I t odu to lette ................................................

Glossa ................................................................

Ba kg ou d ...........................................................

What is a i depe de t pha a ? .....................

What is a PBM? .....................................................

PBMs i the pu li se to .....................................

Ho PBMs ake o e .......................................

A atio al ie .....................................................

What e hea d ...................................................

. La k of t a spa e .................................

. La k of o e sight .......................................

. Rei u se e t dispa it ..........................

Co lusio ..........................................................

Re o e datio s ..............................................

Ta le of o te ts

W e all k o health a e osts a e e o ous i the U ited States. I fa t, health a e

spe di g ea hed $ . t illio i — that s $ , pe pe so a uall .

A o g the iggest fa to s i these osts a e p es iptio d ug p i es.

Co pa ies ou e e e hea d of — a d so e ou ha e — de ide hat ou o-pa ill e, hi h

p es iptio d ugs ill e o e ed ou pla , the o e all p e iu s ou pa a d o e.

A la gel u k o ut assi e pla e i this field is a g oup of o pa ies k o as pha a e efit

a age s, o PBMs. The a e the iddle e , so to speak, et ee ou pha a ist, d ug a ufa tu e s a d ou i su a e pla spo so — hi h, fo ea l

illio adults a d hild e i Pe s l a ia i , as Medi aid.

It is these PBMs — pa ti ula l CVS Ca e a k, E p ess S ipts a d Optu R , the la gest th ee ope ati g i the U.S. — that ha e ga e ed i te se pu li s uti a oss the ou t .

Whe Pe s l a ia o u it pha a ists ega sou di g the ala i a out e tai PBM

p a ti es, I stepped i to lea a out the p o ess a d to liste to all sides i this issue. Du i g hou s of testi o at fi e pu li hea i gs held a oss the state i , I hea d f o o e tha people, a of the o u it o i depe de t pha a ists a d PBM ep ese tati es. I also held eeti gs ith othe stakeholde s to gai a full pe spe ti e o ho this seg e t of the health a e i dust fu tio s.

U.S. Ce te s fo Medi a e & Medi aid Se i es. Natio al Health E pe ditu es Highlights. https:// . s.go /Resea h-

Statisti s-Data-a d-S ste s/Statisti s-T e ds-a d-Repo ts/Natio alHealthE pe dData/do loads/highlights.pdf A essed No . ,

Dea fello Pe s l a ia s,

This spe ial epo t details ho the pha a ei u se e t p o ess o ks a d hat I hea d o siste tl at hea i gs: Be ause of the la k of

t a spa e ega di g ho PBMs ope ate, pha a patie ts a d Pe s l a ia ta pa e s — ou — ight

e pa i g too u h fo edi atio s, a d PBMs ight e po keti g that o e .

This epo t also offe s e o e datio s to i ease Pe s l a ia s o e sight of PBMs, i ludi g suggested legislati e a tio that ould, ulti atel , affe t ho u h ou pa fo ou edi atio s at the pha a ou te .

To e e o e ho o ta ted e, et ith e, p o ided i fo atio to e a d oope ated ith tea s esea h, I tha k ou. We gathe ed all of the i fo atio a d data e asked fo .

Tha k ou fo the oppo tu it to se e ou.

Si e el ,

Euge e A. DePas uale

I depe de t o u it pha a ies a e those ot o ed o a aged a etail hai su h as CVS o Rite Aid. The a e usuall u

s all- usi ess o e s ho a e e e s of the o u it the se e.

Natio ide, i depe de t o u it pha a ies ep ese t a $ illio health a e a ketpla e a d e plo o e tha

, people, a o di g to the Natio al Co u it Pha a ists Asso iatio NCPA . Mo e tha pe e t of these pha a ies a e i o u ities of , o fe e people — that s a out the size of Ha is u g, Altoo a o Yo k.

I Pe s l a ia, a out o u it pha a ies e plo o e tha , people a d did ea l $ . illio i total sales i

, a o di g to NCPA. I depe de t pha a ists filled ea l illio Medi aid p es iptio s that ea .

I depe de t pha a ies ofte p o ide a highe sta da d of a e tha hai pha a ies a d offe se i es su h as sa e-

da ho e deli e a d o e-o -o e edi atio ou seli g.

