Ohio Leads Way as States Take on 'Pharmacy Benefit Manager' Middlemen
The setup provided states with more than $20 billion in rebates last year alone
Officials in states across the U.S. showed little interest for years about looking into the black box of pharmacy benefit managers, the pharmacy supply-chain middlemen who have been shrouded in secrecy as they pour billions of dollars worth of prescription drug rebates into state coffers.
That setup provided states with more than $20 billion in rebates last year alone, an average of $450 million for each state that uses the so-called PBMs to help manage their Medicaid programs, a three-month national survey by The Columbus Dispatch revealed. Rebates are meant to be a price concession intended to lower drug costs.
But now officials in many states are realizing that the rebates helped PBMs maintain an opaque system. Within that system, pricing data typically has been shielded by contract or law, allowing for drug prices to be easily manipulated without scrutiny. Drug prices continue to rise while the middlemen — whose main purpose was to help control costs — reap billions in profit from taxpayer dollars meant to care for the poor.
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