Plan sponsor alert: truths about PBM and manufacturer rebates
Plan sponsors should consult with industry experts who have an in-depth knowledge of the PBM industry and who understand PBMs’ lingo to uncover self-serving rebate arrangement.
By Jonathan E. Levitt, Esq. and Dae Y. Lee, Pharm.D., Esq., CPBS|May 20, 2020 at 03:59 PM
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Using the DIR reports, CMS will ultimately conduct the reconciliation of the risk corridor, reinsurance, coverage gap discount program, and low income cost-sharing subsidy under Medicare Part D. Simply put, in the event that PBMs and rebate aggregators secretly retain significant amounts of manufacturer rebates, Part D sponsors will likely bear financial responsibility to CMS. Even with the foregoing, the rebate arena is highly secretive and current laws do not necessarily require tracking and disclosure of rebates. Competent health care litigation counsel can help uncover these hidden dollar arrangements, bringing relief to plans. One example of a rebate scheme is well documented in Broward County’s Audit Report over OptumRx.2 It revealed several alarming practices, among other things, a complex web of contracts (OptumRx contracted with the Coalition for Advanced Pharmacy Services (CAPS), which in turn contacted with Express Scripts, Inc.) to maximize rebate retention for the benefit of OptumRx and to the detriment of the Plan. OptumRx purported that it paid Broward County all rebate funds it received, through CAPS, from the drug manufacturers. However, the rebate funds received by Broward County do not account for the funds retained by CAPS. OptumRx and CAPS are both subsidiaries of UnitedHealth Group. All plan sponsors should take the opportunity to exercise their right to audit PBMs to ensure this scheme is not depriving plans of pressure resources.
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