What is a i depe de t pha a ?

Glossa DHS: Pe s l a ia Depa t e t of Hu a Se i es

MCOs: Ma aged a e o ga izatio s, o health a e

a age s

PBMs: Pha a e efit a age s

Medi aid: Pe s l a ia s edi al assista e

p og a

Medi a e Pa t D: Fede al p es iptio d ug

assista e p og a

PSAOs: Pha a se i es ad i ist atio

o ga izatio s, o pha a o t a ti g e pe ts

I depe de t o o u it pha a ies:

Pha a ies ot o ed etail hai s su h as Rite

Aid o CVS

Sp ead p i i g, o the sp ead : PBM p a ti e of

ei u si g the pha a o e p i e fo a d ug

hile illi g the pla spo so su h as Medi aid fo

a highe a ou t fo the sa e d ug.

Fo ula : A list of p es iptio d ugs that a

health a e a age o pla spo so ill o e fo

its pla e e s. Also k o as a p es iptio

d ug list PDL .

Cash p i e: The ost of a edi atio if it is ot

illed th ough a patie t s p es iptio e efit

a age . Also k o as the out-of-po ket ost.

Gag ule : A lause i a o t a t that p e e ts

pha a ists f o telli g patie ts ho the ight

pa less fo thei p es iptio s.

Ba kg ou d Although the p o ess is o ple , all

pha a patie ts — hethe the ha e go e e t-spo so ed i su a e, su h as Medi aid, o p i ate i su a e to o e thei p es iptio d ugs — should u de sta d the ole pha a e efit a age s pla i

getti g thei edi atio s.

Audito Ge e al Euge e DePas uale, e te ; Se .-ele t Jud Wa d, left; a d Rep. Seth G o e, ight, liste Sept. , , as testifie s p ese t i fo atio ega di g the p a ti es of pha a e efit a age s i Pe s l a ia a d ho these p a ti es ulti atel affe t the p i e patie ts pa at the pha a ou te fo thei edi atio s.

se i es, egotiate the lo est possi le et p i e f o d ug a ufa tu e s, a d p o ide a po tfolio of li i al p og a s a d se i es that help e su e positi e health out o es a d se u e o e all alue fo the pla spo so s a d thei e e s.

Fo e a ple: If ou do to has e e p es i ed ou a e edi atio a d, he ou got to the pha a , ou e e told a p e-

autho izatio as e ui ed, ou e u ped up agai st a PBM.

O if ou do to e e p es i ed a e e , a d- a e edi atio that ou a t get filled

e ause it s ot o ou i su e s list of app o ed d ugs, ou e u i to a PBM.

But, e ause PBMs a e iddle e , ope ati g ultiple steps e o ed f o patie ts a d health

i su a e o pa ies, thei oles — a d thei effe ts o patie t a e a d osts — ha e lo g

ee o e looked. Ma PBMs take ad a tage of ei g a le to ope ate o e o less i the

shado s, he e a o ple ad i ist ati e p o ess allo s the to o t ol patie t edi atio out o es ithout di e t go e e t o e sight o e ie of thei p a ti es.

What is a PBM?

A o di g to CVS Health, pha a e efit a age s PBMs ad i iste p es iptio d ug

e efits to o e tha illio A e i a s o ehalf of a a iet of pla spo so s — i ludi g

health pla s, e plo e s, u io s, a d go e e t p og a s like Medi a e Pa t D a d Medi aid.

Health a e a age s — also k o as a aged a e o ga izatio s, o MCOs — p o ide

o p ehe si e a e fo e e s e olled i thei health a e pla s. So, fo e a ple, a health a e

a age ight offe o e age fo ph si al health eeds, e tal health eeds a d p es iptio d ug eeds fo its e e s.

But a health a e a age a ot spe ialize i all of these a eas. The efo e, it ight el o a su o t a to ho is a su je t atte e pe t fo ea h of those a eas. Whe it o es to the e pe ts o p es iptio d ugs, health a e a age s tu to PBMs.

A o di g to CVS Health, Pla spo so s el o PBMs to asse le et o k optio s that p o ide o e ie t a ess to pha a ists a d pha a

CVS Health ha dout, Pha a Be efit Ma age s: What We Do. I id.

