Issues of Fraud, Ethics, and Regulation in Healthcare

download print

About this sample

About this sample


Words: 1566 |

Pages: 3|

8 min read

Published: Feb 13, 2024

Words: 1566|Pages: 3|8 min read

Published: Feb 13, 2024

Pharmacy Benefit Managers provide a link between the employer or the person insured and the drug manufacturers. The primary duty of the Pharmacy benefit managers is to act as middlemen between to ensure that prescriptions are available to the client in the most effective way possible. Since they buy drugs in bulk from the manufactures, they may be able to improve the provision of medications at discounted prices.

'Why Violent Video Games Shouldn't Be Banned'?

However, recent reports and investigation point to a trend of fraudulent operations by the pharmacy managers through policies put in place to siphon money from the clients through the management services. Insurers and employers most of the time depend on these middlemen services on the setting of the prices for reimbursement of drugs. In practice, the pharmacy fills the prescription which is then paid by the PBM who later receive payment from the insurance company or the employer. Though the amount billed to the employer is higher to generate a profit, the loophole has been exploited by the middlemen to make more money than is required creating a legal and ethical issue.

Though the pharmacy middlemen provide an essential service, they should be regulated to ensure transparency and value for the taxpayer's money. The Ohio state department for health has taken a drastic measure in the wake of the reports that intermediaries are making it costly for an insurer and the employers to pay for precision drugs by cutting links with the middlemen. The move comes in the wake of a report that revealed that the middlemen are defrauding the taxpayer millions of money from the spread pricing model which is responsible for the loss of the money to the middlemen (Ohio Pharmacists Association, 2019). This is aside from other costs such as drug rebates and transaction fees.

The problem, therefore, poses severe legal and ethical issues the middlemen are taking advantage of the people by using their position not to provide services but to enrich themselves at the expense of the taxpayers. This is quite unprecedented given that the practice has happened for a long time and a massive amount of money lost to the unscrupulous business people. Health provision is a critical aspect the livelihoods of the citizens and as such it is baffling that the practice has never been discovered until late. In this regard, there need to be measured to address the problem consideration of other healthcare factors. It is the right of the government to protect its citizens from such fraudulent go-betweens who enrich themselves at the expense of the taxpayer a duty that the government has failed at.

The PBMs are licensed by the government to provide the services on behalf of the employer as well as the insurance companies, but since their operations are not regulated, they take advantage and make a profit the priority in the provision of health services (Willard, 2019). Having exploited this loophole to determine the prices of drugs which the insurer pays them, it is a clear breach of trust and confidence that is placed on the management of the healthcare service. Also, the public has immense faith in the institution and the discovery that the middlemen have been shortchanging the people calls for action on serious regulation of the sector.

When agencies that mandated to help the people access better healthcare play a role in the rise of prices of essential commodities like drugs, the government must make sure that the people are protected from these problems so that affordable services intended for the people are realized. This is of utmost essence since the incentives offed by government agencies to the people are not recognized. Negotiating for better reimbursement for the pharmacy will help to reduce the discrepancies in the payment of the PBMs. PBMs change the high amount based on the row evaluations, and though the data they voluntarily gave is almost synonymous with the findings, a new deal is required to ensure that there is fairness in the amount of money the practices receive (Koons, & Langreth, 2018).

Generally, there have been complaints aimed at the manufacturers on the high cost of prescription drugs but the revelations vindicate them, and they have come out strongly to claim that most the money is lost with the PBMs and they only make some little percentage of the total cost of drugs. This notion cannot be far from the truth, and the workout for a new pricing model for the stakeholders in the health industry should solve the problem. The solutions should factor the compensation to the pharmacists and most importantly how the services of the PBMs impact on the overall cost of the drugs. The new model of the cost of reimbursement will go a long way to help reduce the cost of medication for the people.

Ethically, the PBMs. Have gone against the code of conduct and regulations by exploiting the capitalist system and exploiting the taxpayers of their money. In their disguise to providing services to the people, the PBMs have gone ahead and essentially duped the public. The move by the Ohio state department to suspend all transactions is not only well thought but would help to keep other PBM’s in line. A national inquiry of all the PBMs should determine how much in excess they have taken away and which the state dependent will try to recoup in the future transactions (Hemphill, 2017). Because the move will not o done while with the middlemen, those that that fail to comply would have their licenses revoked since they refuse to operate ethically. A basis on the ethical practice of the business may not be a strong case to put against the evils done by the company, but it is the foundation for exacting pressure on the middlemen to provide better service for the people and put them on the radar for business malpractice.

