Following Up On Big Pharma

And Drug Production Manufacturing

Disclaimer: My infographic was a result of ChatGPT replying to a line of inquiry I made about generic drug manufacturing AND combined it with what some economic and policy wonks define as what they consider “fair pricing”.

As you read my article, it appears the current global generic medication manufacturing industry is presently experiencing profit margins above the “fair” category. Patented drug manufacturing makes evan wider margins of profit and this takes into account the massive spend on advertising AND the less massive spend on research and development. Armed with this information, I think government policy for pharma definitely needs revision and the Trump administration’s announcement to address US drug prices is a correct priority. Likewise hospital payment and health insurance reform is WAY PAST DUE.

Awhile back, I wrote a lengthy post about the Glp-agonist drug class and how MARKETS WILL BE MADE. It was titled Good God Almighty Which Way Do I Steer?

Interestingly my “armchair” analysis concluded that the market price for the sweet spot of the “perception of affordability” for this revolutionary drug class was between $150-300 a month. As the big pharma boys line up for this market, it is interesting to note that they are falling over themselves to provide cash price access for single vial delivery about 200% above my guesstimate. Could this be construed as price fixing?

Novo Nordisk’s Wegovy initial month cash offer is $199 and $499 thereafter. Lilly’s Zepbound has a convoluted offer of discounting pricing scheme if you try insurance and get denied. They cap your out of pocket discounts to between $3-6 thousand depending upon your crappy plan. They also offer a cash price of the single vial doses at $499. Hint: Just bypass your insurance offer unless “covered” (you never are) as the better individual cost is to go with the cash price offer.

From my prior Glp agonist review post, regarding what people will afford for effective weight loss medication, the following quote is referenced.

Of all the ones that hit the market and worked the best, Vivus’s Qsymia was marketed at a price people find appropriate. This is my go-to prescription for weight loss because we can get the real drug through a specialty mail-order pharmacy. The pharmacy is contracted by the manufacturer to provide a cash price right at 100 dollars a month. This folks is the cash market!

Regarding Qsymia and other patented weight loss products, I noted that going significantly above 100 dollars a month pretty much was a deal breaker for a chronic weight loss medication. I did learn in my research for this article that Vivus got patent extension through 2029. It was doing to run out in 2020- I don’t know why the FDA extended it.

As compounded, I am learning from patients that semaglutide is available from 150-350 dollars a month and they are paying this willingly. The name brand Ozempic is retailing above 1000 bucks a month. To me it seems Big Pharma is like Big Hospital -they command at least 10 times the market price for their services. This is why the myth that health insurance is necessary for health care continues.

My last post covered the history of pharmaceutical patents and was an attempt to expose the fact that United States market regulation of big pharma is why we pay the lion’s share of global prescription drug costs (and profits).

What Is The Industry Doing For Damage Control Regarding The Trump Administration’s Plan for “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.”

This week in the news, the large Swiss generic manufacturer Sandoz’s CEO, Richard Saynor, has been publicly discussing tariffs on generic drug imports and their impact on U.S. markets:

He claims that potential tariff mischief will be counter productive to US generic manufacturing incentives. He is asking for policy to “incentivize” manufacturing to cross the ocean and into the United States.

Mr. Saynor warns:

1. Tariffs will lead to supply disruptions and higher costs to individuals.

2. Saynor warns that imposing tariffs—or even threatening them—discourages generics manufacturers from investing in U.S. production capacity.

3. He points out generics operate on thin margins, producing essential medicines like antibiotics for less than the cost of everyday items.

4. He claims U.S. plants cost $2–3 billion each and without government incentives, tariffs won’t prompt investment.

Does it really cost $2-3 billion to get in the generics game?

I took a deeper dive into this question and I also explored what kind of manufacturing capacity and options presently exist in the market. The answer appears that his claims are credible IF you are looking at a full-on biologics manufacturing model with full regulatory compliance and scale for sustainable manufacturing. Recall in my most recent post I discussed how the US legal regulatory policy is promoting and protecting biologicals as the go to most profitable and protective route for pharmaceutical innovation to take.

On the other hand if you look at starting up a generic oral pill chemical drug you are looking at 10’s of millions to a billion dollars for the full on project. You can start a small lab and production facility for 100’s to a few million.

I asked ChatGPT for a summary of generic manufacturing capacity and head counts. Here is the summary:

• Global top 15: A mix of U.S., Indian, Israeli, Swiss, and Japanese generics firms.

