Drug prices In 2018, four Kentucky insurers in Medicaid paid $957.7 million to four PBMs that use the arrangements. Of that, the PBMs kept 13 percent — $123.5 million. (Photo: Shutterstock)

Drug middlemen took $123.5 million in hidden fees from Kentucky health-insurance plans that cover the state’s poor, according to a report that follows efforts by other states to find out if pharmacy-benefit managers are gaming state programs for profits.

The Kentucky report is the latest to examine a controversial practice known as spread pricing, in which pharmacy-benefit managers pay drugstores one price for a treatment while charging a higher one to their health plan clients. The difference, or spread, is used to stabilize drug costs, PBMs say — or add to PBM profits, according to critics.

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