In what seems to be a recurring theme around the country, Kentucky officials have released a report showing PBMs kept an inordinate – and growing – spread in the state's Medicaid managed care program. Spread is the difference between what the PBM reimburses pharmacies and what it bills for medications. Last year, the report indicates PBMs were paid $858 million, of which they kept $123.5 million, or 13 percent. This was up from 9.4 percent in 2017, according to the report by the Kentucky Cabinet for Health and Family Services.
The Kentucky report was the result of a 2018 law passed to scrutinize the state Medicaid managed care program, in which benefits are administered by managed care organizations. Currently, two big PBMs – CVS Caremark and Express Scripts – work with five MCOs to administer pharmacy benefits. State officials noted that MCO beneficiaries fill almost 25 million prescriptions per year in Kentucky. NCPA was a resource to Kentucky pharmacy associations in supporting the legislation last year that mandated the report.
Kentucky is just one of several states trying to get at PBM profit-taking in Medicaid managed care. Earlier reports with similar findings in Ohio, New York, and Pennsylvania are providing a roadmap for other states on this issue.