• U.S. Top Players: Viatris, Abbott, AbbVie, Amneal, Teva USA.

• Total U.S. Generics Facilities: ~600–700 registered manufacturing sites, representing a vibrant domestic generics ecosystem.

Yes — there is manufacturing capacity and competition in the U.S., especially in generics and biotech. Further there is a massive global manufacturing capacity. So why then can’t the market deliver chronic-use, brand-name drugs affordably to U.S. and global consumers? The top 15 manufacturers together account for a major share of global generic revenue (~$400+ billion market).

Here is a little side note: If it takes 2 billion to build a new full on manufacturing facility and noting the sales dollars we are looking at new plant cost to annual revenues of 0.5%

Mr. Saynor points out that the generic drug manufacturing business is a low margin business. I asked ChatGPT how economists and businesses define profit margins from low to high profit margins:

How Profit Margins Are Classified by Industry

🔹 Net Profit Margin (after all costs, including taxes)

It appears from benchmark information it is not a true statement that generic medication production is a low margin business. It is in fact a moderate margin business. Mr. Saynor appears incorrect on that claim.

It also is obvious that we don’t have an inadequate supply chain for generic medication manufacturing. Will tariffs directed at non US production disincentivize market participation? Surely, given using other countries for manufacturing allows generic drug production to be a moderate margin business. Will tariffs on global generic manufacturing result in more US production? I think what Mr. Sandor is telling us is “no” BUT if we give him and the global generic medication industry subsidies (perhap from the tariff revenue), he could find the motivation to move more jobs our way.

What Could Big Pharma Do To Help Its Customers?

An obvious pivot for long term survival and to get in front of what might be inevitable unfavorable future federal regulation, is to consider providing their name brand product as an ongoing market option AFTER the patent expires. This doesn’t happen now and the reason is IF they moved to competitive generic price competition for their name brand, government could come after them for what is obviously price gouging/predatory pricing that is currently in place. Maybe the pharma lobbies congress for a mea culpa on the past price gouging for protection to move to this business model? Just a thought (and not a bad one I might add).

I would submit that had Merck kept the Zocor brand name and offered it as a generic competitor price 10-20% higher than the white labeled generics “settled” market price, they would have maintained a large market share AND continue to make a moderate or more than moderate profit margin- indefinitely. Over the counter Tylenol is a perfect example of what I am talking about. When you go from 10 dollars a pill to 30 cents a pill to stick with the brand name, I suspect many buyers would chose the brand name.

Big pharma should offer price caps on personal out of pocket payment for chronic medication products. It isn’t reasonable to ask any individual to pay for one medication on an annual basis which cost is higher than their grocery bill. Given the present extended duration of patent protection currently enjoyed, and noting my prior documentation that pharma gets their return on investment in 3-4 years, there appears to be plenty of fat there to consider this type of policy. If you can’t get something into the market for less than a person’s annual grocery bill, perhaps you should move onto a different project. We can’t keep paying ever rising and frankly ridiculous extorted prices, made possible by federal regulatory favoritism to pharma, especially acknowledging that 90% of present medication use is in the generic world COMBINED with the understanding that generic medication manufacturing is presently a moderate to high moderate profit industry.

Sometimes You Have To Dance With the Devil

United States Prescription Prices Vs. The World Market

Does Nationalizing Health Care Help Individuals? What Can The Future Look Like?

If America Forces Pharma To Bring Prices Comparable To The International Socialized Health Care Countries- What Will The Final Price Be?

On May 12, 2025, President Donald Trump signed an executive order titled: “Delivering Most-Favored-Nation Prescription Drug Pricing to American Patients.” This policy aims to align U.S. prescription drug prices with the lowest prices paid by other developed nations, addressing concerns that Americans are subsidizing global pharmaceutical costs.

Key Provisions of the Executive Order

• Price Alignment: Directs the Department of Health and Human Services (HHS) to negotiate drug prices to match the lowest prices paid by comparable countries.

• Scope: Applies to drugs covered under Medicare and Medicaid, with potential expansion to the private market.

• Enforcement: If pharmaceutical companies fail to comply, the administration may pursue regulatory actions, including facilitating drug importation from countries with lower prices.

• Trade Measures: Empowers the U.S. Trade Representative and Secretary of Commerce to address foreign practices that contribute to higher U.S. drug prices.HHS.gov+5The White House+5The White House+5

Clearly, forcing our way into the “International Buyers Warehouse” will improve the prices Americans pay for prescription medications. Understanding that we in the United States have provided the legislative protections that have promoted pharmaceutical monopolies, it stands apparent that we too, pay the highest prices- specifically because of that arrangement. After decades of allowing the rest of the world to arbitrage this market favoritism, President Trump is calling this out into the open and demanding a realignment.