Legally, the pharmacies have the right to sue the PBMs for the little reimbursement offered to them in the previous payment. These legal issues would also enjoin the consumers since they base the brunt of the shady dealings by the PBMs. If such action becomes a reality, public knowledge of the practice will help consumers style alert on the methods of the PBMs. Employers and insurers will also have to evaluate the terms through which they operate with the PBMs and provide them with a reason on why the corporations need revaluation at this time (Ohio Pharmacists Association, 2019). While legal action may not have the desired effect on the PBMs or force them to return the excess, it is a basis for future engagements with the middlemen following widespread concern of the problem that affects the industry. Better deals are granted to reprieve the consumers of the exorbitant prices charged on drugs by the PBMs.

Although all these preceding are all workable solution to have the PBMs streamline their operations, it would be imprudent to punish since they are an essential part of the healthcare provision chain. It is essential to understand the dynamics of the healthcare industry and the convenience the PBMs bring to the employers as well the specific pole it helps deliver drugs to (Koons, & Langreth, 2018). The only problem is taking advantage of the situation and shortchanging the manufacture as wealth consumes of their products. The role played by PBMs is significant since they as helped to regulate the industry by having products accessible to the consumers as well as influencing healthy decisions among the consumers. In 2014, CVS which is giant middlemen with a link to over one thousand clinics, as well as PBMs, stopped selling tobacco linked product which helped to people to avoid tobacco and the company went ahead to start a smoking cessation center. In the end, the company helped to have people stop smoking which is a positive impact for the consumers and a brilliant gesture by CVS care. Such contributions by the PBMs cannot be overlooked even in the heat of the allegations of malpractice.

While it is essential to regulate the PBMs especially now that it is discoed how they take money from the taxpayer, the regulations ought not to cripple the health industry. As expected, the PBMs will not go down quietly, and such a standoff would cripple the health sector (Willard, 2019). The regulation ought to ensure the middlemen keep their place and service but provide their services in an ethical manner and offer competitive prices for the consumers as well as the manufactures. The legal implication of the actions of the PBMs my plunge the sector into disarray as the middlemen have far-reaching implications which may not sit well if the entire PBMs are disbanded or done away with. The problem with the pricing model is best addressed soberly while finding the best option to provide the best healthcare for the people.

Get a custom paper now from our expert writers.

In conclusion, Pharmacy Benefit Managers have a role to play in the provision of healthcare services to the people. However recent revelations on the blatant siphoning of taxpayers money from the public in the conduit of supplying the people with the best medical prescriptions available necessitate drastic action against the middlemen. Since it is clear that the current arrangement of spread pricing affects the consumers as well as manufacturers, it is essential that regulations focusing on better methods of valuation are put in place. However, the regulations should excessively punish the PBMs since they play a vital role in healthcare service provision.

Image of Dr. Charlotte Jacobson
This essay was reviewed by
Dr. Charlotte Jacobson

Cite this Essay

Issues of Fraud, Ethics, and Regulation in Healthcare. (2024, February 13). GradesFixer. Retrieved May 26, 2024, from
“Issues of Fraud, Ethics, and Regulation in Healthcare.” GradesFixer, 13 Feb. 2024,
Issues of Fraud, Ethics, and Regulation in Healthcare. [online]. Available at: <> [Accessed 26 May 2024].
Issues of Fraud, Ethics, and Regulation in Healthcare [Internet]. GradesFixer. 2024 Feb 13 [cited 2024 May 26]. Available from:
Keep in mind: This sample was shared by another student.
  • 450+ experts on 30 subjects ready to help
  • Custom essay delivered in as few as 3 hours
Write my essay

Still can’t find what you need?

Browse our vast selection of original essay samples, each expertly formatted and styled


Where do you want us to send this sample?

    By clicking “Continue”, you agree to our terms of service and privacy policy.


    Be careful. This essay is not unique

    This essay was donated by a student and is likely to have been used and submitted before

    Download this Sample

    Free samples may contain mistakes and not unique parts


    Sorry, we could not paraphrase this essay. Our professional writers can rewrite it and get you a unique paper.



    Please check your inbox.

    We can write you a custom essay that will follow your exact instructions and meet the deadlines. Let's fix your grades together!


    Get Your
    Personalized Essay in 3 Hours or Less!

    We can help you get a better grade and deliver your task on time!
    • Instructions Followed To The Letter
    • Deadlines Met At Every Stage
    • Unique And Plagiarism Free
    Order your paper now