• With rising prescription drug prices, where is the money going?

    By: Jim Morelli

    Updated:

    BOSTON - There is one big -- and we do mean big -- question state policymakers are asking when it comes to generic drug prescriptions handled by pharmacy benefit managers. 

    "Everyone is paying for these drugs. But we don't know where that money is going," Massachusetts Health Policy Commission Executive Director David Seltz said at a meeting Wednesday. 

    It's a big-money mystery we first told you about earlier this year. Huge drug charges to the state's Medicaid program by the very corporations contracted to lower its costs: pharmacy benefit managers. 

    "What we found today is that the price of these drugs is much bigger than the actual cost of the drug," Seltz added. "So it raises real questions: where is this money going?"

    The Health Policy Commission couldn't answer that question at its meeting Wednesday but found plenty of data to chew on.

    Its new report found pharmacy benefit managers charging far and above what Medicaid might reasonably expect to pay for many popular generic drug prescriptions.

    Take for example Entecavir -- $708 more; Capecitabine -- $870 more; And Valganciclovir -- more than $1100 over the expected price.

    "There are drugs where the cost of the drug is decreasing over time and yet the prices charged by the PBMs have been increasing during that same time period," Seltz said. 

    The Pharmaceutical Care Management Association, which represents PBMs, tells Boston 25 News the commissions report relied on a flawed methodology in trying to determine prescription reimbursements between PBMs and pharmacies.

    "I'm sorry for laughing," Flag Pharmacy Manager Roman Gold said." What we've seen is reimbursements generally going down."

    Gold says PBMs aren't sending any big money back to pharmacies.  

    The Commission also raised the concern that low pharmacy reimbursement rates could force more corner drug stores to close and that could limit access to health care in communities that really need it. 

    Roman Gold says that's already happened in Lynn. 

    "There was Spector Drug over there, Crown Drug over that way. They're gone. And what's left is the chains and us and one other," Gold said. 

    MORE: 

    Prescription drug pricing strategy: Where is the money going?

    Critics say time to regulate powerful pharmacy benefit management industry

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