I Pe s l a ia, the Depa t e t of Hu a Se i es o e sees the Medi aid p og a , hi h p o ides health o e age fo a a e age of a out . illio Pe s l a ia s ea h ea .

I , Pe s l a ia ta pa e s paid $ . illio to PBMs fo Medi aid e ollees, a o di g to DHS. That s a i ease of pe e t i fou ea s, f o $ . illio i . That $ . illio i ludes oth the ost of doi g usi ess as ell as p ofits, ut e ause PBMs usi ess p a ti es a e shielded f o pu li o go e e t s uti , the e s o a to e if ho u h as p ofit.

Ho is that la k of t a spa e possi le? It is ade possi le the fa t that PBMs a e su o t a to s of the state, ot di e t o t a to s; the efo e, thei o t a ts a e ot e ui ed to e ope fo a e tit — i ludi g the Depa t e t of the Audito Ge e al a d the Depa t e t of Hu a Se i es — to e ie .

PBMs i the pu li se to

He e is ho the p o ess o ks:

Pe s l a ia, th ough the Depa t e t of Hu a Se i es DHS , o t a ts ith health a e a age s su h as Gate a Health to ad i iste health a e pla s fo its Medi aid e ollees. Be ause these a e o t a ts sig ed di e tl ith the state, these o t a ts a e su je t to t a spa e e ui e e ts, su h as a audit the Depa t e t of the Audito Ge e al.

Ea h health a e a age su h as Gate a Health the o t a ts ith a PBM su h as CVS Ca e a k to ad i iste its p es iptio d ug pla s. Be ause these o t a ts a e

ot sig ed di e tl ith the state — ea i g the a e su o t a ts — the e is o p o isio e ui i g that the e ade a aila le fo a o e to e ie , i ludi g the Depa t e t of the Audito Ge e al o DHS. Without the a ilit to di e tl o e see these o t a ts, Pe s l a ia has o idea, fo e a ple, ho u h p ofit PBMs a e

aki g f o Medi aid p es iptio s a d ho u h o e PBMs a e ha gi g o e all.

Ea h pha a e efit a age the p ese ts o t a ts to pha a o t a ti g e pe ts, k o as pha a se i es ad i ist atio o ga izatio s o PSAOs, hi h ep ese t g oups of i di idual e e pha a ies. Nea l pe e t of i depe de t

pha a ists el o PSAOs to ha dle thei o t a t deals.

The PBMs a d the PSAOs sig o t a ts detaili g te s of p es iptio d ug p i i g a d ei u se e ts fo the pha a ies, hi h the dispe se edi atio s to Medi aid patie ts fo the p es iptio o-pa s gua a teed thei Medi aid pla s.

Pe s l a ia Depa t e t of Hu a Se i es Medi al Assista e, Food Sta ps a d Cash Statisti s A hi es o Listse . . Data pulled f o MA-FOOD-STAMPS-AND-CASH-STATS A hi es, August data. http://listse .dp .state.pa.us/S ipts/ a.e e?A =i d &L= a-food-sta ps-a d- ash-stats&F=&S=&P= . A essed O t. , .

PBMs ake o e i th ee ai a s:

Natio al Co u it Pha a ists Asso iatio . The PBM Sto . http:// . pa. o/pdf/PBM-Sto ook- pg.pdf. A essed O t. , .

Ad i ist ati e fees

PBMs ofte ha ge d ug a ufa tu e s a d pla spo so s, su h as Medi aid, fees a d pa e ts that the the keep fo the sel es. Be ause the PBM p o ess is so opa ue a d thei o t a ts a e ot e ui ed to e ade a aila le

fo pu li s uti , dete i i g e a tl hat these fees a d osts a e is i possi le.

Sp ead p i i g

PBMs a ei u se the pha a o e a ou t fo a edi atio , ha ge the pla spo so su h as Medi aid a highe p i e fo the sa e

d ug, a d po ket the diffe e e. Fo a dis ussio o sp ead p i i g a d ho u h it ost Pe s l a ia ta pa e s i , see page .

Audito Ge e al Euge e DePas uale liste s as a testifie speaks du i g the Bethlehe hea i g.

