TALHASSEE – Business groups are raising privacy concerns after state regulators requested detailed data on Florida prescription drugs, including the patient’s name, date of birth and their doctor.
The Department of Insurance and Regulation is requesting extraordinary data from pharmacies’ benefits managers. This is a healthcare industry intermediary who has criticized Gov. Ron DeSantis and others for surge in drug prices and monopoly behaviour.
This year, businesses were asked to take over bill reimbursement data for all prescription drugs filled in Florida in 2024, perhaps hundreds of millions of transactions.
The state did not respond when asked how many businesses had followed. It said it hopes that the data will better understand the company’s practices.
The industry group pushed back, claiming that regulators did not give justification for reasons why they needed such details.
The state’s demand “violates the health privacy and security of millions of Florida,” the American Benefits Council wrote in February to Florida insurance commissioner Mike Yawersky.
The organization that asked the state to withdraw its request represents hundreds of the world’s largest companies. Many of its members use pharmacy profit managers to manage employee health plans, while some are the insurance companies and pharmacy profit managers themselves.
The pharmacy benefits manager said concerns about patient privacy were reasonable.
However, the Insurance Regulation Authority said the request was “in the best interest of protecting consumers.” Officials also denounced critics.
“These ‘feeling concerns’ are clearly from people who don’t want to be regulated or those who don’t want to monitor the industry,” the spokesperson told Bloomberg News.
The office wrote that there were no data breaches, but the healthcare industry was “the most breached sector of 2024.” (Last year, hackers stole HIV test results and other confidential information.
Another industry trade group has raised the prospect that the state is using data to identify physicians who provide illegal abortion services or transgender care to minors, but there is no evidence of that.
The Insurance Regulations told The Times/Herald it requested more information to be the first to investigate the pharmacy benefits industry, thanks to a 2023 law that provides more surveillance for the state.
Assuming the pharmacy benefits manager was a priority for Desantis. He touted the 2023 law as a complaint to the elderly in his failures for the president that year.
Data requested by regulators under the new law can be used to reveal how it works in one of the most opaque parts of America’s bloated healthcare system.
“It’s important to be thorough to establish a baseline,” spokesman Shiro Elliott said in a statement.
Pharmacy benefits managers came to prescription drug coverage in the 1960s, when employee health plans began to provide new benefits to workers.
Before that, drugs were relatively cheap. Patients can fill prescriptions at almost any pharmacy and pay from their pocket.
However, when insurance plans began to cover prescriptions, they relied on the pharmacy profit manager to process claims and monitor costs.
The purpose of benefits managers was to reduce costs by negotiating with pharmacies and drug manufacturers to get the best price for the insurance company and its patients.
Since then, the industry’s business model has changed dramatically. The pharmacy benefits manager created his own pharmacy, merged with insurance companies, attacked secret deals with drug manufacturers, and pushed up costs.
A New York Times survey last year found that pharmacy profit managers would lead patients to more expensive drugs, charge sudden markups for what would otherwise be cheaper drugs, extract billions of dollars of hidden fees. Other state and federal regulators have made similar charges in recent years due to growing industry awareness.
The three largest pharmacy benefits managers are owned by CVS Health, Cigna and UnitedHealth Group, and handle 80% of all US prescriptions.
“People keep calling them intermediaries,” said Antonio Ciaccia, president of 3 Axis Advisors, a consulting firm that researches the American drug supply chain.
“They’re the whole system at this point.”
Desantis pushed Congress in 2023, dramatically increasing industry surveillance. The law has put Florida pharmacy benefits managers to test every two years starting in January this year.
It is not uncommon for regulators to see patient claim information. The Department of Insurance and Regulation has already access to detailed patient and physician information for Medicaid recipients and employees, for example, on state health plans.
But the state’s demand for data from pharmacies’ profit managers goes far beyond that, including self-insurance plans that business groups say are protected by federal law.
“There are very clear Supreme Court officials who say the state can’t do that,” said Ryan Tenme, an attorney for the American Benefits Council.
However, the organization is not exploring legal action to stop the request.
Companies use patient privacy concerns to combat regulatory scrutiny. In the early 2000s, they alleged that creating a database of doctors prescribing opioids would violate the physician-patient relationship. The database was eventually created and helped identify doctors and pharmacies who were abused the system.
When then-General Ashley Moody asked for access to data in 2019 to sue pharmacies and pharmaceutical companies for these abuses, lawmakers initially resisted on similar reasons.
The data Moody received did not include the patient’s name or date of birth. Instead, patients were assigned a random ID number.
The CIACCIA company analyzed 350 million anonymized Florida Medicaid claims and produced a 2020 report that found that pharmacy benefits managers pay their pharmacies far more to distribute drugs than their competitors.
He said he doesn’t think it’s important for state regulators to have a patient’s name and date of birth.
“I don’t think getting a patient’s name is worth the problem,” Ciaccia said.
Michael Jackson, a retired pharmacist and former CEO of the Florida Pharmacy Association, said privacy concerns were fair.
“Consumers don’t want the government to have access to sensitive information,” Jackson said.
But as a former pharmacist who testified in support of Florida’s 2023 law, he also questioned the motivations of the pharmacy benefits manager.
“What do the PBM industry doesn’t want you to know?” Jackson said. “Why are they hidden by patient confidentiality?”
Alexandra Glorioso, a reporter from the Times/Herald Tallahassee Department, contributed to this report.