If followed to its logical conclusion, taking this stand will drive prices of medications up on socialized healthcare systems (Canada, United Kingdom, etc) and place a relief valve on United States Price pressures. The individuals in the socialized nations will see cost harm and the US market will see cost reductions. The outcome will be more “equitable” en large but there will be plenty of squealing along the way. If this process goes to full international access (likely due to Pharma’s obstinance), things are going to look very different. I hope pharma drags its feet and we put the fire on full heat.

How Did We Come To This Market Situation?

The Hidden Engine: Patents and Profit Protection

At the core of pharmaceutical pricing lies patent protection. Drug companies receive 20-year patents to protect their discoveries, which block generic competition. These patents are often extended through a practice known as "evergreening" — filing additional patents for minor modifications to maintain exclusivity. Take the Glp1 agonist injection devices as an example.

This global patent regime is enforced by the TRIPS Agreement, a treaty established in 1995 under the World Trade Organization (WTO). It standardizes International Patent protections worldwide, including for medicines, and pressures countries — even low-income ones — to adopt the same patent rules.

This system rewards innovation but also delays access to affordable generics, especially in countries that previously produced low-cost versions of brand-name drugs.

The TRIPS Agreement — short for Trade-Related Aspects of Intellectual Property Rights — is the most comprehensive international agreement on intellectual property (IP) and has had a profound impact on the global pharmaceutical landscape.

• TRIPS is a binding international treaty that sets minimum standards for intellectual property protection (including patents, copyrights, trademarks, etc.) among World Trade Organization (WTO) member countries.

• It came into force in 1995 as part of the founding of the WTO.

Historical Context: Why TRIPS Was Created

📉 Before TRIPS:

• Many countries did not offer patent protection for pharmaceuticals or only for production methods (not drug products).

• This allowed generic manufacturing and cheaper drug access, particularly in countries like India and Brazil.

💼 Enter the U.S. and Big Pharma:

• During the 1980s, U.S. corporations — especially pharmaceutical, software, and entertainment industries — lobbied for stronger international IP protections.

• They argued weak IP laws abroad led to "piracy" and revenue loss.

• The U.S. tied IP enforcement to trade policy (via Special 301 Reports) and pushed for IP to be part of multilateral trade negotiations.

🌐 Uruguay Round (1986–1994):

• The TRIPS Agreement was negotiated as part of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).

• TRIPS became a condition for joining the WTO, pressuring countries to accept IP protections in exchange for global market access.

The history of Pharma regulation is more involved but I think the above summaries provide adequate perspective. Add the following:

Why U.S. Prices Are Higher

• The U.S. does not regulate drug prices at the federal level.

• The U.S. allows direct-to-consumer advertising and longer exclusivity periods via FDA rules and patent law interplay (e.g., biologics get 12 years exclusivity).

• Other countries often:

  • Use reference pricing or price negotiations.

  • Wait for generics or biosimilars (more delayed where patents are tight).

  • Certainly. While TRIPS standardizes minimum patent terms internationally (20 years), governments differ widely in how they grant exclusivity beyond the patent—especially for biologics and new chemical entities (NCEs). These regulatory exclusivities are critical to drug pricing and generic/biosimilar competition.

Based Upon The Protection Favoritism For Pharma In The US, The Return On Investment Proposition Uniquely Places Costs On Our Market

Key Stat

A 2020 study published in Health Affairs showed that U.S. prices account for 78% of total global pharmaceutical profits, while the rest of the world combined contributes only 22%.

As the public is likely aware, Secretary of Health and Human Services, Robert Kennedy Jr. has floated the idea of removing direct to consumer advertising for pharma. Here is some interesting information to have in mind. With the exception of Wegovy, the products in this list of top 5 Direct To Consumer spenders are for biologic products. Biological patent rules in the US vs the world is a topic for another post.

More contemporary updates on how marketing dollars are spent, indicate it has dramatically shifted away from physician directed advertising to direct to consumer advertising.

Updated Breakdown of U.S. Pharmaceutical Advertising (2023–2024)

• Total Advertising & Promotion (A&P) Spend (2023): $13.8 billion by the top 10 pharmaceutical companies. Fierce Pharma+3Informa TechTarget+3AHIP+3

• Direct-to-Consumer (DTC) Advertising:

  • Total DTC Spend (2023): Approximately $13.8 billion.

