Saturday, June 20, 2020

Going Diabetes Old-School During the Pandemic

During the recent pandemic (between March and June 2020, although we are still not completely out of quarantine, we are now in Phase II of reopening), I decided to go old-school on diabetes supplies.

Specifically, I went back to one of the many old blood glucose meters I'd saved over the years. All of them still worked, although I discarded a few for which test strips are no longer sold or had leaked battery acid in the battery compartment.

I made a notable exception for one particular meter model...

Specifically, I had saved a few of the OneTouch Ultra (1) meters I had in my possession. I also had a few OneTouch Ultra 2 meters in inventory, but opted for the original older model because the batteries in all of the meters in my possession were either completely dead or had been removed. The original OneTouch Ultra (1) meter required just a single #2032 battery, whereas the Ultra 2 meter required two of the same batteries. I was able to get a few of those batteries in a dollar store I visited over Memorial Day weekend, so it wasn't a major investment -- it was $1.00.

Going Diabetes Old-School

The reason I went old-school on testing supplies was because I had a pretty large stash of unused test strips which had been given to me by a clinical trial I opted not to participate in (there were some possible adverse events I really did not want to risk experiencing, and there was a good chance I would have been in the "control" group meaning I would not benefit from the treatment anyway, so it just seemed like more trouble than it was worth to participate in that trial). Although the strips in my possession had officially expired (they were more than three years past expiration date), when I tested myself (I repeated the trial on several occasions) using both an unexpired box of the "good" new test strips and the slightly older but technically-expired old test strips, the readings were nearly identical (or within 1-5 mg/dL). That was good enough for me.

Since I was at home for the entire time under quarantine (as was most of the NYC region), I saw little to no risk of using up the old (expired) inventory. I kept using the old system by buying even more inventory from a third-party manufacturer of test strips. Specifically, I went with the Unistrip1 brand of strips made by a company known as Unistrip Technologies, LLC although they actually subcontract the manufacture of their strips to a third-party contract manufacturer. 

Unistrip1 is a brand of generic test strips which work in the old J&J Lifescan OneTouch Ultra blood glucose testing system. As noted, I also restocked some replacement strips for a fairly low cost. I acknowledge that in 2014, there was an FDA recall  of Unistrip's test strips. But that recall was not extended by FDA and I have not seen any further issues. As the J&J litigation and attempts to spread bad word-of-mouth on the product subsided by the fact that J&J sold the business to a private equity firm a few years ago, that has kind of died down. My own comparison tests proved they were fine for my needs while I was quarantined.

But generic replacement strips are now sold online for about $0.10/strip to $0.20/strip (depending on the quantity purchased) by using a strip made by another manufacturer sold from one of the many different suppliers online. I used price to drive my decision on which one (the lowest price won, I went with a company called Medical Supply Corner which wasn't the fastest delivery but offered low-costs and free shipping when I bought the strips), and I bought like another 300 test strips which I am now very close to exhausting. In the meantime, I also refilled the formulary brand (which happened to be Lifescan Verio IQ) since that was Cigna's preferred formulary brand of test strips at the time. But I was recently switched from Cigna to Aetna, which means switching to Roche Accu-Chek meters and strips. Once the insurance broker properly loads up the deductibles (so they don't charge as if I had not already met it - which I have), then I plan to order that brand in the maximum quantity I can.

There are some rival generic manufacturers of these test strips, among them made by PharmaTech Solutions, Inc's. GenUltimate! brand which sells for about the same price (although I found Unistrip1 products to be more readily available from online retail outlets). Those test strips are made at a plant in South Korea but sell for about the same price as Unistrip1. There is another rival called TruePoint which appears to be made by OKBiotech in Taiwan; the company doesn't operate a U.S. website but does sell its products on Amazon and elsewhere although I have not found the prices quite as competitive as Unistrip1 has been. A few others have come and gone over the years as well.

I had previously used the old OneTouch Ultra meter quite extensively in the past. About the only significant change I really noticed compared to the OneTouch Verio tests which aimed to replace that (when faced with a number of generic competitors for the strips) is that Lifescan decided to replace them with Verio which was incompatible with the old meter/strips ... I don't think they even make the meters anymore, although they do make the strips themselves. Right now, there is a lot of unused inventory of the old meters still available for purchase at retailers around the country. The biggest change was the need for calibration, which was a temporary hassle. Most modern blood glucose test systems have abandoned the calibration requirement. It put more burden on the patient for the manufacturers' decision not to control their manufacturing as tightly as necessary. The Verio test strips also have a design which are narrower at the top of the strip,  and because they use real gold as the conductor metal (its cost-effective), that design modification saves Lifescan money. The other very annoying thing is that the old Ultra meter its a multi-step process to get the last reading; first you must scroll through useless averages of the past 15 and 30 days -- which is very annoying when you're trying to get your last reading. But the results of the testing in both systems are equally reliable.

