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Zay highlights ongoing lack of PBM transparency, high costs for Hoosiers

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Contact: Paige Gehlhausen, Press Secretary

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Zay highlights ongoing lack of PBM transparency, high costs for Hoosiers

STATEHOUSE (Oct. 10, 2024) — State Sen. Andy Zay (R-Huntington) is highlighting the continued lack of transparency from pharmacy benefit managers (PBMs) and their contributions to the high cost of health care for Hoosiers following a recent audit with a presentation to the Indiana General Assembly's Health Care Cost Oversight Task Force Tuesday, Oct. 8.

Zay's history of work with this issue dates back to approximately five years ago, including time when he served as chairman of the Senate Committee on Insurance and Financial Institutions, where he began the process of trying to get this audit done. In 2023, Zay authored a bill to help zero in on the factors influencing drug prices in Indiana, directing the Indiana Attorney General to conduct an audit of prescription drug prices covered through state programs once every three state fiscal years. Language from Zay's bill was included in House Enrolled Act 1445 (2023), which Zay sponsored and was passed into law by the Indiana General Assembly.

Unfortunately, the data the auditors were able to obtain is incomplete due to an ongoing lack of transparency surrounding the specific details regarding PBM contracts with the state's medical plans and the terms of the rebate systems negotiated by PBMs.

"We have been trying to get this data for years, and still, despite the Attorney General issuing civil investigative demands, we do not have a complete audit," Zay said. "This is unacceptable and highlights the black box of PBMs that is contributing to high prescription drug costs for Hoosiers."

After reviewing the audit, Zay took it upon himself to use the data within the audit to create a cost-comparative analysis of prescription drug prices covered through state programs. He said one finding that raised his attention is the state spent over $6 billion on pharmacy benefits in the past five years. Putting this into perspective, Zay went on to share that essentially $1,000 out of every Hoosier's pocket is given to the state to pay for the cost of these drugs and to put money in the pockets of these PBMs.

"If PBMs were designed to save Hoosiers money, they have completely failed," Zay said. "These PBMs need to be held accountable for their lack of transparency. It is not acceptable seeing a drug covered by one plan cost up to 400% more than what it would be under a different plan, no matter the circumstances."

Zay went on to propose some possible solutions. Using West Virginia as an example, the state of Indiana could create its own PBM using a state agency or academic institution. Another proposal is having the state contract with a PBM that has no connection to other insurance companies or pharmacies. Zay explained how either option could potentially result in huge savings on drugs for Hoosiers, as evidence shows similar solutions have worked in other states.

"Continuing to use PBMs the way we've always done it is not going to work, which is why it was so important to me to present my findings to the task force," Zay said. "While the solutions I offered are only ideas of my own, I hope that after hearing the presentation, my colleagues will take these findings into consideration and join me in trying to find the best way our state can lower drug prices and save Hoosiers money when we convene for the upcoming legislative session."

To watch future task force meetings, view the audit and other handouts given to task force members, click here.

Archive footage of the Oct. 8 meeting can be found here.

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State Sen. Andy Zay (R-Huntington) represents Senate District 17,
which includes Grant, Huntington and Wabash counties.
Click here to download a high-resolution photo.