  • Television Advertising: $5.15 billion in national TV ads.

  • Digital Advertising: $7.76 billion on display ads. AHIP+2CSRxP+2Informa TechTarget+2Marketing & PharmaEMARKETER

• Physician-Directed Marketing:

  • While specific figures for 2023 are limited, historical data suggests that physician-directed marketing (including free samples, sales representatives, and medical journal advertising) remains substantial but may be outpaced by DTC spending.

• Total pharma marketing spent in the US exceeds research and development costs. Big pharma has always whined about the cost of R and D as the reason prices have to be so high in the United States. Look at what they do, not what they say.

  

  Nothing Burgers For Sale

What Would An International Prescription Drug Market Look Like?

Allowing Americans to shop internationally for prescription medications would significantly disrupt the current U.S. pharmaceutical market by introducing competition, undermining price protectionism, and shifting power away from pharmacy benefit managers (PBMs) and domestic monopolies. Here's a structured look at what such a market would look like and what currently exists:

Is there any excuse in this modern day society for this not to happen? The only reason is isn’t happening is special interests lobbies have pirated the market using government laws stacking the deck in big pharma and big insurance’s favor. An opaque market allows for the “legal theft” from market efficiency. Note PBM’s are literally sidelined if we allow international access.

AND FINALLY:

Does an International Pharma Market Already Exist?

Yes — in both wholesale and retail forms:

🔹 Wholesale Markets

• Countries with reference pricing often re-export medications to lower-cost nations (the EU allows this within its borders).

• Major wholesalers exist in:

  • Germany (parallel trade to the UK, France)

  • India (generic manufacturing hub)

  • Turkey, Israel (regional supply chains)

🔹 Retail Access

• Consumers already access drugs internationally via:

  • Online pharmacies (Canada, UK, India)

  • Medical tourism (Mexico, Thailand, India)

• However, U.S. law currently prohibits personal importation except under FDA discretion (usually for 90-day supplies of non-controlled substances for personal use).

I Say Let’s Turn Up The Heat!!!

License To Steal

Medicare-How The Chronic Care Reimbursement Scheme Is Being Gamed

This post is a follow-up to my most recent prior blog. There I delved into an inquiry driven by a patient reporting they were being “assigned” a primary physician by their new Aetna Medicare PPO insurance underwriter. This past week, another of my established patients brought me a “patient care” letter. This letter was sent from his Florida Blue Medicare insurer. He informed me he has had other communication attempts from his plan including unsolicited nurse health history reviews. Many patient have reported to me in the past 2 years of unsolicited nursing navigator calls.

The Guise Of Being Your Health Care Navigator; An Example Of Mission Creep And An Example Of A Middleman Entry Into Chronic Care

My patient provided me a letter sent to him, along with an enclosed Brush Kit for Fecal Immunochemical Testing. This official looking letter was signed by Dr. Thomas Graf, M.D., FAAFP (Fellow of the American Academy of Family Physicians). He is the Vice President & Chief Medical Office of Florida Blue Medicare.

This letter informed my patient Florida Blue Medicare was teaming up with Quest Diagnostics lab to make it easy to check for colon cancer from “the comfort of your own home”. “At no additional cost to you”. The offer also includes an incentive to “earn $15 in HealthBlue Rewards” upon proof of completing this test. If you have questions you can all their Member Services 1-800 number.

Enclosed with the letter is an official lab requisition (order) form. It is signed by physician, Dr. Lianne Marks NPI # 1114918349. This doctor practices in Colorado based upon my internet search. I have not had the opportunity to confirm she is aware of her credentials being attached to this order. At the bottom of the form is a signature for my patient’s “participation” which if signed, attests that upon receiving the test service, the patient is in agreement with Terms of Service.

This letter folks, is an example of how the Insurance Companies use chronic care incentives to allow them to begin trying to be your healthcare provider. In my book, that is another phrase for practicing medicine.

Terms Of Services-From The Letter

“This is a Quest Diagnostics Employer Population Health program”. This patient is retired and thus not employed. The second paragraph clarifies that the signature indicates the patient is participating freely and voluntarily, assuming any risks associated with the screening process. There is no actual explanation of what those risks may be. Bullet points for the Terms of Services further state:

• Authorization of use of genetic information if obtained.

• Authorization of your test results and any history provided through Quest’s Health Questionnaire may be shared with other third parties authorized by the program. No specifics.

