drugs,
`
`
`allowing them to resell drugs at a public list price (also known asasticker price) which is higherthan the net price they negotiate with the manufacturer!)
`This practice is known as “spread pricing’.!! Savings are generally considered trade secrets.'""! Pharmacies and insurance companies are often
`prohibited by the PBM from discussing costs and reimbursements. This leadsto lack oftransparency. Therefore,states are often unaware of how much
`moneythey lose due to spread pricing, and theextent to which drug rebates are passed on to enrollees of Medicare plans.
`In response, states like Ohio,
`West Virginia, and Louisiana have taken action to regulate PBMswithin their Medicaid pragrams. Forinstance, they have created new contracts that
`require all discounts and rebates to be reported to the states.
`In return, Medicaid pays PBMsa flat administrative fee {"")
`The formulary [edit)
`Mainarticle: Formulary (pharmacy)
`PBMsadvise their clients on ways to “structure drug benefits” and offer complex selections at a variety of price rates from which clients choose. This
`happens by constructing a “formulary”orlist of specific drugs that will be coveredbythe healthcare plan. The formulary is usually divided into several
`“tiers” of preference, with lowtiers being assigned a higher copay to incentivize consumers to buy drugs on a preferred tier. Drugs which do not appear
`onthe formulary at all mean consumers must pay the fulllist price. To get drugslisted on the formulary, manufacturers are usually requiredto paythe
`PBM a manufacturer's rebate, which lowers the netprice ofthe drug, while keepingthelist price the same.'7] Pharmaceutical manufacturers saythat in
`order to cover the cost ofthese rebates,they are forced to raise the price of drugs. For example, the president of Eli Lilly and Company claims
`the cost of
`discounts and rebates accounts for 75% ofthelist price of insulin. PBMs such as Express Scripts claim rebates are a responsetorising list prices, and
`are not the cause ofthem!'*1
`The complex pricing structure ofthe formulary can have unexpected consequences. When filing an insuranceclaim, patients usually are charged an
`insurance copayment which is based onthe public list price, and not the confidential netprice. Around a quarter ofthe time, the cost ofthe insurance
`copaymenton thelistprice is more thanthe entire price of the drug bought directly in cash. The PBM can then pocket the difference, in a practice known
`
`
`
`WIKIPEDIA.
`‘heFree Eneyelopedia
`
`
`
`hide
`
`Extemallinks
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`

`

` “@SU1, DULITT eH CONUACES WILE HTC, FDIS WOUIU 1OTDIU Bi
`crsts OFT KENTA
`as 4 CWDACK 9° Consumers cart couse tw guy une uiug
`
`consumers about the possibility of buying their medication for a cheaperpricewithout an insuranceclaim, unless consumersdirectly ask about it !151
`Since 2017,six states havepassedlegislation making such "gag clauses"illegal.'"®! This has recently been followed by a federal bans on gag orders!)
`for private insurance effective Oct 2018,''*] and for Medicare effective Jan 2020.!°1
`Net effect on consumers [edit]
`Overall, the PBM industry claims to provide significant costsavings for end users. For example, in 2015, CVS Caremark said that it reduced its plan
`members’ prescription drug spending to 5%, down from 11.8% in 2014.°l However, such conclusions can be controversial. A2013 investigation of PBM
`marketing from Fortune Magazine showed: Drugpricing is difficultto untangle and customers have no way of knowing how muchthey are saving"!
