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As the U.S. opioid crisis deepened, Medicare plans administered by UnitedHealth and CVS Health were a top source of OxyContin sales, a Barron’s investigation found.

By the time the maker of OxyContin pleaded guilty to a federal charge of misbranding the drug in 2007, Purdue Pharma had spent a decade selling opioid prescriptions through commercial health plans.

Five years later, with restrictions tied to the plea deal expiring, Purdue saw a new sales opportunity in an “aging population with painful conditions,” according to internal company documents. As the U.S. opioid crisis deepened, records show, Purdue sharpened its focus on the federal government’s Medicare prescription program for seniors.

Between 2012 and 2013, Purdue deployed an email marketing campaign to healthcare providers, launched new advertising in a long-term-care medical journal, and armed its sales force with patient vignettes to share with doctors. Each effort emphasized OxyContin’s insurance coverage through what’s known as Medicare Part D.

“Medicare Part D is the only significant and growing book of business for OxyContin,” a McKinsey analysis for Purdue found in 2013.

Telling doctors the opioid was covered by Medicare was only one part of the equation. To secure that coverage, Purdue had to negotiate terms with two corporate giants in the Medicare business, UnitedHealth Group and CVS Health.

A Barron’s investigation—the second in a series on pharmacy-benefit managers, or PBMs—found that Medicare coverage administered by arms of UnitedHealth and CVS Health was a top source of OxyContin sales, at a time when government watchdogs were raising alarms about opioid use and spending in the program.

UnitedHealth and CVS wear multiple hats in Medicare Part D. They serve as so-called sponsors of drug plans that seniors can purchase each year. They also operate PBMs, the middlemen that negotiate between drugmakers and insurance companies.

PBMs are under intense scrutiny in Washington. The secretive nature of deals between the firms and drugmakers is a particular focus as U.S. drug prices soar. The FTC has accused the companies of inflating insulin prices by demanding rebates and fees—a suit the companies are fighting fiercely. A bipartisan congressional bill proposed this month seeks to split up PBMs and their affiliated pharmacy businesses. Meanwhile, U.S. representatives recently asked the DOJ to investigate PBMs’ role in opioid sales following Barron’s coverage of the industry.

The PBMs say they save money for clients and point to years of efforts to combat the opioid crisis.

Barron’s found that Medicare plans using CVS’ PBM comprised the largest source of OxyContin sales in 2016, according to internal Purdue documents listing health plan accounts. The PBM, CVS Caremark, collected $132.6 million in rebates and fees on the sales.

Another set of Medicare plans, those using UnitedHealth’s Optum Rx PBM, were the third-largest source of sales in 2016, the documents show. Optum Rx took in $126.9 million in rebates.

UnitedHealth and CVS prescription plans for Medicare also authorized higher amounts of OxyContin compared with plans from some other insurers, Barron’s found.

Neither company had a direct comment when asked about the rebate figures or why their Medicare Part D plans differed from other insurers. The Centers for Medicare and Medicaid Services told Barron’s that it doesn’t review rebate agreements, due to prohibitions in the law that established Part D plans.

Prescription rebates are negotiated between PBMs and drugmakers and are set as a percentage of a drug’s list price. The rebate numbers are confidential and aren’t typically available to the public.

Barron’s reporting uses records produced in opioid litigation and probes that are now held by the Opioid Industry Documents Archive managed by University of California, San Francisco, and Johns Hopkins University.

While insurers share some Medicare rebate money with the government, they retained the bulk of it in 2021—about two-thirds of drug rebates and certain pharmacy fees—according to an analysis by the Medicare Payment Advisory Commission, or MedPAC, an independent congressional agency.

The companies can use those rebate funds to offset business costs and offer lower premiums, a fierce point of competition to win Medicare customers. Insurance plans “have had incentives to try to maximize rebates and keep premiums low,” MedPAC said in a 2023 report. The problem for some patients, according to the Government Accountability Office and others, is that rebates don’t directly lower the cost of drugs at pharmacy counters.

The PBMs say they are an important counterweight to the power of the pharmaceutical industry. CVS told Barron’s: “Rebate agreements help us lower the cost of drugs, including opioids. The rebates that our PBM, CVS Caremark, negotiates with drug manufacturers are a key tool for how we deliver lower net prices on prescription drugs for the employers, unions, and government programs that hire us.”

CVS and UnitedHealth have also told Barron’s that they worked to stem opioid abuse. A spokesperson for UnitedHealth’s Optum Rx PBM said: “We have taken a comprehensive approach to combat the crisis, even before the CDC introduced its opioids guidelines in 2016. Optum Rx has implemented a robust Opioid Risk Management program to actively manage the safe and appropriate use of opioids for both acute and chronic pain.”

Purdue, which pleaded guilty to fraud and kickback conspiracy charges related to the marketing and sales of OxyContin in 2020, declined to comment for this article.

