Iowa audit finds PBM kept over $100 million by inflating Medicaid drug costs

A recent audit of Iowa's Medicaid program uncovered that a major pharmacy benefit manager used complex claim handling methods that led to higher costs for the state.

The review of records from 2019 to 2021 showed the PBM adjusted payments to pharmacies, keeping a portion of the savings instead of passing them to the state's managed care plans, generating over $100 million in excess charges.

Auditors said the tactics resembled creative accounting and mirrored findings from similar investigations in other states, suggesting a broader pattern of cost inflating practices by PBMs.

The report highlights ongoing controversy over the role of PBMs in the pharmaceutical supply chain and may prompt further scrutiny or policy action by state regulators.