Indiana Medicaid’s Wrong Target: Why PBMs, Not Pharmacies, Should Pay
- Bedford Online
- Sep 17
- 2 min read
Protect Pharmacies, Protect Patients: Critics Blast Medicaid Fee Reduction
Indiana's Pharmacy Fee Reduction Sparks Concerns Over Access and Patient Safety
Indiana’s recent move to lower the Medicaid pharmacy dispensing fee has sparked significant concern among healthcare advocates, pharmacists, and residents across the state. The state announced plans to request an update to the pharmacy dispensing fee in an effort to cut costs. However, critics argue that this decision disregards a troubling $322 million spread pricing gap uncovered in their own audit of pharmacy benefit managers (PBMs), raising questions about the true cost savings and the long-term impact on patient care.
The proposed fee reduction is expected to make it financially challenging for many independent pharmacies to stay operational. Industry experts warn that these financial pressures could lead to closures, creating “pharmacy deserts” that disproportionately impact rural and underserved communities. For Indiana residents, this could mean longer travel distances to access medications and reduced pharmacy services, which are critical for managing chronic conditions and ensuring timely medication access.
Despite the audit revealing widespread spread pricing practices—where PBMs allegedly inflate costs by over a third of a billion dollars—the state appears to focus solely on reducing pharmacy fees without addressing these systemic issues. Critics argue that this narrow cost-cutting strategy prioritizes immediate fiscal savings over patient safety and access, risking increased medication errors, delays, and worsened health outcomes for vulnerable populations.
Furthermore, other states have taken a proactive stance against spread pricing. Several state attorney general offices have successfully sued PBMs over unfair spread pricing practices, resulting in substantial settlements and increased transparency in pharmacy benefit management. These legal actions highlight the widespread recognition of the detrimental effects of spread pricing on healthcare costs and patient access. Unfortunately, Indiana has remained largely silent on the issue, making no public move to challenge these practices or seek similar legal remedies.
Healthcare professionals warn that forcing pharmacies to operate on lower margins may lead to closures and reduced pharmacy availability. The shift could especially harm rural communities, where the closing of local pharmacies would leave residents with few or no alternative providers nearby.
Advocates are urging Indiana policymakers to reconsider the fee reduction in light of these concerns. They emphasize that safeguarding patient access to pharmacy services and addressing the underlying issues in PBM pricing practices should take precedence over short-term budget cuts.
As Indiana moves forward with this policy, questions remain about how the state will mitigate the negative impacts on residents and ensure equitable access to essential medications. Critics warn that putting dollar signs above patient safety ultimately threatens the health and well-being of Indiana’s most vulnerable populations.