`
`History [edit]
`In 1968, the first PBM was founded when Pharmaceutical Card System Inc. (PCS,laterAdvancePCS) invented the plastic benefit card.By the "1970s,
`[they] serve[d] as fiscal intermediaries by adjudicating prescription drug claims by paper and then, in the 1980s,electronically” [221°
`By the late 1980s, PBMs had become a majorforce "as health care and prescription costs were escalating’|"! Diversified Pharmaceutical Serviceswas
`one oftheearliest examples of a PBM which came from within a national health maintenance organization United HealthCare (now United
`HealthGroup}.* 29415]After SmithKline Beecham acquired DPS in 1994,Diversified played a pivotalrole in its Healthcare Service division and by 1999
`UnitedHealth Groupaccounted for44% of Diversified Pharmaceutical Services's total membership !*! Express Scripts acquired Diversified inApril 1999
`and consolidated itself as a leading PBM for managed care organizations./25)
`In August 2002,the Wall StreetJoumal wrote that while PMshad "steered doctors to cheaper drugs, especially low-cost generic copies ofbranded
`drugsfrom big pharmaceutical companies”from 1992through 2002,they had "quietly moved” into marketing expensive brand name drugs.'41
`
`In 2007, when CVS acquired Caremark,”the function of PBMs changed "from simply processingprescription transactions to managing the pharmacy
`benefit for health plans”!°2'* negotiating “drug discounts with pharmaceutical manufacturers”"7!and providing "drugutilization reviews and disease
`management”.7*!*4 PBMsalsocreated a formulary to encourage or even require “health plan participantsto use preferred formulary products to treat
`their conditions” 71°In 2012, Express Scripts and CVS Caremark transitioned from using tiered formularies,
`to those that excluded drugs from their
`formulary “127
`
`Market and competition [eat
`in the United States,
`‘As of2004, the Federal Trade Commission found PBMsoperated in a marketplace with "vigorous competition’ {28And as of2013,
`a majority ofthe large managedprescription drug benefit expenditures were conducted by about 60 PBMs.'**! Few PBMs are independently owned and
`operated. PBM's operate inside ofintegrated healthcare systems (e.g,, Kaiser Permanente or Veterans Health Administration), as part ofretail
`pharmacies, major chain drug stores (e.g., CVS Pharmacy or Rite-Aid), and as subsidiaries of managed care plans or insurance companies (2.9.,
`UnitedHealth Group)!"!! However, in 2016 fewerthan 30 major PBM companies werein this category in the US.'"! and only three major PBMs (Express
`Scripts, CVS Health, and OptumRx of UnitedHealth Group) comprised 78% ofthe market, covering 180 million enrollees "I!
`In 2015, the three largest public PBMs were Express Scripts, CVS Health (formerly CVS Caremark) and United Health/OptumRax/Gatamaran, 2012122] As
`of2018, the three largest PEMs controlled mare than 80% of the market)
`Express Scripts [edit]
`In 2012 Express Seripts acquired rival Medco Health Solutions for $29.1 billion and became “a powerhouse in managing prescription drug benefits’|?)
`As of2015, Express Scripts Holding Companywasthe largest pharmacy benefit management organization in the United States," with 2013 revenues
`of$104.62 billion °°)
`In October 2045 Express Scripts began reviewing pharmacy programs run byAbbVie Inc and Teva Pharmaceuticals Industries Ltd regarding the
`potential use oftactics that "can allow drugmakers to work around reimbursementrestrictions" from Express Scripts and other insurers. These reviews
`resulted from investigations into “questionable practices” at Valeant Pharmaceuticals International Inc's partner pharmacy, Philidor Rx Services."
`CVS Health |edit)
`In 1994, CVS launched PharmaCare, a pharmacy benefit management companyproviding a wide range of services to employers, managed care
`organizations, insurance companies,unions and governmentagencies.!°”) By 2002 CVS'specialty pharmacy ProCare, the “largestintegrated retail/mail
`provider of specialty pharmacy services”in the United States,°*!'*° was consolidated with their pharmacy benefit management company,
`PharmaCare.!81!9)'4 Caremark Rx was founded as a unit ofBaxter International and in 1992 spunoff from Baxter as a publicly traded company.
`In
`March 2007, CVS Corporation acquired Caremarkto create CVS Caremark, later re-branded as CVS Health.!42)
`In 2011 Caremark Rx wasthe nation’s second-largest PBM. Caremark Rx was subject to a class action lawsuitin Tennessee, which allegedthat
`Caremark keptdiscounts from drug manufacturers instead of sharing them with memberbenefit plans, secretly negotiated rebatesfor drugs and keptthe
`money, and provided plan memberswith more expensive drugs when less expensive altematives were available. CVS Caremark paid $20 million to
`threestates overfraudallegations 4"!