Re ates

A e ate is a dis ou t o a edi atio a d ug a ufa tu e gi es a PBM i etu fo the PBM

ag eei g to o e the d ug a ufa tu e s p odu t, a o di g to the NCPA s e site. So eti es that ea s eli i ati g a less-

e pe si e, o pa a le edi atio f o the fo ula . Usuall , o l a po tio of those e ates a e sha ed ith the pla spo so , su h as Medi aid. This topi ill e add essed i a futu e epo t.

U like Pe s l a ia, doze s of states ha e di e tl add essed ho PBMs a dete i e the p i e pe i di idual edi atio a d ho ofte that list p i e is to e updated.

Ohio

Ma la d

No th Dakota

South Dakota

West Vi gi ia

A atio al ie

Nea l all othe states ha e al ead o side ed a d passed legislatio ai ed at aki g PBMs p a ti es o e t a spa e t so that state leade s a e su e ta pa e s

a e ot o e pa i g fo u e essa se i es.

He e a e a fe highlights:

Pha a ies a e o e ui ed la to sha e i fo atio a out lo e - ost alte ati e edi atio s ith patie ts.

The state egulates ho PBMs a egotiate o t a ts ith pha a ies, a s gag lauses a d p o ides a ole fo the state I su a e Co issio e to o e see hethe PBMs o pl ith state la .

Bipa tisa legislatio passed he e has ee upheld t i e i ou t. The legislatio fo es o e t a spa e p ohi iti g all gag ules, e ui i g upo e uest details of edi atio

osts, a d e ui i g so e dis losu e PBMs o pote tial o fli ts of i te est su h as the fa t that pha a hai CVS Health o s PBM a d ail-o de p es iptio o pa CVS Ca e a k .

PBMs ust o o tai li e ses to o du t usi ess i the state, a d the a e e ui ed to dis lose e e ue e ei ed th ough e ates o othe i e ti es.

Pha a ists a o legall i fo usto e s of lo e - ost alte ati e edi atio s, a d all gag ules a e a ed.

What We Hea d

Du i g , Audito Ge e al DePas uale liste ed to hou s of testi o i depe de t pha a ists, pha a asso iatio ep ese tati es, a d offi ials f o the Washi gto , D.C.- ased Pha a euti al Ca e Ma age e t Asso iatio PCMA , hi h ep ese ts PBMs atio all .

Th ee ajo o se atio s e e ged f o those hou s of testi o :

. La k of t a spa e : PBMs ope ate ith little to o t a spa e a d ha e e pa ded e o d thei o igi al ole as thi d-pa t lai s ad i ist ato s.

. La k of o e sight: No fede al o state o e sight of the o t a ts that PBMs e ui e o u it pha a ists to sig ea s that so e PBMs ha e ee p ese ti g take-it-o -lea e-it o t a ts ith u dul est i ti e lauses.

. Rei u se e t dispa it : I depe de t pha a ists elie e that PBMs a e ot pa i g fai p i es to ei u se pha a ies fo all the edi atio s the dispe se.

Nea l e e pha a ist ho testified spoke of thei o e that PBMs ould etaliate agai st the a eli g thei o t a ts e ause the spoke out a out hat the see as PBM i justi es. Fo that easo ,

this epo t does ot ide tif pa ti ipa ts a e.

Ma of us a e fea ful to p o ide testi o i pe so , due to the possi ilit of etaliatio the PBMs, up to a d i ludi g te i ati g ou sto es f o all thei o t a ts, o e este Pe s l a ia pha a o e ote a o ousl i Septe e . That is h I a o l illi g to p o ide this state e t ithout ide tif i g self o sto es lo atio s.

Ma pha a ists also spoke a out the elatio ships the de elop ith thei egula usto e s, i ludi g o e pha a ist ho elated a sto a out deli e i g a usto e s eeded p es iptio

edi atio s o o ile du i g a s o sto .

Fo a of ou patie ts, e a e the safet et fo thei o e all health a e eeds, espe iall ou se io itize s a d othe ost ul e a le patie ts, the sa e este PA pha a o e ote. We a e ofte ti es the ai health a e a ess poi t fo ou patie ts.

Audito Ge e al Euge e DePas uale, left, a d Se . To M Ga igle liste du i g the Dela a e Cou t PBM hea i g.