But Lifescan's (a business which J&J sold back in 2018 to the private equity firm Platinum Equity for $2.1 billion), OneTouch business opted to effectively stop support of the old OneTouch Ultra system because it started being used by rivals who drastically undercut them on prices for strips. In a back-to-back comparison, they were nearly identical results (and there's no guarantees that OneTouch's were more accurate than Unistrip's were). If you're like me, the old inventory was already in my possession. So going "old-school" was a very viable and wise decision, especially since I already had that inventory in my possession and it was still perfectly valid. That bought me 3 months of testing supplies while I piggy-banked the brand new stuff for use at a later date.

It's The Rebates, Stupid!

I have grown tired of the games being used to secure preferred formulary placement. Pharma, or medical device companies, are essentially bribing insurance companies with undisclosed, secret and un-auditable "rebates". Back in the 1990's, the healthcare insurance industry lobbied the Financial Accounting Standards Board (FASB) for an exemption to net cost accounting standards ordinarily used in keeping financial records. That enables the insurance companies like United Healthcare, Anthem, Cigna, Aetna and others to collect millions in Rx "rebates" to use as they wish. As it turns out, most insurance companies do not keep the rebate dollars for themselves. Instead, they give the rebates to employers who buy insurance plans from them as "premium offsets". Employers are happy to take any discount off runaway premiums they can get. They generally do not ponder where the money actually comes from.

Most of the dollars associated with that excessive waste come from patients with chronic illnesses who use very heavily-rebated prescription drugs and medical devices (insulin happens to be one of the most heavily-rebated drugs in existence). That's why former FDA Chief Dr. Scott Gottlieb, at a March 7, 2018 conference organized by the National Health Policy Conference of AHIP (which is a lobbyist group for the health insurance industry), made national headlines when he essentially told the group that they were doing it [insurance] wrong.

Former FDA Chief Dr. Scott Gottlieb told the audience (see for more):

"Sick people aren't supposed to be subsidizing the healthy. That's exactly the opposite of what most people thought they were buying when they bought into the notion of having insurance."

Because the rebating system is opaque, and because of consolidation among PBM's (now wholly-owned business units of the largest insurance companies, with the exception of CVS Health, which acquired an insurance company of its own: Aetna) and insurers who have steadily consolidated into a few, nationwide giants. He said that rebate system can result in ever-higher drug prices and everyone from drugmakers to the middlemen to insurers are all taking a slice of the pie.

Moreover, he posited, there’s a "perverse incentive" to spread the benefit of those rebates across plan members, rather than applying them directly to lower the costs of drugs for the sickest patients — thus, it is a system where the sick actually subsidize the healthy.

Gottlieb said "Patients shouldn’t face exorbitant out-of-pocket costs, and pay money where the primary purpose is to help subsidize rebates paid to a long list of supply chain intermediaries, or is used to buy down the premium costs for everyone else."

He continued: "Is a patient really in a position to make an economically based decision? Is the co-pay going to discourage overutilization? Is someone in this situation voluntarily seeking chemo?" (or, for that matter, diabetes, which is treated with the most heavily-rebated drugs in existence).

The answer, of course, is no. "Yet the big co-pay or rebate on the costly drug can help offset insurers' payments to the pharmacy, and reduce average insurance premiums," Gottlieb said.

"Too many benefit plans operate like reverse insurance," Adam Fein, CEO of Drug Channel Institute, wrote in an email to CNBC. He added that "The sickest people taking medicines for chronic illnesses generate the majority of manufacturer rebate payments. These funds are then used to subsidize the premiums for healthier plan members."

He's right about that. And yet, no efforts to change the messed up system have (so far) been successfully implemented. Early efforts by the Trump Administration all failed. Congress has also largely ignored the secretive rebate system that pushes the prices of Rx drugs in the U.S. steadily upward. The best short-term outcome is one I mentioned in my previous post: price caps.

Many people mistakenly blame pharma. To be sure, pharma companies invented rebates and have worked tirelessly to preserve that system, so they certainly share blame for it. But along the way, pharmacy benefits managers (PBM's) and insurance companies merged relentlessly and are now as big as pharma. They also OWN the largest PBM's, too.

