Drug Middlemen Got Big Markup in New York, Pharmacists Say
Pharmacy-benefit managers are taking increasingly large markups on generic drugs in New York, according to an analysis of Medicaid prescriptions at independent pharmacies in the state.
In Medicaid, private insurers are paid by the state to cover low-income citizens. The insurers in turn usually contract with pharmacy-benefit managers, or PBMs, paying them to provide drug coverage. PBMs run by CVS Health Corp., Cigna Corp. and UnitedHealth Group Inc. then bill insurers for coverage, and reimburse pharmacies for drugs.
For years, small pharmacy owners have been complaining that PBMs have been shortchanging them, cutting to unsustainable amounts the reimbursement they get for dispensing prescriptions to millions of Americans. Drugstores have also claimed that PBMs are charging larger per-prescription amounts to their insurer and employer clients — and sometimes pocketing the difference.