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Auditor General Urging Crackdown On Pharmacy Benefit Managers

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PITTSBURGH (KDKA) - Out today -- a special report from the PA Auditor General is urging lawmakers to take steps to lower prescription drug costs. In doing so, he is calling on the carpet people we never see who decide how much we pay at the pharmacy.

"What you pay at the pharmacy counter is partially determined by third parties, including a group of companies called pharmacy benefit managers," said Eugene De Pasquale, Auditor General of Pennsylvania.

(Photo Credit: KDKA)

Whether you use private insurance or Medicaid, the business practices of pharmacy benefit managers, or PBMs, affect your money. "Think of PBM's as the middlemen, who decide which drugs are covered and how much you'll pay for them," said DePasquale, who is calling PBMs on the carpet.

Before generating his special report, DePasquale heard from pharmacists, industry representatives and the Pharmaceutical Care Management Association.

"When such a large market is consolidated in a small number of providers with no oversight, that's a major problem. It's very easy for patient interest, competition and fairness to take a backseat to corporate profits," said Don Sherman, President of Royer Pharmacy.

"Right now, PBMs do not get direct oversight from either my office as the Auditor General or even the Department of Human Services, which is in charge of the Medicaid budget," said DePasquale.

According to the Auditor General's Office, the three largest PBM companies in the US each earn over $15 billion a year. According to DePasquale, are raking in skyrocketing profits, saying in 2017, $2.8 billion was paid by PA taxpayers to PBMs for Medicaid enrollees.

"And it is an entirely fair question to ask what do taxpayers get for that dramatic increase?" said DePasquale.

Depasquale is advocating for a legal change including:

  1.  allowing the state to directly manage its prescription drug benefits
  2.  more transparency in PBM pricing practices
  3.  state oversight of PBM contracts
  4.  requiring a flat-fee pricing model, so the state only pays for services rendered

"Let me repeat that as Auditor General I cannot audit them or their contracts right now. And the Department of Human Services has no oversight of them. That has to change," said DePasquale.

If you would like to review the special report, visit:

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