`
` wer
`Market and competition
`Express Scripts
`CVSHealth
`UnitedHealth Group
`Advocacy and lobbying
`Biosimilars
`Controversies and litigation
`See also
`References
`Extemal links
`
`

`

`UnitedHealth Group [edit)
`OptumRx, oneofthe Optum businesses of UnitedHealth Group Inc, has beena leading PBM.{*7!In March 2015 UnitedHealth Group acquired
`Catamaran Corporation for about $12.8 billion to extend this PBM business.{*2*4)
`
`Advocacy and lobbying [eat]
`Many Pharmacy benefit managersare represented by the trade association the Pharmaceutical Care ManagementAssociation.
`Biosimilars|edit)
`ees
`Mainarticle: Biosimilars
`Y Market and competition
`PBMshavebeenstrong proponents In the creation of a U.S, Food and Drug Administration pathway to approve biosimilar versions of expensive
`ExpressScripts
`specialty drugs which treat conditionslike Alzheimer’s, rheumatoid arthritis and multiple sclerosis.'**! PBM's support so-called biosimilarlegislation which
`CVS Health
`does not grant brand name drug manufacturers monopoly pricing power!®) in 2015 the Federal Trade Commission foundthat patents for biologic
`products alreadyprovide enough incentivesfor innovation and that additionalperiads ofexclusivity would "not spur the creation ofa new biologic drug or
`UnitedHealth Group
`indication" and “imperils’ the benefits ofthe approval process.(*71
`© Advocacy and lobbying
`Biosimilars
`Controversies andlitigation |edit)|In 1998, PEMs were underinvestigation by Assistant U.S. Attorney James Sheehan ofthe federal Justice Department, and their effectiveness in reducing
`Controversies and litigation
`See also
`prescription costs and saving clients money was questioned.)
`References
`In 2004, tigation added tothe uncertainty about PBM practices 1 in 2015, there were seven lawsuits against PBMs involving fraud, deception, or
`Extemallinks
`antitrust claims,(61
`
`State legislatures have been using “transparency,” “fiduciary,” and “disclosure” provisionsto improve the business practices of PBMs\**! In 2011, the
`MississippiBoard of Pharmacy formed a new division of the Pharmacy Benefit Managers, with a mandateto license and regulate PBMs !*")
`2013 Centers for Medicare & Medicaid Services study found negotiated prices at mail order pharmacy to be up to 83% higher than the negotiated
`prices at community pharmacies!)
`A2014 ERISA(Employee Retirement Income SecurityAct of 1974) hearing notedthatvertically integrated PBMs may pose conflicts ofinterest, and that
`PBMs'health plan sponsors "face considerable obstaclesin...determin{ing] compliance with PBM contracts including direct andindirect PBM
`compensation contract terms”!!!
`In 2017, the LosAngeles times wrote that PBMs cause an inflation in drug costs, especially within the area of diabetes drugs !°21
`United States Secretary of Health and Human ServicesAlex Azar stated regarding PBMs, "Everybody wins when list prices rise, except for the patient,
`It's rather a startling and perverse system that has evolved overtime. "°°!
`On January 31, 2019, Health and Human Services released a proposed rule to removeAnti-kickback Statute, safe harbor protections for PBMs and other
`plan sponsors, that previously allowed PBMs to seek rebates from drug manufacturers{4
`Ron Wyden sald inApril 2019 that they were as “clear a middleman rip-off as you are going to find’, because they make more money when they pick a
`higherpriced drug over a lower priced drug
`See also edit)
`# Online pharmacy
`© Preferred pharmacy network
`
` ait]
`References
`
`pasbed
`J! Feldman, Brian 8. (March 17, 2016). "Big pharmacies
`aredismantling the indusiry that keeps US drug costs even sort-of under
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