Health Care

Centene adds $71 million to state Medicaid drug pricing settlements

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Centene Corp. will pay a combined $71 million to Illinois and Arkansas to settle allegations that the St. Louis-based insurer overcharged the states’ Medicaid departments for drugs.

The company has reserved $1.1 billion for future settlements related to its Envolve pharmacy benefit manager, which it has since restructured to serve solely as a third-party administrator to process customer claims.

Kansas, Georgia, Oklahoma and New Mexico are reportedly also investigating their Medicaid programs’ PBMs and considering litigation through the Liston & Deas and Cohen & Milstein law firm, according to The Wall Street Journal.

“Policymakers across the country are waking up to the truth about PBMs: they increase costs and restrict patient access and choice,” a National Community Pharmacists Association spokesperson said. “Those that aren’t yet investigating and reining in PBMs should take note.”

Under these agreements, Centene will pay $56.7 million to Illinois and $15.2 million to Arkansas over the course of two years. The agreement comes just three months after Centene agreed to pay a combined $143 million to Ohio and Mississippi for overcharging the states Medicaid departments for medications. None of these deals represent an admission of guilt on the part of Centene, which is the nation’s largest Medicaid managed-care provider with 14 million enrollees.

“We respect the deep and critically important relationships we have with our state partners,” a Centene spokesperson said. “This no-fault agreement reflects the significance we place on addressing their concerns and our ongoing commitment to making the delivery of healthcare local, simple and transparent. Importantly, this allows us to continue our relentless focus on delivering high-quality outcomes to our members.”

Illinois Attorney General Kwame Raoul did not immediately respond to an interview request, but is continuing to investigate PBMs’ operations in the state’s Medicaid program, according to a news release.

Arkansas Attorney General Leslie Rutledge was also unable to respond by deadline. The settlement ends her review of Centene’s operations in the state’s Medicaid program.

“I have successfully fought predatory PBMs in the nation’s highest court, and I continue to hold these providers accountable for gouging Arkansas with unreasonably high costs for their prescriptions,” Rutledge said in a news release.

The settlements comes as Centene’s Medicaid business grows. At the end of the company’s second quarter on June 30, the company’s Medicaid business generated $20.7 billion in revenue, up 12% from $18.5 billion during the same time last year.


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