It is time to break up the PBM monopoly in Indiana

Submitted for use on: March 24, 2025
Word Count: 577

It is time to break up the PBM monopoly in Indiana
By State Sen. Andy Zay (R-Huntington)

Pharmacy benefit managers (PBMs) should work in the best financial interest of patients when it comes to negotiating services and price discounts for prescription drugs. Unfortunately, this has not been the case in Indiana – PBMs operate under opaque practices, and because of that, they are able to make huge profits while acting in their own best interest, and Hoosier taxpayers are paying the price.

Indiana spends over $2 billion per year on prescription drugs through its seven coverage plans, which account for approximately 58,000 state employees and 1.8 million Medicaid recipients. Too much of this money is going into the pockets of PBMs instead of serving Hoosier taxpayers.

In 2023, House Enrolled Act 1445 secured an audit of the state's $2 billion spend on pharmacy benefit services. Completed by RxConnection, the audit successfully shed light on the chaos caused by PBMs involved in our state's prescription drug coverage plans. The audit summary revealed many issues within the execution of Indiana's coverage plans, which are listed below.

1. Most plans did not meet contractual guarantees.
2. Across all plans, expenditures increased on average 15.3% per year. The plan expenditures continued to increase even when the number of claims went down in some plans.
3. Vertical integration has occurred. This means a company owns its insurance plan, owns the PBM, co-owns the manufacturer and owns the pharmacy. The audit showed this not only had a drastic impact on plan spending, but also resulted in steering to their own pharmacy. This steering (1) locks out competition (2) inhibits transparency and (3) reduces accountability.
4. The audit exposed “spread pricing,” which was found among most plans, costing Hoosier taxpayers $322,442,071. These taxpayer dollars went directly toward PBM profit gains instead of coverage for Hoosiers requesting and receiving pharmaceuticals.
5. Multiple times throughout, the audit data requested was withheld under context of "proprietary information."

Should the state of Indiana – Hoosier taxpayers – be expected to pay the bill without any data or context on what we’re paying for? In fact, it took the Attorney General to issue a civil investigative demand for this audit to be completed.

The full audit revealed that there are significant savings available to Hoosier taxpayers. In reviewing the data with health and independent PBM professionals, it was clear there were gross overcharges and monopolistic practices in play. These savings should be driven back to the Hoosier taxpayers.

The audit shows more than $322 million in savings is available through the current plans in use. Let's stop Indiana’s out-of-control spending on prescription drug coverage plans. Let’s work together to be responsible stewards of Hoosier taxpayer dollars.

I have spent a long time looking into this issue and trying to find an efficient cost-saving method. I now have a proposal in place to capture those savings. Moreover, Indiana needs to pivot and take ownership of their own prescription drug benefit program. This will yield continual savings and provide full transparency into the complex and convoluted process of pharmacy drug procurement.

It is time for Hoosiers to benefit from PBM contracts, not to be taken advantage of by the monopolistic PBMs stealing millions of dollars from hardworking Hoosier taxpayers. Millions of dollars are at stake with our current drug benefit plans. We need to regain control over these bad actors causing huge increases in the cost of prescription drugs, and I believe we can do so by taking ownership of our own coverage plans to ensure Hoosier taxpayer dollars are protected.

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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.