• Signature authorizes Quest Diagnostics EPH to communicate regarding your participation in the program. Communications can include SMS text messages, etc.

• You are agreeing to be responsible for the accuracy of your personal information provided to the company.

• Participation in the program DOES NOT CONSTITUTE THE PRACTICE OF MEDICINE.

• Signature agrees to “hereby release and discharge, to the extent of the law all parties of any liability for any outcome from participating in this program”.

So What Can Go Wrong With Testing My Stool For Occult Blood Doctor?

Based upon this patient’s solicitation, the Mighty Blues has assumed no physician is caring for this patient. Despite their ability to procure records from the patient’s actual providing physician (me), they have not sought such information. Why might that be? Short Answer- they don’t really care. This is a program to get their Camel’s Nose Under The Tent.

Never mind that I routinely monitor my patients for Appropriate Health Screening. This particular patient doesn’t need the unsolicited offered service. Any patient who signs off on such a letter will be providing the insurance company and Quest diagnostics access to their personal health information. The test, if positive, would lead to a recommendation to be referred to a Gastroenterologist for colonoscopy screening. It is rare but there are potentially life-threatening complications from such procedures. This possibility is nowhere mentioned in the “terms of agreement”, yet the patient by participating and signing the fine print, has indemnified all parties for any such outcome. The subtle coercion of “HealthBlue Reward Dollars” is part of the introduction letter.

So Let’s Go Further Down The Rabbit Hole Of Harnessing Medicare “Quality Metrics” Incentives And Proof Of Care Coordination/Management

Why are Medicare Advantage Plans So Popular To The Insurance Industry? The answer is there are loopholes that are allowing institutions including the Insurance Companies themselves, to get paid to get that nose under the tent. United Health is implicated in playing games in the Skilled Nursing Homes to game profits and access health care information from patients.

I have informed readers in the past about United Health (and the others in the BUCA cartel) finally being scrutinized for upcoding practices. The upcoding occurs through various methods. A primary method is to have Insurance-hired nurses solicit patients for their self reported health histories. From that information the insurance company adds past or irrelevant diagnoses to their profile. Under payment rules, they then get blessed with a larger “multiplier” for their Medicare insured population. The letter I started this blog with is another example of soliciting individuals. They are asked to link to a health questionnaire site to provide health information. This is for trolling for dollars.

Who Else Is Getting In On Chronic Care Payola?

From the above informatic, we see pretty much everyone. Recall from my prior post, the intent of chronic care codes was to provide the patients’ primary care physician reimbursement for supervising and taking responsibility for not just sick care but also finally recognizing it would be helpful for patients to be examined periodically to help in disease screening and wellness maintenance. From the above, there are at least 6 other pathways separate from the primary doctor by which Uncle Sam pays out. Hospitals in particular are positioned to game this through monthly intuitional payment schemes. Already expensive (and individual self paid) Assisted Living Facilities and Senior Community neighborhoods are also being leveraged into these schemes. From my experience the patrons are not aware of what is happening. They are being advised to “check in” with the onsite clinic “just in case” they need urgent attention. Seems benign enough. But the plot thickens.

Let me paint us a picture: What is happening here in Lee County Florida is going on all over the country. Lee Health has its own insurance product, presently mostly linked to Medicaid but also via their Accountable Care Organization product, they are tapping into Medicare payment as well. One thing hospitals are expert at, it is trolling for government dollars. Hospitals whine about how Uncle Sam underpays for their “community dedication” yet they sure are adding more and more government business. The instrument for Lee Health is their Best Care Collaborative and Lee HealthCare Partners companies:

• Best Care Collaborative (BCC): BCC is a wholly-owned subsidiary of Lee Health and functions as an ACO (Accountable Care Organization). It participates in the Medicare Shared Savings Program (MSSP), aiming to improve care coordination and reduce healthcare costs for Medicare beneficiaries. Lee Health

• Lee Healthcare Partners: While Lee Health does not function as a traditional insurance company, it offers insurance-related services through Lee Healthcare Partners. This entity collaborates with various insurance plans to provide coordinated care solutions. leehealthcarepartners.com

And it goes much deeper:

• Lee Health has established collaborations with several senior living communities in Lee County, Florida, to enhance care coordination and provide integrated healthcare services for residents.

