FROM PHARMACIST STEVE AND YOUAREWITHTHENORMS: STRATEGIC ASSESSMENT INTERMEDIARY IMPACT OF PHARMACY BENEFIT MANAGERS (PBM)  Part-2

NORMAN J CLEMENT RPH., DDS, NORMAN L. CLEMENT PHARM-TECH, MALACHI F. MACKANDAL PHARMD, BELINDA BROWN-PARKER, IN THE SPIRIT OF JOSEPH SOLVO ESQ., INC., SPIRIT OF REV. IN THE SPIRIT OF WALTER R. CLEMENT BS., MS, MBA. HARVEY JENKINS, MD, PH.D., IN THE SPIRIT OF C.T. VIVIAN, JELANI ZIMBABWE CLEMENT, BS., M.B.A., IN THE SPIRIT OF THE HON. PATRICE LUMUMBA, IN THE SPIRIT OF ERLIN CLEMENT SR., EVELYN J. CLEMENT, IN THE SPIRIT OF WALTER F. WRENN III., MD., JULIE KILLINGSWORTH, RENEE BLARE, RPH, DR. TERENCE SASAKI, MD LESLY POMPY MD., CHRISTOPHER RUSSO, MD., NANCY SEEFELDT, IN THE SPIRIT OF WILLIE GUINYARD BS., JOSEPH WEBSTER MD., MBA, BEVERLY C. PRINCE MD., FACS., NEIL ARNAND, MD., RICHARD KAUL, MD., IN THE SPIRIT OF LEROY BAYLOR, JAY K. JOSHI MD., MBA, AISHA GARDNER, ADRIENNE EDMUNDSON, ESTER HYATT PH.D., WALTER L. SMITH BS., IN THE SPIRIT OF BRAHM FISHER ESQ., MICHELE ALEXANDER MD., CUDJOE WILDING BS, MARTIN NJOKU, BS., RPH., IN THE SPIRIT OF DEBRA LYNN SHEPHERD, BERES E. MUSCHETT, STRATEGIC ADVISORS

🕷️🕷️🕷️

“..They thought they could bury us, but didn’t know; We were seeds..”

“..PBMs have evolved into a massive false healthcare reality of conglomerates that prioritize shareholder dividends over patient healthcare outcomes..”

The Invisible Gatekeepers: Understanding Pharmacy Benefit Managers (PBMs) OR PIRACY BY MAIL

🕷️

The Middleman in the Shadows

In the architecture of American healthcare, a Pharmacy Benefit Manager (PBM) was originally designed as a modest support beam. Thirty to forty years ago, these were “pure” administrative processors—entities that managed paper claims and helped independent pharmacies run more efficiently for a small administrative fee.

DIVIDENDS OVER PATIENT HEALTHCARE OUTCOMES

Today, that purity has been replaced by a predatory infrastructure. PBMs have evolved into a massive, false healthcare reality of conglomerates that prioritize shareholder dividends over patient outcomes.

The “Big Three”—CVS Caremark, Express Scripts, and Optum RX—now control approximately 80% of the market. To understand their scale, consider that these parents are among the top 10 companies by revenue in America (CVS Health is #6 and UnitedHealth is #3).

The Quintessential Middleman PBMs are “the paper shufflers who have everyone by the shorthairs.” They sit at the junction of drug manufacturers, insurers, and pharmacies, exerting total control over the flow of money and medicine.

🕷️🕷️🕷️

The Three Pillars of PBM Control:

Data: They own and manage the information regarding who takes what medicine and how much is paid.

Formularies: They decide which drugs are “covered” by insurance and which are not.

Rebates: They negotiate secret “kickbacks” from drug manufacturers in exchange for covering their products.

By positioning themselves at every junction, PBMs act as gatekeepers that fundamentally break the traditional rules of a marketplace.

——————————————————————————–

🕷️🕷️🕷️

The Milk Test: Why Drug Pricing Isn’t “Normal” Capitalism

In a healthy capitalist system, transparency drives competition. If you want a gallon of milk, you can compare the price tag at Target to the one at Kroger. If Target charges 2** and Kroger charges **40, you exercise consumer choice and walk down the street.

THE “Gag Clauses” RULE

In the PBM industry, this transparency is intentionally obscured. A patient arriving at a pharmacy counter often has no idea what their drug actually costs. Even worse, PBMs utilize “Gag Clauses”—contractual rules that prevent your local pharmacist from telling you that the cash price for your medication is actually cheaper than your insurance co-pay.