McKinsey apologized this month for its work with Purdue on OxyContin sales after reaching a deferred prosecution agreement with the Department of Justice. The consulting firm declined to comment further to Barron’s.

OxyContin was first approved by the Food and Drug Administration in late 1995. By 2008, poisonings, which include overdoses, surpassed motor vehicle deaths as the No. 1 cause of injury fatalities in the U.S., a statistic fueled by the increase in deaths involving opioids, according to the CDC.

In 2012, 29% of OxyContin prescriptions were from Medicare Part D, up from 23% two years prior, McKinsey found.

Insurers, for their part, took varied approaches to how they covered opioids and specifically OxyContin, with its history of links to abuse and heftier price tag than generics.

Aetna stopped covering OxyContin in Medicare plans around 2010, according to Purdue internal records. In a 2013 report, McKinsey told Purdue that Aetna “desires to move away from perceived OxyContin patients.” However, the insurer, later acquired by CVS Health, continued to cover OxyContin in commercial insurance plans.

Blue Cross Blue Shield of Massachusetts, a private insurer, placed new limits on opioid prescriptions starting in the summer of 2012, after analyzing trends in claims data. The effort was later studied and written about by CDC researchers.

Medicare warned insurers in 2012 about troubling opioid use in the Part D program, prompted by a Government Accountability Office report on “doctor shopping” for drugs including OxyContin. Officials outlined safety measures insurers were allowed to implement, such as setting quantity limits and reviewing individual cases. The next year, Medicare enacted a policy for monitoring high-risk users with prescriptions from multiple doctors and pharmacies.

Still, in 2015, 30% of Medicare Part D enrollees received an opioid, and the program’s expenditures on opioids had reached $4.1 billion, according to a 2016 Office of Inspector General report. Spending was highest on OxyContin, the report said.

At Purdue Pharma’s Connecticut headquarters, the connection between rebates and sales was clear.

Rebates helped ensure access to customers, according to a 2012 presentation for the company’s board. The payments were “necessary to gain or to maintain” preferred placement on an insurer’s formulary—its list of covered drugs—meaning a cheaper copay for patients. A successful rebate negotiation could “deliver a positive return and competitive advantage,” the presentation said.

UnitedHealth’s negotiations with Purdue in 2013 showed how the insurer’s financial considerations in the Medicare market were evolving.

Seniors choose Medicare drug benefits through two avenues. Stand-alone plans only cover prescriptions, while Medicare Advantage plans bundle medical coverage for prescriptions, doctor appointments, and hospital stays.

UnitedHealth sold both types of plans and made different decisions on OxyContin for each, documents show.

The insurer dropped OxyContin from its Medicare Advantage plans in 2013. UnitedHealth, however, remained willing to cover OxyContin on stand-alone Medicare prescription plans—if Purdue would increase its rebate payments from 23.5% to nearly 60%, according to Purdue documents.

A senior Purdue executive balked at the figure. “United, as a whole, has become much more aggressive in their approach, since developing their own PBM (OptumRx),” he wrote to Purdue’s CEO at the time.

The executive said he was ready to walk away from the deal despite his projections that Purdue could lose $900 million in sales over the following five years without UnitedHealth’s Medicare coverage.

It didn’t come to that. By early May, the two sides reached agreement on a 50% rebate.

The next month, Purdue ran new advertising on OxyContin’s availability with insurance. The “journal ad reinforces the brand’s excellent Medicare Part D coverage and leverages images of older patients,” Purdue management said in a report to the company’s board of directors.

Many of those patients ended up with 80-milligram OxyContin tablets—the most expensive, and highest strength, dose. For Purdue, it was also the most lucrative.

In 2016, CVS Caremark and UnitedHealth’s Optum Rx collected more rebate money from Medicare plans on 80-milligram OxyContin than any other strength—28% of Caremark’s rebate total, and 31% for Optum.

Barron’s found that Medicare plans offered by CVS Health and UnitedHealth allowed four tablets a day of the highest strength, at a time when other health plans placed stricter limits.

In Florida’s Miami-Dade County, for instance, several plans limited OxyContin quantities to either two or three tablets a day, and the same was true in Queens, N.Y., according to drug coverage detailed by Q1Medicare.com, a plan-finder website.

Medicare Advantage plans in Allegheny County, Pa., home to Pittsburgh, limited the 80-milligram tablets to two a day and required prior authorization, according to Q1Medicare. Similar restrictions were evident in El Paso County, Texas.

“I wish that this lever had been pulled harder,” says Sanket Dhruva, an associate professor of medicine at University of California, San Francisco, who studied variations in how Medicare prescription drug plan formularies restricted opioids between 2006 and 2015. “It would have led to some frustration by some clinicians for some patients. But it would have been worth it.”