February 4, 2020
A new Florida study, released last week, found that major health care companies using pharmacy benefit managers (PBM’s) have positioned themselves to pocket millions of dollars from the state’s Medicaid system that were intended to lower costs for millions of low-income Floridians. The study found that despite processing less than half of one percent of all pharmacy claims, specialty pharmacies affiliated with PBM’s managed to collect 28 percent of the available profit margin from dispensing prescription drugs.
The study was commissioned by the Florida Pharmacy Association and American Pharmacy Cooperative Inc. using data obtained from Florida’s Agency for Health Care Administration (AHCA) by the Small Business Pharmacies Aligned for Reform. Smaller pharmacy operators say the report proves that larger, vertically integrated companies that use PBM’s are using “predatory” business practices that short-circuit the free market.
State lawmakers expressed alarm at the news and underscored the need for greater transparency and oversight when it comes to PBMs’ role in Florida, particularly regarding situations where PBM’s and managed care companies own the pharmacies where they direct patients.
“Markets fail when markets get corrupted and that is what has happened here. When the middleman is allowed to own the end-retailer then the middlemen’s incentive to manage cost appropriately for the benefit of the chain is broken,” said State Representative Randy Fine at a press conference to discuss the study.