Normal Capitalism vs. The PBM Model

Feature	Normal Capitalism (The Milk Analogy)	The PBM Model (The “Black Box”)
Price Visibility	Consumers see the price tag ($2 at Target vs. $40 at Kroger).	Prices are hidden; patients only see their PBM-mandated co-pay.
Consumer Choice	Shoppers switch stores to find the best deal.	Patients are forced into specific PBM-owned “channels.”
Market Incentives	Lower prices attract more customers.	Higher list prices are preferred to generate larger PBM rebates.
Data Access	Information is public and easy to compare.	Data is obscured behind “Gag Clauses” and “Black Boxes.”

This lack of transparency allows the “Formulary” to be weaponized as a tool for profit rather than a tool for health.

——————————————————————————–

The Formulary

🕷️🕷️🕷️

DRUG PIRACY BY MAIL: The (PBM’s) “Holy Grail”

The formulary is the list of drugs an insurance plan covers. While it was once a clinical list to ensure quality, it is now an aggressive profiteering engine. PBMs use their access to millions of “lives” (insured members) to demand money from manufacturers for “placement.”

The Three Tiers of Formulary Control:

1. Placement: The PBM decides if a drug is on the list at all. If a manufacturer refuses to pay the rebate, the PBM “whacks” the drug, leaving it uncovered.
2. Preference: PBMs sort drugs into “Tiers.” A “Tier 1” drug has a low co-pay, while a “Tier 3” drug is expensive. The PBM moves drugs between tiers to maximize their own revenue.
3. Exclusion: PBMs use “Step Therapy” (forcing a patient to “fail” on a cheaper drug first) or “Prior Authorization” (requiring permission from the PBM bureaucracy) to block access.

Note on Jargon: PBMs often designate expensive drugs as “Specialty Drugs.” This is a business term, not a clinical designation. It is used as a mechanism to steer these high-cost treatments away from local pharmacies and into PBM-owned mail-order facilities.

——————————————————————————–

The Rebate Trap: The “Reverse Auction” Explained

Logic suggests that a PBM would want to cover a cheaper drug to save money. However, the PBM’s profit model incentivizes the opposite. They favor high-priced drugs because their rebate (kickback) is a percentage of the list price.

The Logic of the Reverse Auction:

1. Higher List Price ($2,000)
2. Higher Rebate % (50%)
3. Higher PBM Profit ($1,000)

Piracy By Mail (PBMs) frequently hide behind the phrase “Lowest Net Cost.” In PBM-speak, this means the drug that is cheapest for the PBM/Insurer after they pocket the rebate. This is why a PBM will exclude a “dirt-cheap generic” from the list in favor of a $10,000-a-month brand-name drug—the rebate on the expensive drug is simply more lucrative for them.

——————————————————————————–

🕷️🕷️🕷️

🕷️

Vertical Integration and “Patient Steering”

The “Big Three” are vertically integrated conglomerates: CVS Caremark (CVS Health/Aetna), Express Scripts (Cigna), and Optum RX (UnitedHealth). They own the insurer, the middleman, and the pharmacy. This allows them to engage in “Patient Steering,” forcing patients to use PBM-owned pharmacies.

The Three Dangers of Steering:

• Economic: PBMs often reimburse their own pharmacies 10 times more than they pay independent “mom-and-pop” pharmacies for the same drug. This causes “death by a thousand cuts” for local businesses, such as the 122-year-old pharmacy in Randolph, WI, that was forced to close.
• Safety: A Southwestern Oklahoma State University study found that mail-order shipping is hazardous. 100% of cold-chain drugs failed the study, reaching unsafe temperatures. Researchers recorded “non-cold chain” medications reaching a peak of 121°F in the back of delivery trucks.
• Choice: Patients are told they have a “choice,” but if they don’t use the PBM’s pharmacy, their insurance benefit won’t apply, or they are charged “out-of-network” costs.

——————————————————————————–

Case Study:

The Human Cost of Opacity

(The Story of Cole)

The mechanical details of PBMs have lethal consequences. Cole was a 22-year-old managing asthma with a daily steroid inhaler. When his PBM changed his formulary, his medication moved from Tier 1 to Tier 3. A 90-day supply that previously cost 70 suddenly carried a price tag of **539.18**.

inappropriate place to fill this medication

Cole could not afford the $500 markup. During a Wisconsin deep freeze, he suffered a massive asthma attack and cardiac arrest. He passed away on January 21st. The economic tragedy is that the inhaler Cole needed costs only 5–10 to manufacture.