What We Hea d:

La k of t a spa e

Hoff a -Eu a ks, B itta . The Role of Pha a Be efit Ma age s i A e i a Health Ca e: Pha a Co e s a d Pe spe -ti es: Pa t , Pha a Ti es. No . , . https:// .pha a ti es. o / e s/the- ole-of-pha a - e efit- a ge s-i -

a e i a -health- a e-pha a - o e s-a d-pe spe ti es-pa t- . A essed O t. , .

PBMs ope ate ith little to o t a spa e a d ha e e pa ded e o d thei i itial ole as thi d-pa t lai s ad i ist ato s.

Thi d-pa t ad i ist ato s fo p es iptio d ug e efits ega appea i g i the s a d s, a o di g to lo g-ti e pha a ists ho testified at the Dela a e a d E ie hea i gs. These ad i ist ato s i itiall p o essed p es iptio edi atio lai s — fo a s all fee pe lai — fo i su a e o pa ies a d pla spo so s.

O e the de ades, these ad i ist ato s ega to take o o e duties, su h as helpi g health a e a age s eate fo ula ies, o p efe ed d ug lists PDLs , that detail hi h edi atio s e e s ill

ha e o e ed th ough thei p es iptio pla s — a d ho u h ea h pha a ill e ei u sed fo filli g those p es iptio s.

I the last oughl ea s, PBMs ha e g o i to ig usi ess, ith ea h of the top th ee PBMs i the ou t — CVS Ca e a k, E p ess S ipts ESI a d Optu RX — aki g i o e tha $ illio a uall hile lai i g to hold do osts fo p es iptio s.

PBMs ight i deed e a le to hold do so e osts — ut, o u it pha a ists a gue, at the e pe se of patie ts ualit of life.

Fo e a ple, o e pha a ist sha ed a e a ple of a elde l patie t ho eeded edi atio fo gout, a fo of a th itis. While o a ge e i edi atio to o t ol gout, the patie t had outi e fla e-ups. He do to p es i ed a diffe e t, o e e pe si e a d- a e edi atio to p e e t fla e-ups altogethe . Ho e e , the PBM ould ot allo the patie t to get the a d- a e edi atio e ause it as ot o he i su e s fo ula — hi h ea s the patie t e ds up a k i the hospital egula l ith gout fla e-

ups, aisi g he health a e osts e po e tiall .

This t pe of ost o t ol PBMs gets i the a of the a e do to s a e t i g to p o ide fo thei patie ts, a othe pha a ist ote i . It should ot e a PBM s de isio hi h edi atio is est fo a patie t.

The la ki g t a spa e also ea s that PBMs a shield i po ta t i fo atio , su h as:

Whethe the a e ei u si g o u it pha a ists the sa e a ou t as thei affiliated pha a ies fo the sa e d ugs;

The total a ou t of usi ess the do i a ea ;

Ho the hoose hi h p es iptio edi atio s to o e ; a d

Ho u h p ofit the a e aki g off of o su e s.

What We Hea d:

La k of o e sight

No fede al o state o e sight of the o t a ts that PBMs e ui e o u it pha a ists to sig ea s that so e PBMs ha e ee p ese ti g take-it-o -lea e-it o t a ts ith u dul est i ti e lauses.

Repeatedl du i g the hea i gs, pha a ists said the do t elie e the ha e a hoi e hethe to sig the o t a ts that PBMs p ese t th ough thei PSAOs, the pha a o t a ti g e pe ts.

PBM o t a ts a e take-it-o -lea e-it, o e o u it pha a ist testified du i g the Bea e Cou t hea i g. A d if e lea e it, the e ha e o patie ts, hi h ea s e ha e o usi ess to u .

If ou do t sig the the PBM o t a ts , ou ight as ell go outside a d lose ou doo s, o e pha a ist testified i Dela a e Cou t . Du i g the da , all pha a ope atio s a e de ided PBMs. We, the pha a ists, de ide hat ti e the pha a ope s a d hat ti e it loses. That s it.

The s ste is fla ed i that the oti atio s of the PBMs do t alig ith the i te est of p o idi g ualit patie t a e at the est possi le ost, a othe pha a o e testified i Bea e Cou t .

