Pharmacy Benefit Managers (PBMs) are third parties who act as administrators for prescription drug programs for insurance plans, self-insured employers, government programs such as Medicare and Medicaid, unions, and managed care companies.  PBMs handle the prescription drug benefit component of health plans and government programs.  The PBMs are the middlemen between the between the pharmacy and the government programs and the pharmaceutical manufacturers.  As the middlemen, the PBMs have great influence over pharmaceutical costs by using their size to increase the buying power over the plans they administer and negotiate drug prices with the pharmaceutical manufacturers and pharmacies.  The PBMs buy in bulk and therefore get better pricing then if a single plan were to try to purchase the same drug or medical supply.  Within the United States, approximately two thirds of all prescriptions filled are handled in one form or another through a PBM.  There are roughly fifty PBM who do business in the United States, but most of these entities are small.  The industry is dominated by three companies, Caremark Rx, Inc., Medco Health Solutions, Inc., and Express Scripts, Inc.

PBM fraud occurs when these entities induce pharmacies or medical providers to switch from cheaper drugs, like generics, to more expensive drugs or formulary.  Typically, the PBM’s will induce the pharmacy or provider with rewards or kickbacks for making the switch.  PBMs have also engaged in illegal conduct by failing to refund to the government programs rebates received from drug manufacturers based on volume discounts; reusing returned pharmaceuticals that may be potentially unsafe to use; and failing to offer the government program beneficiaries the negotiated pricing.

If you believe someone has knowingly committed PBM, Medicare or Medicaid fraud and you would like to learn more about or bring a whistleblower lawsuit, the qui tam lawyers at Keller Grover LLP can help you. These whistleblower lawyers understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.