[DES MOINES, Iowa] — Iowa taxpayers may have been overcharged by more than $100 million over three years by pharmacy benefit managers, according to a report released by the State Auditor’s Office.
Pharmacy benefit managers, or PBMs, serve as middlemen negotiating the terms and conditions for access to prescription drugs, according to the Federal Trade Commission. As of July 2024, the three largest PBMs manage nearly 80% of all prescriptions filled in the United States due to decades of mergers and acquisitions.
Auditor Rob Sand’s office analyzed data from 2019 to 2021 for the report. The report states PBMs working for Iowa Medicaid managed care organizations used year-end reconciliation and “clawback” practices, which can lower pharmacy payments after claims are processed.
That practice potentially masks what’s known as spread pricing, which is prohibited under Iowa Medicaid rules.