All I a t to e a le to do is p o ide the edi atio s patie ts eed at the est p i e possi le, a othe pha a ist said afte the Dela a e hea i g, a d at the e d of the da , ha e ea ed a little it of

o e to keep usi ess ope so I a do it agai to o o .

Gag ules

O e t pe of est i ti e lause that o u it pha a ists epeatedl testified a out seei g i thei o t a ts as a so- alled gag ule. Gag ules p e e t pha a ists f o ei g allo ed to olu ta il tell

patie ts the ight e a le to pa less fo a edi atio if the paid the out-of-po ket p i e, o ash p i e, i stead of usi g thei p es iptio d ug i su a e.

This is the esse e of the audito ge e al s o e that so e patie ts a e o e pa i g fo thei p es iptio d ugs, a d thei pha a ists a e p e e ted f o telli g the ho to get thei edi atio s fo less o e .

Not all PBMs use gag ules — i fa t, so e sa the e e used the — ut pha a ists said the feel o e l o st ai ed the o es that do. E e though so e PBM offi ials i sist thei o t a ts ha e e e o tai ed gag ules, the e is o legal e ui e e t fo the to p odu e a o t a ts to p o e thei

asse tio .

I O to e , a fede al legislatio as sig ed a i g PBMs f o usi g gag ules i thei o t a ts. Ho e e , a o di g to the Pe s l a ia Pha a ists Asso iatio , the o de does ot appl to all PBMs fo all i su a e pla s, so loopholes e ai i the la that allo PBMs to ai tai gag lauses i e tai o t a ts.

Sepa atio ?

The la k of a go e e t o e sight has also led to suspi io s that so e of the ajo o pa ies — pa ti ula l CVS Health — a e ot keepi g the PBM seg e t of thei usi ess o pletel sepa ate f o the pha a a uisitio seg e t.

Doze s of pha a ists oted that, a fe eeks afte CVS Ca e a k d a ati all de eased d ug ei u se e t p i es i late , the ega e ei i g lette s f o CVS offe i g to u thei

pha a ies, iti g those d oppi g ei u se e t p i es. CVS offi ials said the a uisitio offe lette s a e e si ila to o es the o pa has ee se di g to o u it pha a ists fo ea s a d had o elatio to the d op i ei u se e t p i es.

Co u it pha a losi gs a e i deed a o e . Bet ee a d , a out pe e t

of all i depe de tl o ed u al pha a ies i the U.S. losed , hi h has li ited patie ts a ilit to use the pha a of thei hoi e.

A o di g to the Fede al T ade Co issio FTC , ajo o pa ies ust keep the PBM

seg e t a d the pha a a uisitio seg e ts of thei o pa ies o pletel sepa ate. A t o- ea FTC i estigatio of CVS Ca e a k fou d i that those t o seg e ts e e i deed ei g kept sepa ate. Ho e e , a o di g to the lette se t to CVS Ca e a k s atto e s, the Co issio ese es the ight to take su h fu the a tio as the

pu li i te est a e ui e, ea i g that it ould ope a e i estigatio at a ti e.

Ull i h, F ed; Muelle , Keith J. Update: I depe de tl O ed Pha a Closu es i Ru al A e i a, - , RUPRI Ce te fo Ru al Health Poli A al sis Ru al Poli B ief. U i e sit of Io a. https:// .pu li -health.uio a.edu/ up i/pu li atio s/poli iefs/ /Pha % Closu e% B ief% Ju e% .pdf. A essed O t. , .

https:// .ft .go /sites/default/files/do u e ts/ losi g_lette s/ s- a e a k- o po atio / s losi glette .pdf

PBM o t a ts a e take-it-o -

lea e-it. A d if e lea e it,

the e ha e o patie ts …

At least a doze o u it pha a ists su itted pape o k — so eti es hu d eds of pages — sho i g i di idual p es iptio s the lost o e o e ause PBMs did ot ei u se the ade uatel to o e ot o l the a uisitio ost of the edi atio , ut also the ti e a d supplies e ui ed to dispe se

the edi atio to a usto e .

