Committee studies cost of Medicaid prescriptions in relation to pharmacy benefit managers

01/11/2018 05:12 PM

FRANKFORT – The role of pharmacy benefit managers and their role in determining the cost of drugs for Medicaid patients was the subject of today’s joint meeting of the Senate and House committee on Banking and Insurance.

A pharmacy benefits manager (PBM) is a health care company that contracts with insurers, employers, and government programs to administer the prescription drug portion of the health care benefit.

PBMs work with insurers and employers to perform a variety of services to ensure high-quality, cost efficient delivery or prescription drugs to consumers.

Pharmacy benefit management services include claims processing, formulary management, pharmacy networks, mail-service pharmacy, specialty pharmacy, drug utilization review, disease management and adherence services, and price, discount and rebate negotiations with pharmaceutical manufacturers and drugstores.

Officials from the Care Management Association and Express Scripts holding Company addressed concerns from lawmakers about how their organizations come to the prices that they charge for prescription medicine.

Co-chair Sen. Tom Buford, R-Nicholasville, says the aim of lawmakers is to make sure that the state’s Medicaid patients are getting the lowest price on their prescriptions to save taxpayer money.

“We want to be sure that our Medicaid department, what we’re dealing with ultimately, that the dollars that we spend are well used, and that are pharmaceutical managers are giving not only the best price to the clients of Medicaid, but at a cost that is affordable to our Medicaid services, meaning the taxpayer who has to pay the cost from any benefit that comes out of a pharmacy,” Buford said.

Rep. Jim DuPlessis, R-Elizabethtown, expressed his frustration that it seems that prescription medicine is not part of the traditional marketplace.

“What we have in America and subsequently in Kentucky is not a market place,” DuPlessis said. “Consumers don’t know what they pay, consumers, in fact; don’t have a choice on what they pay because they’re told what their co-pays are.”

Melodie Shrader, Senior Director, State Affairs, of the Pharmaceutical Care Management Association, defended the fact that the free market is not part of purchasing prescriptions.

“Healthcare in the United States is not a free market, the way to make it a free market is to do away with insurance, and you have to pay with your own dollars,” Shrader said. “I’m not going to apologize for the fact that when I walk in, or my neighbor walks in, or my loved one walks in and needs a drug that costs eighty thousand dollars, that there is insurance to cover that because that’s a good thing.”

Buford admits that, even after the meeting, more information is needed, especially in the area of prescription rebates and where that money goes.

Sen. Max Wise, R-Campbellsville, is currently working on legislation regarding pharmacy benefit managers and the cost of prescriptions.

Don Weber

Don Weber is a Video Journalist for Spectrum News and covers politics and education on Pure Politics, Kentucky’s only nightly program dedicated to state politics. Don is a lifelong Kentuckian and a graduate of Northern Kentucky University. He spent many years covering sports in the Northern Kentucky area before shifting primarily to politics. You can watch Don’s work weeknights at 7:00 and 11:30 on Pure Politics, available exclusively on Spectrum News, HD Channels 403 and 715. If you have a story idea you can reach Don at


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