MTPR

Prescription Management Company Reaches $375,000 Settlement With State Of Montana

Dec 19, 2018

The company that negotiates deals between pharmacies, prescription drug makers and Montana’s biggest health insurance company has agreed to a $375,000 settlement with the Montana state auditor.

Earlier this year, Auditor Matt Rosendale’s office went after pharmacy benefit management companies, what it calls the ‘middle men’ in the world of prescription drugs. Rosendale alleged those companies are violating Montana insurance law by operating in the state without a license.

This week, it settled one of several ongoing cases, with Prime Therapeutics.

Auditor’s Office Spokesman Kyle Schmauch says Prime agreed to pay $375,000 for an independent review of the company’s data, which will help the state get a better handle on how the prescription drug industry works.

“And the costs that are associated with the shady activities of the pharmacy benefit managers.”

Prime Therapeutics did not admit any wrongdoing in the settlement agreement. In an emailed statement a company spokesperson wrote Prime Therapeutics is pleased to have settled this dispute and, “we look forward to continuing to provide services in Montana to help manage drug costs for the benefit of our clients and their members." 

Companies like Prime negotiate deals between drug makers, pharmacies and health plans, including insurance companies and government payers like Medicaid. The goal is to efficiently administer drug benefits, but critics say the system can facilitate unfair profit-making.

“The prescription drug industry, the pharmacy benefit managers, they all claim that their work is in the interest of consumers," Schmauch says. "Based on the research we’ve done, the analysis we’ve done, we strongly believe that that is not the case. But now that we have access to some data, and hopefully some more data soon, that information will be able to prove whether or not the claims made by the industry are true or false.”

Schmauch says over the next several months an analytics firm chosen by the state will start crunching tens of thousands of data points on drug pricing on sales within Montana. Eventually, a condensed version of that information will go to the State Auditor's Office for review.

According to the State Auditor's Office, there are two more pending legal challenges seeking similar drug price information from pharmacy benefit managers Express Scripts and Aetna.

The State Auditor’s Office plans to introduce a bill targeting transparency in drug pricing in the upcoming Legislative session. Republican State Senator Albert Olszeski from Kalispell will carry it.