News & Advocacy

Report Released on PBM Spread Pricing and the New Pass-Through Model

posted: December 2, 2019

Following a report released in September, Medicaid Director Maureen Corcoran proclaimed the state was now getting a better deal on prescription drugs due to the success of the “pass-through model” which was implemented in January 2019. The model mandates PBMs to pay pharmacies the same amount for a prescription that it bills the state; and requires Managed Care Organizations (MCOs) to report the exact amount the PBM pays pharmacies for prescriptions, including the dispensing fee and product cost.

The analysis was done by an independent third party, Health Plan Data Solutions, and showed that the price paid by the five MCPs matched the reported price paid to the pharmacy providers in 98.5% of the analyzed claims in the first quarter of 2019.  Overall, increases in payments to pharmacies was up by 5.7%; totaling over 38 million in increased payments.

While reimbursements may be improving, portions of the analysis left room for skepticism. For instance, the study found that more than 40% of specialty drugs are filled by pharmacies that are tied to a PBM. The data showed that pricing by the PBMs for multisource generic medications was found to be inconsistent, and in many cases the payments made to pharmacies were not market competitive.

“The Analysis of Pass Through Pricing Implementation” and additional information can be found on the Department’s website.

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