Whe asked to e plai ho the ei u se e t ates a e set, PBMs a d pha a ists egi talki g i a o s: The a e age holesale p i e AWP , the holesale a uisitio ost WAC , the a i u allo a le ost MAC , the Natio al A e age D ug A uisitio Cost NADAC a d o e.

As ith a fa ets of the health a e i dust , dete i i g ho u h the d ug a ufa tu e a ts to e paid fo suppl i g a d ug is a o ple athe ati al e uatio , as is the e uatio fo ho pha a ies a e ei u sed fo dispe si g those d ugs. Ea h PBM has its o fo ula a d s ste fo ei u se e ts, i ludi g fo ge e i d ugs, hi h ake up oughl pe e t of all p es iptio s filled a uall

atio ide.

PBMs o side the e a t fo ulas fo ei u se e ts of i di idual d ugs to e p op ieta i fo atio that a ou ts to t ade se ets. He e agai , the la k of t a spa e allo s these o pa ies to set thei o p i es ithout go e e t o e sight.

Co u it pha a ists elie e PBMs a e ei u si g hai pha a ies o e pe p es iptio ut, e ause the o t a ts a e ot su je t to a go e e t o e sight, the e is o a to i depe de tl e if

that lai .

I depe de t pha a ists elie e that PBMs a e ot pa i g fai p i es to ei u se the fo all the edi atio s the dispe se.

What We Hea d:

Rei u se e t dispa it

Sho t- ha gi g lo al pha a ies o the f o t e d th ough lo

ei u se e ts o l hu ts patie ts o the a k e d.

What all the pha a ists do u e tatio oils do to is this: Co u it pha a ists sa the a e losi g o e o to pe e t of all p es iptio s the fill e ause PBMs a e ot ei u si g the e ough to o e the a uisitio ost of edi atio s, u h less the ost of e plo ee ti e a d supplies e ui ed to dispe se those edi atio s.

S all pha a ies ofte see the ost ul e a le patie ts, su h as the elde l , the disa led a d the e tall ill, o e pha a ist said du i g the Bea e Cou t hea i g. These people ofte ha e o he e

else to go o o o e else to assist the ith thei edi atio s. A d if s all pha a ies a e fo ed out of usi ess, these patie ts ill ha e to t a el g eate dista es to get the edi atio s the eed – if the

a e t fo ed i to getti g thei p es iptio s th ough ail-o de , as a a e o .

Sho t- ha gi g lo al pha a ies o the f o t e d th ough lo ei u se e ts o l hu ts patie ts o the a k e d.

A o g the a e a ples pha a ists p o ided du i g the hea i gs:

O e pha a ist filled p es iptio s fo a hus a d a d ife. The pha a ist s total ost as $ . , ut the pha a as ei u sed o l $ . , so that pha a lost ti e a d o e .

A othe pha a ist p o ided do u e tatio sho i g that thei pha a filled a p es iptio fo a a tips hoti edi atio o O t. , , a d as ei u sed $ . less tha the ost to a ui e a d dispe se the edi atio .

The p a ti e of illi g a pla spo so o e p i e a d ei u si g a pha a a lesse a ou t is k o as sp ead p i i g. To ette u de sta d sp ead p i i g a d ho it affe ts the state s Medi aid pla , i ea l O to e , Audito Ge e al DePas uale e uested th ee data poi ts f o fi e PBMs that ope ate i Pe s l a ia:

The total u e of Medi aid- o e ed p es iptio s ea h PBM ha dled i Pe s l a ia i ,

The total a ou t ea h PBM illed the state fo those Medi aid- o e ed p es iptio s i , a d

The total dolla a ou t ea h PBM ei u sed all pha a ies fo those Medi aid- o e ed p es iptio s i .

The a s e s e ei ed a ied idel .

O e PBM ade o o e o sp ead p i i g fo Medi aid p es iptio s e ause it does ot e gage i sp ead p i i g; i stead, it elies solel o ad i ist ati e fees fo p ofit f o Medi aid. A othe PBM did ot pa ti ipate i Medi aid i , so it did ot fill a p es iptio u de the edi al assista e pla .

The othe th ee PBMs ade et ee $ illio a d ea l $ illio o sp ead p i i g, ea i g a e age p ofits et ee e ts a d al ost $ pe Medi aid p es iptio filled.

