There are several types of fraud involving pharmacists and pharmacies, including drug switching, bribes and kickbacks and auto-refilling schemes.

You have just learned that the company you recently went to work for is about to be investigated for pharmacy benefit managers fraud. What does this mean, and what should you do?

About PBMs

A pharmacy benefit manager is a third-party entity that administers prescription drug programs for insurance plans, managed care companies, unions and government programs such as Medicaid and Medicare. The PBM serves as a middleman between government programs, pharmacies and pharmaceutical manufacturers. PBMs get better pricing than a single plan would because they purchase drugs and medical supplies in bulk. In the U.S., there are three major PBMs and dozens of smaller such companies.

PBM fraud

A PBM’s main job is to negotiate prices of pharmaceuticals, and their failure to do so is a serious violation of their responsibilities, tantamount to fraud. Fraud also occurs when the PBM offers kickbacks or some other reward to pharmacies as incentives to switch from cheaper to more expensive drugs. PBMs commit an illegal act if they keep rebates that they receive from drug manufacturers when those rebates should go to government programs. Other fraudulent acts include switching drugs, recycling drugs that mail-order customers return, using undisclosed locked-in pricing or dispensing either expired or modified drugs.

The next step

As a new employee of the pharmacy benefit manager, you may not know how the company may have an involvement in any kind of fraudulent activity. The possibility of fraud was probably brought to light by a whistleblower employee who may no longer work for the PBM. You are likely very concerned about this turn of events because your career, as well as your reputation, are in jeopardy. Your next step is to obtain legal counsel. It is wise to prepare for all eventualities, especially when an investigation into the PBM you work for may touch you personally.