Pennsylvania State Capitol, Harrisburg. Photo: Waldteufel – Fotolia

Auditor General Eugene DePasquale on Dec. 11 released a special report calling for action to reduce Medicaid prescription costs by increasing the transparency of how pharmacy benefit managers (PBMs) do business.

Speaking in Lancaster, DePasquale said that in 2017, Pennsylvania taxpayers paid $2.86 billion to PBMs for Medicaid enrollees, according to the state Department of Human Services. That marked an increase of 100 percent in just four years, up from $1.41 billion in 2013.

Originally formed to serve as third-party claims administrators, PBMs have grown to assume new duties such as developing lists that restrict which medications are covered and deciding how much money pharmacies are reimbursed for those medications, DePasquale's office said in a statement.

“Prescription drug costs continue to rise, despite the wave of less-expensive, generic drugs that are now available,” DePasquale said. “Pharmacy benefit managers have ballooned in the shadows of the marketplace, drawing in skyrocketing profits while flexing increasing control over who may access which prescription medications.”

Two Republican lawmakers responded to the report by pledging to pursue reforms in the upcoming legislative session.

State Rep. Seth Grove, R-York, and Pennsylvania Sen.-elect Kristin Phillips-Hill, R-York, said that one practice—“gag clauses,” which forbid some pharmacists from telling customers how to save money unless the customer specifically asks them—was among “despicable” business practices targeted by the report.