Medicare Moves to Limit Costs in Drug Plans

Some Benefit Managers Charge More Than Cost at Pharmacy, Boosting Expense for Patients By SARAH RUBENSTEIN July 22, 2008; Page D1, Wall Street Journal Medicare is trying to curb an opaque industry practice that inflates what some older and disabled people pay for medicines under the federal insurance program's prescription-drug plan. Medicare Part D, introduced in 2006 to extend drug coverage to beneficiaries, is provided through private health-insurance companies. Many insurers in turn contract with so-called pharmacy-benefit managers to administer their plans. Among other functions, these PBMs negotiate lower drug prices with pharmacies. But some companies, under a practice allowed by Medicare, then charge a higher price to health insurers and, ultimately, the government.