When his parents asked why their local hospital couldn’t fill the life-saving prescription, they were met with the cold, bureaucratic logic of the PBM:

“I asked the pharmacist… ‘Why aren’t they going to allow us to fill his medication here?’ And he said, ‘All it says is that this is an inappropriate place to fill this medication.‘”

——————————————————————————–

Summary:

The Economics of a “Broken” System upside down

The PBM industry generated $7.3 billion in profits between 2017 and 2022. Critics describe this as a form of racketeering. By design, the system favors “Profits Over Patients,” artificially inflating prices and “whipsawing” patients between medications based on whichever manufacturer pays the highest kickback.

Learner’s Cheat Sheet: 3 Key Takeaways

1. High Prices = High Profits: PBMs profit more when list prices stay high. They will actively block cheap generics to protect their high-percentage rebates.
2. The “Net Cost” Myth: “Lowest Net Cost” means the lowest cost to the PBM after they take their cut. These “savings” rarely reach the patient’s wallet; they stay in the PBM’s bank account.
3. Vertical Monopolies: The “Big Three” (CVS Health/Aetna, Cigna/Express Scripts, UnitedHealth/Optum) control the insurer, the drug list, and the pharmacy, creating a closed loop that eliminates competition and patient choice.

The system is currently upside down, with the entities meant to manage benefits serving as the primary drivers of cost. As many in the industry have noted, “If criminals understood what PBMs were, it’s what they would aspire to be.”High-impact reform is no longer a policy preference—it is a matter of life and death.

🔓 🔓 🔓 

ALL WATCHED OVER BY MACHINES OF LOVING GRACE

BE SURE TO DONATE TO THE MARK IBSEN GOFUNDME DEFENSE FUND, WHERE THE SON ALWAYS RISES!!!

OUR TREE OF KNOWLEDGE SHALL NEVER BE SUPPRESSED

FOR NOW, YOU ARE WITHIN

THE NORMS

REFERENCES:

THE 98 PERCENT GRAND HALL OF MIRRORS

REFERENCES:

🔥 Where This Hits Your Case (This Is The Real Value)

Now let’s connect it directly to you.

⸻

1. You Are Already Halfway There

Your framing:

“Surveillance-driven access environment”

Rifai’s framing:

“Unconstitutional adjudicatory structure”

💡 These are different angles on the same problem:

👉 System-level illegitimacy

⸻

2. You Have an Untapped Weapon

You are currently arguing:
   •   ADA Title II
   •   §504
   •   meaningful access

Rifai introduces:

👉 Structural constitutional attack

Specifically:
   •   Lack of accountability
   •   Lack of neutral adjudication
   •   System coercion before judicial review

⸻

3. The “Proceeding Is the Injury” Maps PERFECTLY to You

This is where it gets powerful.

You are NOT arguing:
   •   one denial
   •   one prescription

You are arguing:

ongoing exposure to a system that constrains care

That aligns almost exactly with:

👉 “The process itself is the harm”

⸻

4. Jurisdiction Strategy (Extremely Important)

Rifai is fighting:
   •   forced channeling into agency review
   •   delayed judicial access

You have already positioned:
   •   Ex parte Young
   •   ongoing harm
   •   prospective relief

💡 That is the same battlefield

⸻

⚠️ Where You Must Stay Disciplined

Do NOT:
   •   Turn your case into an Article II case outright
   •   Attack ALJs directly unless strategic

Instead:

👉 Use Rifai as supporting authority for access to court

⸻

🧭 Strategic Use For You

This article gives you three deployable tools:

⸻

✔ 1. Early Judicial Review Argument

You can say:

Courts have recognized that requiring plaintiffs to endure a potentially unlawful administrative structure before seeking relief risks rendering judicial review meaningless.

⸻

✔ 2. Structural Harm Framing

You can strengthen your causation:

The injury arises not only from discrete outcomes, but from continuous exposure to a system that constrains access through embedded surveillance and enforcement mechanisms.

⸻

✔ 3. Anti-Channeling Argument

You push back on dismissal:

Statutory review schemes cannot foreclose constitutional or structural challenges where the process itself is the injury.

⸻

🧠 Final Insight (This Is The Deep One)

Kenji, this is the real takeaway:

👉 Courts are starting to realize:

The danger is not just bad outcomes
It’s systems that cannot be meaningfully challenged until after they do damage

⸻

And that is exactly what you’ve been building.

⸻

🧩 Bottom Line
   •   Adya (SmartCareRx) = process failure and APA weakness
   •   Rifai = structural constitutional attack
   •   Your case = systemic access denial under ADA

👉 Together, they form a three-layer argument:
1. Process must be fair
2. Structure must be constitutional
3. Access must be meaningful

⸻

If you want next step, I can:
   •   Draft a tight, court-ready paragraph blending Rifai + your ADA theory
   •   Or build a jurisdiction defense section that uses this cleanly without overreaching