STAT+: State audit of Medicaid records points to methods used by PBMs to obscure drug costs

STAT PlusPharmalot State audit of Medicaid records points to methods used by PBMs to obscure drug costs The findings in Iowa suggest other state Medicaid programs may face the same issues Manage alerts for this article Email this article Share this article By Ed SilvermanJuly 20, 2026 Pharmalot Columnist, Senior Writer Ed Silverman[email protected]Ed’s stories explore prescription drug pricing, affordability and access, as well issues surrounding patents, litigation, and legislation. He is also the author of the morning Pharmalittle newsletter and the afternoon Pharmalot newsletter. A recent audit of state Medicaid records revealed how pharmacy benefit managers are using complicated and sophisticated approaches for handling prescription drug claims that ultimately overcharge taxpayers, a finding that underscores controversy surrounding these crucial middlemen in the pharmaceutical supply chain. The audit of Iowa’s state Medicaid program found that one large pharmacy benefit manager appeared to have made more than $100 million by adjusting the amount of money paid to pharmacies without passing some of the savings back to managed care plans working on behalf of the state, according to Iowa officials. The review scrutinized records from 2019 through 2021.Advertisement The overall conclusion was similar to audit results conducted in a few other states, but in this instance, the auditors identified what amounted to creative accounting maneuvers, which not only made it possible to obscure the flow of money but evade prohibitions on a controversial pricing practice that is now outlawed in Iowa and some other states. STAT+ Exclusive Story Already have an account? Log in This article is exclusive to STAT+ subscribers Unlock this article — plus in-depth analysis, newsletters, premium events, and news alerts. Already have an account? Log in Monthly $39 Totals $468 per year $39/month Get Started Totals $468 per year Starter $30 for 3 months, then $399/year $30 for 3 months Get Started Then $399/year Annual $399 Save 15% $399/year Get Started Save 15% 11+ Users Custom Savings start at 25%! Request A Quote Request A Quote Savings start at 25%! 2-10 Users $300 Annually per user $300/year Get Started $300 Annually per user View All Plans To read the rest of this story subscribe to STAT+. Subscribe Log In drug pricing, Medicaid, Pharmaceuticals, STAT+ Submit a correction requestReprints Ed Silverman Pharmalot Columnist, Senior Writer Ed’s stories explore prescription drug pricing, affordability and access, as well issues surrounding patents, litigation, and legislation. He is also the author of the morning Pharmalittle newsletter and the afternoon Pharmalot newsletter. Newsletter From the lab to the medicine chest, these are the must-read drug industry updates of the day Recommended Pharmalot July 17, 2026 STAT Plus: Up and down the ladder: The latest comings and goings Pharmalot July 17, 2026 STAT Plus: Pharmalittle: We’re reading about rising drug shortages, GSK coughing up a trial loss, and more Advertisement Pharmalot July 16, 2026 STAT Plus: Pharmalittle: We’re reading about Kalshi bets on clinical trials, a Merck cholesterol pill, and more Pharmalot July 15, 2026 STAT Plus: Bipartisan lawmakers want to require U.S. to probe reliance on foreign-made drugs, ingredients Pharmalot July 15, 2026 STAT Plus: Glenmark to pay $29.6 million to settle price-fixing allegations in long-running battle with states Subscriber Picks