New York eliminates PBM spread pricing
New York’s budget that passed early Monday morning eliminates spread pricing in Medicaid managed care, a common practice which allows prescription drug middlemen known as pharmacy benefit managers (PBMs) to retain any amounts the state pays in excess of what pharmacies were reimbursed for dispensing covered medications. Investigations in other states including Ohio, Arkansas, Illinois, West Virginia, Kentucky and Pennsylvania have uncovered evidence of spread pricing amounting to hundreds of millions of dollars — all pocketed by PBMs at taxpayers’ expense. The new law is projected to save New York taxpayers at least $43 million by eliminating spread pricing. The potential for savings in New York may be significantly higher according to a study released in January by the Pharmacists Society of the State of New York (PSSNY).