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New drug pricing analysis reveals where PBMs and pharmacies make their money | 46brooklyn Research

For those uninitiated, 46brooklyn Research was founded by two Ohio pharmacy guys who had seen enough problems in the prescription drug supply chain to know that transparency and accountability were sorely needed.

Prior to our launch in August 2018, we spent months digging into publicly-available data to expose a growing gap between the actual price of generic drugs and the rates being essentially billed back to state Medicaid programs. Because of our experience in pharmacy, we knew that those markups were not making their way to Ohio pharmacies, so we set out to uncover and expose where all that money was going.

After two years of significant erosion of pharmacy margins within the Medicaid managed care program, in January 2018, the Ohio Joint Medicaid Oversight Committee’s actuarial firm, Optumas, reported that prescription drug spending had increased nearly 20% over a two-year stretch in the Ohio Medicaid managed care program. Because of what we knew about what was happening in pharmacy, and because we knew that generic drug prices were tanking, it didn’t make sense that state costs could be increasing so much. Later, Ohio state Representative Mark Romanchuk demanded to see a breakdown of the spend, where we learned that despite the lower payouts to pharmacies and the deflating generic market, Ohio’s generic drug unit costs increased 1.8% in SFY 2017 (Figure 1).

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New drug pricing analysis reveals where PBMs and pharmacies make their money — 46brooklyn Research.

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