• Lee Health has partnered with Cypress Living, the parent organization of Cypress Cove, to provide strategic support for Lee Health’s Home Health agency. This collaboration focuses on workforce development, revenue cycle management, operational efficiency, business development, and clinical programming. Cypress Living+2Lee Health+2Cypress Living+2Cypress Living+1Lee Heal

• While specific details are limited, Shell Point Retirement Community is known to have a relationship with Lee Health, facilitating access to healthcare services for its residents.

• Gulf Harbour Yacht & Country Club opened its 24,000-square-foot HarbourView Center for Sports & Wellness in August 2018. At that time, they were in negotiations with Lee Health to provide onsite physical therapy services. This deal is done. I doubt patients from that neighborhood are aware of the higher hospital charges submitted for their convenient location therapy.

Summary Assessment: What started as a program to help primary care physicians stay in business caring for Medicare patients has been usurped by institutional infrastructure. Under this guise, the hospital systems have found Skilled Nursing Facilities and Senior Living communities to leverage their “hospital locations”, chronic care payment scheme and employed army of providers right into seniors homes. From cradle to grave indeed.

Further, the BUCA health insurance cartel has wedged themselves into the quality care incentive matrix and without any consent, are assigning out of state doctors and nurses working from home to force themselves into Medicare recipients’ living rooms to assure higher payment from “other peoples” money, AKA Medicare and Medicaid.

Let's Focus On The Health Insurance Industry

And We Must Ask Ourselves, Do We Want To Do Business With These Folks?

Snidely At The Railroad Tracks

Last week a patient transitioning to Medicare informed me that their Aetna Medicare Advantage PPO plan was assigning a Primary Care Physician as part of the contract. Also last week, at a physician Medical Society strategy meeting, a doctor informed some that there exists significant payment incentives in the new Medicare plans. This led me to put two plus two together. Conclusion: there is a scheme afoot.

And What A Scheme It Is

Years ago as unhappy patients left the local corporate models, I learned that a main reason for this was they couldn’t get an office visit. They couldn’t even call to request an appointment or ask a question. IF they wanted any service, they had to first sign into the practice Electronic Health Record’’ portal. I speculated that the company policy was likely so in order to start a record of “chronic care” management. From my research today this is exactly the case.

Let’s Review The Birth And Transformation Of The Chronic Care Management Code for Medicare Beneficiaries.

In 2015, the Chronic Care Management (CCM) code—CPT 99490 was introduced by CMS to Medicare providers. CMS will tell you they did this to improve patient care, encourage coordination of services and promote “team management”.

The real truth is CMS was threatened with losing all the primary care physicians’ participation. This was due to inadequate Relative Value Unit reimbursement and ever rising care costs from unrelenting patient services demand. What was happening was primary care doctors were recognizing the added bureaucracy of the coded payment RVU scheme was anchored in the past and unable to accommodate the improved technology provided by Electronic Health Records and modern communications.

Like our practice, doctors realized they could provide continuous patient care contact in and out of the office. In order to invest in providing this model, the savvy entrepreneurs had to reprice their care model and we weren’t going to wait around for the 16 member CMS committee to pay for what both doctors and patients wanted. The result was a monthly practice fee with a large list of services provided within the membership. CMS’s revised payment schemes was an attempt to stop this trend.

Physician lobbies articulated the lack of reimbursement problem to our government and insurance payers. They convinced CMS that the primary care doctors should be incentivized to provide annual physical exams and functional appraisals of our Medicare aged patients. This led to the first “give me” new code of the annual physical exams. This subsidy was intended specifically for primary care physicians.

Prior to the new code, Medicare didn’t cover annual exams. Doctors and patients had to “make up” a reason to come in for such a service. After the code, the patients were herded into the office twice annually to satisfy the government care requirements. First, a nurse or office staff person scheduled the patient to come in for a host of inquiries. Basically, occupational and physical therapy assessments and mood and memory screening was done. Then the patient was scheduled with the doctor to review this data and arrange a care plan based upon the results.

This new “Annual Wellness” program opened the Pandora’s box and led to the added chronic care management scheme. Having given in on annual health exams, now the primary care doctor lobby was able to get a sympathetic ear to help cover all the staff time and overhead consumed in the primary care office. Again, IF the physician was willing to document 20 minutes of care on any 30 day billing cycle, Uncle Sam would stroke a check for that service. Following that, the system will pay additional fees for going past an hour of chronic care management. Today while researching the history and facts around the new “assigned” PPO doctor letter, I have now confirmed that hospitals also get to tag on facility fees INDEPENDENT of whether a physician oversight code applies. It starts at 29 bucks a month.