This ide dispa it i p ofit pe p es iptio de o st ates the f ee ei PBMs ha e ee gi e . The la k of t a spa e a d go e e t o e sight ha e led to haphaza d p i i g s hedules.

Bei g a le to affo d p es iptio edi atio s a e the diffe e e et ee life a d death fo a patie t. Despite the a e of less-e pe si e, ge e i d ugs that ha e hit the a ket, studies sho that p es iptio d ug osts o ti ue to ise.

As the health a e s ste has g o i easi gl o ple , PBMs ha e alloo ed i the shado s of the p es iptio d ug a ket, d a i g i sk o keti g p ofits hile e e ti g i easi g o t ol o e ho a a ess hi h p es iptio edi atio s.

Legislati e atte pts to ei i so e of these PBMs p a ti es fell sho t of passage i Pe s l a ia s - legislati e sessio , ut that does ot ea that the Ge e al Asse l has o appetite to pass su h

legislatio . I stead, a e op of i o i g legislato s ill eed to e edu ated o PBMs a d thei po e ful ta ti s, a d e legislatio ust e i t odu ed to do the follo i g:

. Allo Pe s l a ia to di e tl a age its p es iptio d ug e efits i stead of o t a ti g ith health a e a age s to do so,

. I ease t a spa e i to PBM p i i g p a ti es,

. Allo state o e sight of PBM o t a ts ith PSAOs a d pha a ies, a d

. Re ui e a flat-fee p i i g odel fo o pe sati g PBMs so that the state pa s o l fo those se i es PBMs e de .

The ti e is o fo the state a d fede al go e e ts to a t to i g t a spa e a d o e sight to the p a ti es of these PBMs. You o e , ta pa e o e a d patie ts li es depe d o it.

Co lusio

The Fede al T ade Co issio should i estigate hethe sepa atio t ul e ists et ee the PBM a d pha a a uisitio seg e ts of ajo o pa ies that ope ate oth.

If the FTC does ot i estigate, the the Ge e al Asse l should o side legislatio that p e e ts a aged a e o ga izatio s f o usi g a PBM fo Medi aid if the PBM is pa t of a la ge o pa that also o s etail pha a ies.

Re o e datio s

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The Ge e al Asse l should i ediatel pass legislatio a i g all gag ules a d allo pha a ists to tell all patie ts if the ould e pa i g less fo a edi atio .

To e su e ta pa e dolla s a e ei g ha dled effe ti el a d effi ie tl , the Ge e al Asse l should i ediatel pass legislatio allo i g the state to pe fo a full-s ale a ual e ie o audit of su o t a ts ith pha a e efit a age s.

To ette o t ol osts, Pe s l a ia should o side di e tl a agi g its Medi aid p es iptio d ug e efits i stead of o t a ti g ith a aged a e o ga izatio s to do so.

The Ge e al Asse l should pass legislatio that i eases t a spa e i to PBM p i i g p a ti es.

The Ge e al Asse l should pass legislatio to use the fede al Ce te s fo Medi a e & Medi aid Se i es Natio al A e age D ug A uisitio Cost NADAC fo p i i g p es iptio d ugs filled th ough Medi aid.

The Ge e al Asse l should g a t state o e sight of o t a ts sig ed et ee PBMs a d pha a ies o pha a se i es ad i ist atio o ga izatio s, hi h a e u e tl shielded f o o e sight e ause the a e su o t a ts.

So the state pa s o l fo se i es PBMs e de , the Ge e al Asse l should pass legislatio e ui i g a flat-fee p i i g odel fo o pe sati g PBMs.

Pe s l a ia’s Depa t e t of Hu a Se i es should use Te as Ve do D ug P og a as a odel to eate Pe s l a ia s o u i e sal p efe ed d ug list fo Medi aid lie ts.

Pe s l a ia’s Depa t e t of Hu a Se i es should add good ste a d la guage to all Medi aid-

elated o t a ts.

.PaAudito .go

QUESTIONS YOU SHOULD ASK

To help o su e s take a a ti e ole i getti g the est p i e possi le fo thei p es iptio s, Audito Ge e al DePas uale eleased a sho t i fo atio al ideo ith

th ee uestio s e e o e should ask thei pha a ist.

Wat h o li e he e.