PBM Markups Cost State Medicaid Estimated $113 million

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TALLAHASSEE, Fla.—Today, the Florida Pharmacy Association (FPA) released the following statement on the pharmacy benefit managers (PBMs) report commissioned by the Agency for Healthcare Administration (AHCA) conducted by Milliman. The below statement should be attributed to Michael Jackson, CEO of the Florida Pharmacy Association.

“The report commissioned by AHCA shows what we already know: PBMs are gaming the system, taking money from taxpayers for their own benefit. We now have a state-sanctioned report that highlights how much prescription drug middlemen markup drugs for their own profit and shows clear evidence of anti-competitive behavior in reimbursements. Based on this report, we estimate that previously concealed PBM prescription markups cost Florida’s Medicaid system more than $113 million. We applaud AHCA for conducting this thorough analysis, which also aligns with a study our association commissioned earlier this year.

“AHCA has effectively lifted the veil that has long hidden the shady practices of PBMs who aim to make a buck off the backs of some of Florida’s most vulnerable families. The hired sharks of prescription drug middlemen can no longer hide behind political donations and smoke and mirror messaging to shield their exploitative business practices.

“It is past time Florida addresses the numerous bad practices of prescription drug middlemen, who are often owned and operated by Fortune 15 companies and stand to profit billions more if regulatory oversight is kept in the dark. As a state, we can no longer ignore the chokehold PBMs have on the prescription drug industry. Florida’s Medicaid system is broken. We call on Gov. Ron DeSantis to direct AHCA to immediately propose solutions to address one of the biggest threats to patients and our state’s economy.”

Rep. Jackie Toledo (R-Tampa) said, “The AHCA report is clear: Florida can’t afford to ignore the control that PBMs—prescription drug middlemen who come between you and your medication—have over our Medicaid system. A broken Medicaid system is bad for patients, bad for taxpayers, and bad for our state’s economy. This year we will be facing major budget cuts and we cannot afford to have Fortune 15 companies siphoning off taxpayer dollars. I look forward to working with my colleagues in both chambers to come up with solutions to this growing problem.”

Sen. Tom Wright (R-Port Orange) said, “Prescription drug middlemen have taken advantage of the system; one they created for their own benefit, ultimately blocking patient access to life-saving medication. We can no longer allow this industry to operate unchecked and I look forward to working on real solutions that benefit Florida patients and taxpayers.”

The explosive AHCA report confirms that the controversial PBM practice of spread pricing – which has been banned by several states – is being aggressively exploited in our state’s Medicaid program. Spread pricing is when the prescription drug middlemen charge the state more than what they reimburse the pharmacy and secretly pocket the difference. The report also shows wildly inconsistent Medicaid reimbursements for PBM-affiliated pharmacies. The report also recommends greater transparency in pricing, which the FPA has been a staunch advocate. Ultimately, when there is greater transparency patients and taxpayers are on the winning end.

PBMs are prescription drug middlemen who manage the transaction between pharmaceutical manufacturers, health insurance agencies, pharmacies, and ultimately everyday families. Unfortunately, just three PBMs, who are Fortune 15 companies, control 85 percent of the health care market, and PBMs make health care decisions for more than 260 million Americans. A severe lack of transparency and oversight has left them with too much financial power, and the process by which they make money is confusing by design so that they can keep profits under wraps .