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Centene to pay $13.7 million in New Mexico prescription drug price transparency suit

The Medicaid managed care organization was accused of submitting inaccurate billing requests to the state in its capacity as PBM.

Photo: dszc/Getty Images

Managed care company Centene has agreed to pay $13.7 million to New Mexico to settle an investigation into its subsidiaries' inflationary pricing and reporting of pharmacy benefits in the state's Medicaid program, which is overseen by the state's Human Services Department.
 
Centene, among the largest Medicaid managed care organizations in the United States, was accused of submitting inaccurate billing requests to the state in its capacity as pharmacy benefit manager, according to the New Mexico Attorney General's office.

The investigation focused on concerns that Centene was layering fees and not passing on retail discounts to New Mexico's Medicaid program, also called Centennial Care.

According to an article in the Santa Fe New Mexican, Western Sky Community Care and Envolve Pharmacy Solutions are among Centene's subsidiaries in the state.

As part of the settlement agreement between Centene and New Mexico, the company must provide assurance of discontinuance related to the improper practices.

The settlement also requires an "enhanced commitment" from Centene to provide complete pricing transparency on all pharmaceutical benefits and services provided to the state's HSD.

WHY THIS MATTERS

The settlement with New Mexico is the latest in a long line of legal woes for Centene, all focused on allegations of Medicaid prescription drugs overbilling.

The company has already settled with Arkansas, Illinois, Kansas, Mississippi, New Hampshire and Ohio, as well as three unidentified states.

In June 2021, Centene settled potential fraud claims by Ohio and Mississippi for $88.3 million and $55 million.

Three months later, the company paid out more than $71 million to settle Medicaid overpayment cases in Arkansas and Illinois.

THE LARGER TREND

Prescription drug prices have risen 2.5% since the start of the pandemic, and since 2014, drug prices have increased 35%, according to recent data from GoodRx.

National drug spending grew almost 8% in 2021 and is still rising, with the trend expected to continue this year, according to an April report from the American Society of Health-System Pharmacists.

The Federal Trade Commission recently announced it is launching an inquiry into the PBM industry to scrutinize the impact of these organizations on the access to and affordability of prescription drugs.

In addition, New Mexico Attorney General Hector Balderas and the state's Superintendent of Insurance Russell Toal said they plan to partner and continue the investigation of the healthcare sector to discover additional prospects for drug-price transparency, as well as boost consumer protection.

Linking the cost of prescription drugs in the U.S. to the prices paid in other high-income nations could have reduced American spending for the drugs by at least half in 2020, a Rand study found this past September.

ON THE RECORD

"Vulnerable New Mexicans should not have to worry about paying surging prescription drug costs," Balderas said by statement. "This investigation was necessary to shine a light on industry practices, ensure greater accountability and return $13.7 million back to New Mexico."

Twitter: @dropdeaded209
Email the writer: nathaneddy@gmail.com