More states, including Pa., are taking on pharmacy benefits managers, demanding to see the savings in Medicaid
A new
"Every Medicaid program in the country should be investigating what the hell is going on," said attorney
PBMs customize contracts according to what clients want and their patients need, responded a spokesperson for the
PBMs typically negotiate rebates with drug manufacturers, and they set reimbursement rates for pharmacies who sell the drug to patients. As drug prices have risen -- and become a heated political issue -- PBMs and drugmakers have blamed each other for driving up the costs of prescriptions.
Independent pharmacists, meanwhile, have said they're getting squeezed by PBMs on payments. "You get tired of filling prescriptions and losing money on them," said
Complaints from pharmacists have prompted officials in a number of states to sound alarms over one way that PBMs make money: "spread pricing." It's a practice in which PBMs bill a health plan a higher amount for a drug than what they pay to reimburse the pharmacy, and keep the difference (or the "spread").
The spread the company collects is not pure profit, according to CVS spokesperson
Those clients, in Medicaid, typically are other companies. In
Auditor General
According to the state, five out of eight managed care organizations use spread pricing. The PBMs those companies use in
"The sheer fact that they [PBMs] are earning a spread does not necessarily mean that they are earning too much," said
"It's up to the state Medicaid program to manage the program appropriately," Fein said. "If they allow the PBMs to be overcompensated, it's hard to blame the PBMs for accepting the extra compensation."
PBMs say they produce savings. At a state
"When administrative fees are hidden in the spread," he told the legislature, "it's impossible to tell what the state is really paying for, or whether the same service could be provided at a drastically lower rate."
___
(c)2018 The Philadelphia Inquirer
Visit The Philadelphia Inquirer at www.philly.com
Distributed by Tribune Content Agency, LLC.
Top Reasons To Avoid Car Insurance Lapses
W. R. Berkley Corporation Declares Special Dividend and Regular Quarterly Dividend
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News