Indiana paid $7 billion to Pharmacy Benefit Managers in five-year period according to new report

INDIANAPOLIS — Indiana lawmakers are calling for more oversight of “pharmacy benefit managers,” or “PBMs” for short, following a report presented to the Health Care Cost Oversight Task Force this week.

PBMs act as middlemen between drug manufacturers and insurance companies and play a huge role in deciding what Americans pay at the pharmacy.

Due to concerns over rising prescription drug costs, the General Assembly passed a bill this year calling for an audit of the state’s plans with PBMS—an audit some lawmakers said demonstrates PBMs aren’t working in the state’s best interests.

“If the PBMs were by design to be saving the state money, they have failed miserably,” State Sen. Andy Zay (R-Marion) said.

According to that preliminary report, Indiana paid PBMs it works with almost $7 billion from FY 2017 through FY 2022.

”To put that into maybe a more human perspective, $1,000 out of every Hoosier’s hands is given to the state to pay for these folks and these drugs over the past five years,” State Sen. Zay said.

The company behind the report, RxConnection, LLC, said a contractual loophole called “off-setting language” allows PBMs to keep more money they’re supposed to pay back to the state.

”Indiana is one of the few states that allows this to even happen to begin with, and so that’s an area that definitely needs to be addressed,” State Sen. Andrea Hunley (D-Indianapolis) said.

”That [off-setting] language makes no sense to me,” State Sen. Ed Charbonneau (R-Valparaiso) said.

State Sen. Zay recommended creating a state-run PBM, eliminating rebates, or ensuring all pharmacies are in network to address the issue. A date for the task force’s next meeting has yet to be released.

Although an addendum to the report is expected to be released in the next few weeks, lawmakers expressed frustration that the final report may not include certain proprietary information about PBMs—information they said could be crucial for them to lower prescription drug costs effectively.

”There are many ways for them to embargo information and release that, I mean that is a practice that is done all of the time, and the fact that they couldn’t figure that out ahead of our meeting, I’m going to call B.S. on,” State Sen. Hunley said.

“I don’t care what PBM attorneys think or don’t think,” State Sen. Chris Garten (R-Charlestown) said. “And I don’t care what lawsuits may or may not come. I care about getting this under control for Hoosiers…if the AG’s Office has had to issue a civil investigative demand, that’s pretty damning in my opinion.”

The Indiana Attorney General’s Office said it cannot comment on the matter until the report is completed.

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