So Here Is A Table Showing How Medicare Chronic Care Codes Can Be Applied.

The G codes are the facility payments. It turns out if properly “maximized” this scheme can bring in an extra $5700 dollars in revenue to the providers. It can’t come as a surprise that once again Hospital systems win big in this scheme. Also numerous “billing and data documentation” middleman businesses have sprung up around what was supposed to be physician care payment. My further inquiries also confirm that the Insurance Companies themselves are trolling for these dollars- hence the “assigned physician clause”.

In The News Is Lots Of Health Insurance and Medicare Fraud

If you are paying attention at all, it is clear that Obamacare hasn’t improved our individual nor national health care costs on iota. It is also clear the foxes are in the henhouse. Unfortunately no matter how much we cluck, nothing positive changes. Let me give you some examples on the fraud front.

1. US Department Of Justice accuses Medicare Insurers and brokers of fraud.

2. South Texas Couple Pleads Guilty in $14 Million Medicare Fraud Scheme

3. Dafud Iza, an executive vice president of a Florida insurance brokerage firm, pleaded guilty to a scheme that submitted fraudulent applications to enroll consumers in Affordable Care Act insurance plans.

4. The DOJ's recent lawsuit against major insurers and brokers marks a significant step in scrutinizing the Medicare Advantage program.

5. UnitedHealth Group under scrutiny for upcoding. They are under investigation by the Department of Justice (DOJ) for allegedly inflating patient diagnoses to secure higher Medicare payments—a practice known as upcoding. This ties to the growing use of assigned doctors to Advantage plans.

6. Independent Health Settles Upcoding Allegations for $100 Million

7. RAND Study Reveals Widespread Hospital Upcoding- Most Favored Nation Status has its benefits.

8. Legislative Efforts to Curb Upcoding in Medicare Advantage are being pursued. It’s called the “no upcode act”.

So How Can Having An Assigned PCP Be Used To Increase Payment to The Insurance Company?

Potentially, Medicare Advantage (MA) insurers like Aetna use PCP assignment schemes to game CMS quality metrics and billing patterns without the patient’s awareness or informed consent. Yes, assigning PCPs without true patient-provider relationships can be a mechanism for fraud, especially when used to:

• Inflate care coordination metrics

• Bill for preventive services not actually delivered

• Boost risk adjustment scores without clinical justification

These actions distort Medicare reimbursements, funnel public funds to insurers, and mislead regulators—all under the guise of patient care coordination.

There are “quality care” excuses that result in payments from Medicare provided documentation is done. THIS FOLKS, IS WHY MEDICARE PATIENTS HAVE INSURANCE NURSES/NAVIGATORS AND ASSIGNED PRIMARY PROVIDERS ATTACHED TO THEIR INSURANCE CARD.

Do We Keep Buying Health Insurance and Medigap Insurance Out of Mass Formation?

The fact that no one is willing to stop writing checks despite the ever rising evidence of abuse, harassment and fraud describes a collective psychological state where a population becomes highly susceptible to groupthink and authoritarian control during times of fear, social isolation, and free-floating anxiety.

What is it going to take to put a stop to this ongoing abuse train? If people just stopped writing checks to Health Insurance Companies they would dry up and go away. Why can’t we take this stand and get this to stop? The corollary is why do doctors keep in the henhouse as well?

Patient Safety-A Root Cause Solution Is Now Available

And A Follow-up On The Frustration With Third Party Payers

Medication Dispensing

Prescribing Errors Are Rampant

If the industry really cared about safety and quality, the solution finally available would have been a priority early into the Electronic Health Records transition. The EHR process was thwarted upon us with the Obamacare legislation. The legislation mostly had forced provider deadlines and huge financial costs to bear. For motivation there were financial penalties/payment clawbacks in the legislation for falling behind. The obsession with HIPAA (Health Insurance Portability and Accountability Act) compliance was a priority over system design. For general public information, HIPAA is a total joke. HIPAA is another source of potential fines to providers who don’t hide your reception signature from others in the waiting area. It is a total illusion of information protection to help pull of an open health care record system through digital information integration.

The Safety Issue:

Every day, in any typical medical practice and IN NEARLY EVERY HOSPITAL ADMISSION AND DISCHARGE transition, there is a broken patient care communication link. This is, by far the largest source of patient care and safety error in the healthcare field. I am speaking about patient prescription management.

In 2014, while serving as a Lee County Delegate for the Florida Medical Association this issue was brought to the “house of medicine”. The referendum in debate was referred to the governing board. The board chose not to pursue the project.

