PBM Formulary Drop — Fatal Outcome
Cole William Schmidtknecht
Poynette, Wisconsin · Optum Rx (UnitedHealthcare subsidiary) · Walgreens, Appleton WI
March 18, 2001 — January 21, 2024
Cole had insurance. His PBM dropped his inhaler from the formulary without warning, raising the out-of-pocket cost from $66 to $539 overnight. No generic was offered. No alternative was provided. He was 22, living independently, and paying his own bills. He chose rent. He died eleven days later.
Who Cole Was
Cole Schmidtknecht was 22 years old, living on his own with his childhood best friend in Appleton, Wisconsin, working full-time, and — by his family's account — finally finding his footing. He'd been diagnosed with asthma as an infant and had navigated years of additional challenges: poor eyesight, ADD, academic struggles, severe depression, and a serious knee injury after high school. But in the period leading up to January 2024, he was doing well. He was independent. He was on a positive trajectory.
He had been managing his asthma daily with an Advair Diskus inhaler — a medication his insurance had been covering for between $35 and $66.86 per month. He had insurance. He was a compliant, medically engaged patient with a documented chronic condition that required daily maintenance medication to stay alive.
What Happened
The Formulary Drop
Cole goes to a Walgreens in Appleton to pick up his Advair Diskus refill. A pharmacist tells him his medication is no longer covered by his insurance. Without coverage, the out-of-pocket cost is $539.19 — a 700% increase from what he had been paying. No generic version is offered. No alternative is provided. No prior notice was given that his formulary coverage was changing.
The Choice
Cole leaves the pharmacy without his medication. He chooses to pay rent. He is 22 years old, living independently, responsible for his own bills. The choice is not reckless — it is the choice a 22-year-old who has always had insurance coverage for a medication makes when that coverage disappears overnight without warning or transition plan. He had no reason to believe the next five days would be different from any other.
Severe Asthma Attack
Cole suffers a severe asthma attack — five days after leaving the pharmacy without his medication. He goes into cardiac arrest. He is admitted to the ICU and placed on a ventilator.
Cole Dies
Cole Schmidtknecht dies at age 22 — six days after the asthma attack, eleven days after he stood at a Walgreens counter and found out his insurance no longer covered the medication he needed to breathe. He was eleven days from his 23rd birthday.
Who Is Responsible — and Why This Case Is Different
This Is Not a Prior Authorization Case
Every other fatal case in the Reason Room involves a prior authorization denial — a doctor orders treatment, an insurer says no, a patient deteriorates while fighting the bureaucracy. Cole's case is different. Nobody denied his doctor's order. Nobody said the medication wasn't medically necessary. A Pharmacy Benefit Manager removed his medication from the formulary — the list of drugs an insurer will cover — and the price went from affordable to impossible overnight, with no warning and no alternative pathway offered.
This is the PBM vertical integration problem in its most direct and lethal form. Optum Rx — a subsidiary of UnitedHealthcare — controls what drugs are covered, at what cost, and with what alternatives. Those decisions are made without physician input, without patient notification timelines, and without any obligation to provide a clinical bridge when a life-sustaining medication is dropped from coverage.
Optum Rx — The PBM
One of three PBMs that collectively control approximately 80% of all U.S. prescription drug volume. A subsidiary of UnitedHealthcare. Decides which drugs appear on formularies, which tier they're placed in (which determines patient cost), and which generics or step-therapy alternatives are available. Cole's parents allege the 700% price increase in Advair Diskus — from ~$66 to $539 — resulted from Optum Rx's formulary decision. Optum Rx did not respond to requests for comment on the lawsuit.
Walgreens — The Pharmacy
When the pharmacist at the Appleton Walgreens told Cole his medication was no longer covered, no generic alternative was offered and no step therapy pathway was identified. The lawsuit alleges Walgreens had a duty — as the dispensing pharmacy — to inform Cole of available alternatives, assist with alternative coverage options, or escalate to his prescriber. Walgreens declined to comment, citing pending litigation.
The Vertical Integration Problem
Cole's case illustrates exactly what S.3822 — the Break Up Big Medicine Act — is designed to address. UnitedHealthcare is simultaneously the insurer and the parent company of the PBM (Optum Rx) that made the formulary decision that removed his coverage. There is no independent check on that decision. The company that pays the claim is the same company that decides which claims get paid — and at what price. The Break Up Big Medicine Act would prohibit this simultaneous ownership. Cole's case is the human cost of the structure the bill would dismantle.
The Lawsuit
Cole's parents, Shanon and Bil Schmidtknecht of Poynette, Wisconsin, have filed a federal wrongful death lawsuit against Optum Rx and Walgreens, alleging the 700% price increase directly caused their son's death. The lawsuit is one of the first to target a PBM formulary decision as a proximate cause of patient death.
Since Cole's death, his family has become advocates for PBM reform. His father Bil — who goes by @angrydadwi on social media — has been working with legislators across the country and traveling to Washington, D.C. to push for accountability. The family operates through Patient Protector, an advocacy organization built around Cole's story and the broader PBM accountability fight.
Cole's family's summary of PBMs: "Pharmacy Benefit Managers, while originally created to streamline the administrative burden of processing prescription claims, have now become a modern day mafia. They're vertically integrated with every other element of the prescription supply chain: health insurance companies; pharmacies; wholesalers; and even now quasi-manufacturing."
— Patient Protector, patientprotector.us/meet-cole
What Cole's Case Adds to the Record
The other cases in the Reason Room demonstrate what prior authorization denial does to patients who need treatment. Cole's case demonstrates what happens when the financial architecture of the system makes life-sustaining maintenance medication unreachable — not through a clinical decision, but through a business decision made without notification, without physician involvement, and without any obligation to provide an alternative.
Cole was not denied care. He was priced out of it. His insurance covered his inhaler — until the morning it didn't. The formulary change happened in the background of a system the patient has no visibility into and no recourse against. By the time he found out at the pharmacy counter, the coverage was already gone.
He was 22. He had insurance. He was responsible — he showed up to pick up his medication. The system failed him in the eleven days between January 10 and January 21, 2024. That failure has a name and an address: it lives at the intersection of PBM formulary control, vertical integration, and zero notification requirements.
Sources
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