Is Fraud by Pharmacy Benefit Managers Becoming the Norm?

Pharmacy Benefit Managers (PBMs) are an increasingly common target of fraud investigations.

PBMs are third party administrators of prescription drug programs for, among others, Medicare Part D plans.

PBMs contract with health plans to provide pharmaceuticals at low prices, which PBMs keep low through negotiation, generic substitution, manufacturer rebates, cost-sharing, formularies, and other methods.

In February 2023, Centene Corporation agreed to pay $215 million to resolve allegations of violating the California False Claims Act. 

A government investigation revealed that for almost two years, Centene failed to disclose or pass on discounted prescription drug costs to the state’s Medicaid program, as mandated by program rules, and instead falsely reported higher costs incurred by two of its managed care plans, which together serve beneficiaries in over 20 counties.

PBMs commit fraud by:

● failing to pass savings from rebate arrangements and subsidies to clients,

● developing formularies that favor more expensive drugs,

● improperly switching drugs to either a generic or different brand name drugs instead of the drug prescribed.

Drug manufacturers commit fraud by, for example, providing price concessions on certain drugs in exchange for a PBM’s favorable coverage of the manufacturer’s drug.



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  1. As a Graduate (almost) of Pharmacy Technician School, I’m at least as qualified to comment on this topic as Biden’s Cross Dressing Nuclear Waste Management Director that was caught stealing suitcases from the Airport and the female clothing within.
    I suspect there is quite a bit of fraud in Medical Care.
    Yet from my Pharmacy Technician School, when it was explained to us (Future Grunts that fill the prescriptions under the observation of a Pharmacist), that the Registered Pharmacist Program was being replaced by a Pharm D Program, i.e. a Doctorate in Pharmacology (remember I was in school for 6 months as a Technician, not 6+ Years as a Pharm D Pharmacist).
    It was suggested that, in Hospitals, that the way of the future would be for Doctors to write a prescription, but that the Pharm D in the Hospital could change the medication to one with a similar action but that was more suitable for the patient. In that light, I was, perhaps, not as surprised as others may have been when your Blog had this:
    “improperly switching drugs to either a generic or different brand name drugs instead of the drug prescribed.”
    Not knowing the background of those that made the above decisions, it’s possible that it was for the better. Doctors spend comparatively limited time on Pharmacology, and they are prone to make mistakes. I have personally caught several, though it may be argued that the Pharmacy wouldn’t fill a contraindicated prescription, it depends on the degree of information they have on the patient and existing medications.
    One big problem with Generic is that the Bio-availability of the Medication changes from one Generic to another, and compared to the Name Brand Drug, so that Pharmacies that shop only prices may actually be causing their customers unneeded grief. I found out with Anti-Seizure Medication, same dose, but the dizzying array of generics that the pharmacy was using at the time simply did not work reliably despite the Doses being the same. This is Rookie Information to a Pharmacist. You can Titrate a patient onto most generics but it’s important that the same generic is used each time, and that often isn’t the case.
    It’s like having a watch that is perfect in timing, vs having a watch that is perfectly fast by 10 seconds a day. As long as it’s perfectly fast by 10 Seconds, that can be used in Calculations without even fixing the time every day. At the same time each day (considering the inaccuracy), 1st Day 10 seconds, 2nd day 20 seconds, 3rd day 30 seconds, etc. But a watch that is fast one day, and slow the next, or using different watches with different accuracies, makes them impossible to use for calculations.
    I was told to use Only Mylan “Name Brand” Phenytoin. All was well. Then Mylan stopped manufacturing, Generics replaced it, and I had problems. Mylan came back, and I went back on it, and all was well, then they stopped making it altogether. Back on generics. But I had one that seemed to work fine. The Pharmacy (Rite Aid) agreed to provide the Same Generic each time, and all is well. Good job guys and gals there.
    My Blog on some of my experiences with Generics and Hints on Protecting Yourself from the Dizzying Array of Generics that some of us may see. When in Doubt, ask the Pharmacist!
    Pharmacies, a cautionary post


    • As usual, wonderful insights and commentary which we thank you for.
      This morning a lady after church was telling me of her horrors with BOTH a doctor AND a pharmacy prescribing medication that she is VERY ALLERGIC to. She didn’t catch it (generic name she was unfamiliar with) until she was back home. Rightly so, she was quite upset because both MISSED that it was plainly on her records & alerts.

      Liked by 1 person

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