* Resolution 14-102 Electronic Prescribing Accuracy Fix Lee County Medical Society; Ray Kordonowy, M.D., Delegate House Action: Referred to the FMA Board of Governors Board Referral: Council on Medical Services & HC Delivery

RESOLVED, That the FMA bring this glaring root cause error source for present prescribing habits to the attention of the physicians; and be it further RESOLVED, That the FMA seek a seamless solution be built into the current procedures for electronic prescribing by initiating a productive dialogue with Surescripts and other involved vendors; and be it further RESOLVED, That the FMA hold the industry to a specific timeline/deadline to resolving this very important issue; and be it further RESOLVED, That the solution arrived at is tested and validated as effective in functioning to the stated goal of automatic notification of prescription discontinuation to the pharmacy on record for an individual patient’s chart; and be it further RESOLVED, That there be a documentation trail to be discoverable for such changes made, documented and signed in the patient’s electronic medical record. This documentation trail should be evident to the prescriber, the software vendor and the pharmacy on record.

In 2014/15, The FMA board upon review, chose the following action:

Innovation Board Action:: The Board approved recommendation to not adopt this resolution. The directives are unclear and unnecessary and the Board supports monitoring for issues related to e-prescribing and updating the Board as needed

I will let the public decide. Was the board correct in stating the directive was unclear and unnecessary?

Eleven Years Later, Just Today April 29th, 2025, Elation Health EHR Has Developed the Solution For Our Practice Patients

Happy Days Are Here!

Last evening, I sent a request to the Elation Health development team inquiring about automating prescription discontinuation notices to the dispensing pharmacy. Within hours of my inquiry the Elation team replied.

Thank you for reaching out about sending prescription cancellation requests when discontinuing prescriptions. This is fortuitous timing because an updated prescription workflow has been released today to your practice. As part of this update, you can send a prescription cancellation request (CancelRx) while discontinuing the prescription in the same workflow. You can see this new workflow now by selecting Actions > Discontinue or Actions > Document Discontinue on a prescription.

As a note, only ePrescriptions sent from your practice and to pharmacies that support electronic cancellation are eligible for a prescription cancellation request. You will see a note in the Discontinue dialog if a prescription cannot be canceled. You can learn more about the updated workflow via link. Please let me know if you have any questions!

Today I have been monitoring this feature and it appears to be working for CVS and Publix pharmacies. One of the Walgreens pharmacies was not able to “receive” this notice. Within our own dispensing location (MD Scripts) it is also working. I wanted to let the public know that the pieces are in place for bidirectional communication for documenting physician discontinued prescriptions is finally here. I encourage you to ask your pharmacy if their company has activated this interface for your prescription safety. It took 11 years, but… “mission accomplished”.

It will be interesting to see how the Hospital System’s EPIC EHR and Lee Healths’ internal pharmacies activate this feature. Stay Tuned.

Tipping Windmills At The Prescription Benefits Process!

It appears it will take more than Superman and the Caped Crusader to break the mindmeld of the prescription central planners. This whole process is just a big game to the payer players. My latest example once demonstrates the disconnect within the “rule book” of insurance prescription coverage.

As I wrote earlier this past month, the generic version of the FDA approved weight loss drug called Saxenda is now available. The generic compound is called liraglutide and is a daily injection. A month of the highest dose regimen retails presently for $480. This compares to $1080 (this is a discount from a year ago) for one month of Mounjaro the name branded Lilly product.

Mounjaro IS NOT FDA approved for weight loss. The patented protected version of the same molecule is sold as Zepbound. This week I attempted to prescribe the MOST COST EFFECTIVE, FDA approved Glp agonist, liraglutide for weight loss for a patient. This individual does not yet have diabetes.

Within hours, the patient was informed by his pharmacy, my prescription was not a covered product within his plan, regardless of indication. Further, neither the Zepbound nor Wegovey (both patented and approved for weight loss) brands are on the formulary.

The pharmacist reported the Mounjaro or Ozempic (the name branded molecules approved for diabetes as Zepbound or Wegovy respectfully) ARE on the formulary. So essentially the message is: Don’t prescribe the most cost effective product for the indicated approved use. Instead prescribe the more expensive alternative approved for a different indication.

So at this point, the question becomes, in order to help this individual, is the doctor OR IS THE Prescription Benefit Manager/insurance plan engaged in fraudulent prescribing? The phrase “you can’t win for losing” comes to mind.

We Have Got You Coming and Going