The logical question  that no one is willing to answer is "Where the hell is all that Rx rebate money going?"

Adam Fein himself offers some answers with proof. Most of the money is going to employers. On March 12, 2019, he cited data from the Pharmacy Benefit Management Institute's (PBMI). The data in their reporting (see Adam Fein's post at for more details) suggest that employers, also known as "plan sponsors" are the party receiving most of the Rx rebate dollars. If they aren't passing them on to you, odds are that your employer is receiving the Rx rebate money collected by pharmacy benefit managers. Note that the PBMI surveys cited collect data from employers, not PBM's. However, he does note that employers' rebate agreements with PBM's vary widely.

But PBMI's data shows that more and more employers are receiving 100% of the rebates negotiated by their PBM. For larger employers in 2018, 100% rebate pass-through was the most common rebate arrangement. Both figures had increased significantly since 2014. For 2018, smaller employers were slightly less likely to receive 100% of the rebates for traditional and specialty drugs. This approach was still the most common arrangement for traditional drugs and for larger employers regarding specialty drugs.

But Fein observes that larger employers were more likely to receive guaranteed minimum payments with 100% rebate pass-through. Among the employers that received 100% of rebates, 59% of larger employers had a guaranteed minimum rebate amount for traditional drugs and 47% did for specialty drugs. Only 49% of smaller employers had a guaranteed minimum rebate amount for traditional drugs and only 16% did for specialty drugs.

Employer Size Isn't As Important As It Once Was

One other thing is critically important to note here. Large vs. small employers is increasingly less relevant. The reason is because most smaller employers, rather than using a broker to secure insurance benefits for themselves only, are increasingly likely to abandon that in favor of a Professional Employer Organization (PEO) rather than buying benfits directly from insurance companies using a broker. Not all do, but an ever-growing percentage do. We can expect that trend to continue for simple economic reasons.

Last year, the largest PEO was ADP Totalsource. ADP Totalsource is the official employer of record for more Americans than any American company other than Walmart Stores, Inc. (I once worked for a company that used a PEO, and the PEO they used was acquired by ADP, at which point, the company ended the relationship and hired a different PEO instead). By virtue of being so large, PEO's can negotiate lower insurance premiums than all but the largest employers of the past. Think of companies like General Motors. ADP is bigger than they are based upon number of employees. And, a tiny business consisting of less than 10 employees can theoretically hire ADP Totalsource to manage payroll, tax disclosures, benefits, unemployment claims, etc.

That's a market solution to an issue that once put small businesses at a disadvantage to large ones when it came to buying benefits like healthcare insurance.

The U.S. has a major problem with prescription drug and medical device rebates which lawmakers are going to have to fix if U.S. prescription drug prices are to come back down to earth. The good news is that lawmakers seem to be increasingly aware of a big part of the problem, which are the invisible "middlemen" in between the manufacturer and the patient. I blame insurance companies most for the problem. They are taking the money, giving it to companies who buy their insurance plans, while allowing patients to be charged artifically-inflated prices. They are most responsible (not solely, but they bear a larger responsibility) than most are willing or competent enough to acknowledge.

In the end, my trip going old-school on testing supplies was surprisingly cost-effective, and I would encourage others to consider similar actions if they are struggling to manage costs.

Author P.S.

Since I was home for more than 3 months, something else I did in my "old-school" experience was used up my old (nasty) glucose tablets rather than using up preferable (and more costly) Glucose Liquids (called Glucose Shots at Walmart stores and several other retailers). While CVS and others now offer what they call "soft" glucose tablets, gummies and gels which were not available in the past, I had an inventory of the old-school tablets which you'd break your molars on if they did not rot them with cavities first, and I decided to try to use old-school ingenuity to use those too. Guess what? I found that by soaking them in very hot (not boiling) tap water for about 45 minutes until they haven't quite liquidated yet are clearly softening. Then, drain the water without removing the tablets from the container (such as by holding your hand over them in the kitchen sink). I used flat containers designed for olive oil meant for dipping bread in, but a bowl will work similarly; only add enough water to cover the tablets. You may even leave a tiny bit of residual water in the dish, and just let the moistened tablets to sit for another day or two until the water is completely evaporated and the tablets have started to harden once again.  I ended up making my old tablets usable again without destroying my teeth. Anyone who argues they require precise measures probably won't like it, but I wasn't concerned if a tiny bit of sugar disappeared. But when you need a tablet (or three), they will be soft and dissolve in your mouth without even having to chew them. Try it. Its yet another way to bring old products back into utility.

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