Rep. Shane Abbott (R-DeFuniak Spring) has filed HB 657 requiring drug manufacturers to sell certain medications to Medicaid pharmacies at discounts available under the federal 340B Drug Pricing Program. If passed, the measure would reduce costs for the state by lowering the cost of drugs purchased for Medicaid patients.
- Established in 1992, the 340B program requires pharmaceutical manufacturers participating in Medicaid to sell outpatient drugs at discounted prices to community health centers and safety-net hospitals that serve low-income and uninsured patients. The program allowed hospitals and FQHC clinics to reduce outpatient drug prices for patients and expand health services. However, the reimbursement reduction has forced cuts in services.
The problem is Pharmacy Benefit Managers (PBMs) control drug prices and divert 340B funds for profit.
- PBMs are intermediaries between pharmaceutical manufacturers, pharmacies, insurance companies, and consumers. The three largest—CVS Health’s Caremark, Cigna’s Express Scripts, and UnitedHealth’s Optum Rx—control prescription benefits for over 200 million Americans. Last year, a New York Times investigation revealed that these companies have established sophisticated systems that allow them to charge employers and government programs multiple times the wholesale price of medications, retaining substantial profits rather than passing savings on to consumers.
In December 2023, I interviewed Pharmacist Darrell Miller about PBMs and the 340B program. Dr. Miller’s expertise lies in 340B drug pricing programs and geriatric drug therapy management. He won the Consultant Pharmacist of the Year Award from the Florida Pharmacy Association last year. Link
FICTION TIED TO REAL LIFE
Mike Papantino has written a legal thriller, “The Middleman,” about PBMs, which goes on sale on March 4.
In a recent interview with Inweekly, the author said, “There is nothing about a PBM that in any form or fashion benefits a consumer.”
Papantino added, “The very best scammers in the country from Wall Street and some small part of the healthcare industry said, ‘Let’s come up with a system. We’ll tell the American public that we’re going to protect them from not having to pay high rates for their medicine, protect them from price gouging and give them this notion of what the best medicine is.’”
Instead of passing savings to patients, PBMs have created complex systems that allow them to pocket the difference between what manufacturers charge and what consumers pay. hesaid, “What’s really happening is the PBMs are buying up pharmacies, doing backdoor deals with the manufacturer and controlling drug prices.”
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