The Medicare drug benefit is provided by private insurance companies, competing with one another and operating under contracts with the federal government. Each insurer has one or more committees that decide which drugs will be covered. The decisions are supposed to be based on scientific evidence.
However, the NY Times reported that a new report by Daniel R. Levinson, the inspector general at the Department of Health and Human Services, which admitted that the federal Medicare agency had not clearly defined “conflict of interest” and did not enforce standards meant to prevent such conflicts from influencing drug coverage decisions by the panels, known as pharmacy and therapeutics committees.
“The Centers for Medicare and Medicaid Services does not monitor conflicts of interest on pharmacy and therapeutics committees,” Mr. Levinson said. In many cases, he said, the government cannot identify potential conflicts because committee membership lists are unusable — incomplete, inaccurate and full of discrepancies. The panels are appointed by insurers or pharmaceutical benefit managers hired by insurance companies.
A separate study by university researchers found similar problems in many state Medicaid programs. The study, published this month in the journal JAMA Internal Medicine, described “inadequate management of conflicts of interest” among the panels that recommend drugs for coverage under Medicaid.
Since Medicare officials do not monitor conflicts of interest, Mr. Levinson said, they cannot be sure that prescription drug plans are complying with federal requirements that at least two committee members — one practicing physician and one pharmacist — be “independent and free of conflict.”