​Public Comments: Pharmacy Benefits Managers Workgroup Meetings

Epic Pharmacies, Inc.

​EPIC Pharmacies, Inc.
8703 Studley Rd, Suite B
Mechanicsville, VA 23116

June 1, 2026

Subject: Evidence of PBM Abuse Through Inflated Specialty Pharmacy Drug Lists

Dear Members of the Maryland PBM Workgroup,

I am submitting this letter and the attached analysis (“Specialty List Analysis CF-CRK-ESI-Optum.xlsx”) from October 2025 as evidence of systematic and widespread abuse and variability in how “specialty drug” classifications are defined and applied across both Pharmacy Benefit Managers (PBMs) and insurers operating in Maryland.

Our 2025 analysis demonstrates that major PBMs—including CVS Caremark, Express Scripts (ESI), and OptumRx—as well as insurer-developed lists (including CareFirst BlueCross BlueShield’s separate specialty drug list), are routinely classifying hundreds of non-specialty drugs as specialty medications, despite clear evidence that these drugs are readily dispensed at community retail pharmacies.

This practice artificially inflates specialty drug lists for the purpose of steering prescriptions into affiliated dispensing channels and increases costs for Maryland patients, employers, and state-funded programs.

Key Findings

Lack of Transparent or Consistent Criteria

Across all lists reviewed—both PBM and insurer-managed—there is no consistent or apparent methodology. Many drugs are generics, are stocked at retail pharmacies, and are also available through direct-to-consumer channels.

Widespread Misclassification of Non-Specialty Drugs in Commercial Networks

The dataset identifies 200+ drugs labeled as specialty by one or more PBMs or by CareFirst’s insurer-level list that should not be considered specialty. These drugs are routine oral medications, widely available at retail pharmacies, and frequently dispensed as low-cost generics.

Examples include: Capecitabine, Everolimus, Dofetilide, Cyclosporine, Tacrolimus, Darunavir and other HIV generics, Entecavir, and Droxidopa but there are many others.

NADAC Pricing Contradicts Specialty Classification

Many of these drugs have National Average Drug Acquisition Cost (NADAC) pricing, confirming they are broadly available and not subject to limited distribution, further supporting the classification of non-specialty. Examples include medications priced well below typical specialty thresholds, including drugs costing less than $1 per unit.

Systematic List Inflation Across NDCs

Entire categories of drugs—including dozens of NDCs per product—are being classified as specialty across the PBM and insurers lists. This pattern reflects systematic classification practices rather than isolated errors.

Vertical Integration Considerations

A key structural factor underlying these findings is the high degree of vertical integration within the PBM market. The three largest PBMs—CVS Caremark, Express Scripts, and OptumRx—are each owned by, or closely affiliated with, major health insurers (CVS Health/Aetna, Cigna/Express Scripts, and UnitedHealth Group/Optum, respectively). These entities also operate their own specialty pharmacies.

This integration creates inherent conflicts of interest, as the same corporate entities may control drug classification, benefit design, and dispensing channels. Without clear regulatory standards, these incentives have led to systematic expansion of specialty drug lists in ways that increase costs and limit patient choice.

The presence of similar misclassification practices across these vertically integrated organizations—as well as within insurer-developed lists such as CareFirst’s—raises important questions regarding conflicts of interest, alignment of incentives, and the need for clear regulatory guardrails to ensure that drug classification decisions are based on objective clinical criteria rather than profits for Fortune 15 companies.

Impact on Maryland Patients and Plan Sponsors

Regardless of whether classification originates with the PBM or insurer, patients face higher cost-sharing through specialty tiers than they would with a non-specialty designation. Access is restricted to specialty pharmacy networks (often affiliated with the PBM controlling the plan) and employers and fully insured plans experience inflated specialty spending. From a regulatory standpoint, consistent transparent classification results in clear benefit design, realistic cost tiering, and increased patient access to lower cost options. Patients should be able reasonably expect that a “specialty” designation reflects a clinical need and is not tied to corporate profits.

Policy Recommendations for Maryland

 1. Establish a uniform, statutory definition of “specialty drug” that is not related to cost
 2. Require disclosure of classification methodologies (PBMs and insurers)
 3. Clarify accountability between PBMs and insurers
 4. Audit both PBM and insurer-maintained specialty lists
 5. Restrict specialty designation for NADAC-available retail drugs
 6. Establish guardrails addressing vertically integrated steering

Conclusion

The attached analysis demonstrates that specialty drug list inflation occurs across multiple PBMs and insurers. These patterns are consistent with incentives created by vertically integrated healthcare entities to steer prescriptions and profits to their own specialty pharmacies rather than patient care.

Addressing this issue is critical to achieving transparency, cost control, fair patient access, and competitive pharmacy markets.

Thank you for your consideration of this evidence. I welcome the opportunity to discuss these findings further or support the Workgroup’s development of appropriate policy solutions.

Sincerely,

Brian M. Hose
Chief Executive Officer
EPIC Pharmacies, Inc.

Maryland Chamber of Commerce

60 West Street, Suite 100
Annapolis, MD 21401

September 4, 2026

Pharmacy Benefits Managers Workgroup
c/o Maryland Insurance Administration
200 St. Paul Place
Suite 2700
Baltimore, Maryland 21202

Dear Members of the Pharmacy Benefits Managers Workgroup,

Founded in 1968, the Maryland Chamber of Commerce (the Chamber) is the leading voice for business in Maryland. We are a statewide coalition of more than 7,000 members and federated partners working to develop and promote strong public policy that ensures sustained economic growth for Maryland businesses, employees, and families.

The Maryland Chamber of Commerce appreciates the opportunity to provide input to the Maryland Insurance Administration's (MIA) Pharmacy Benefit Manager (PBM) Workgroup. We hoped to give these comments during the August 25th meeting, but time did not allow.

As the workgroup deliberates policy recommendations over the next several meetings, it is imperative that the interests of Maryland businesses and employer-sponsored health plans remain central to the workgroup’s discussions.

Although the workgroup is not currently considering changes to the ERISA exemption under state law, the policy decisions being discussed can still have significant consequences for employers and the millions of Marylanders who receive health coverage through their employers.

Employer-Sponsored Coverage Matters
Employer-sponsored health insurance covers more than 3.2 million Marylanders, or approximately 54% of the state’s covered population. Any decision impacting prescription drug costs and health plan design have the potential to affect a significant share of Maryland families.

Prescription drug spending represents a significant and growing component of healthcare costs for employers, accounting for approximately 20–25% of total healthcare spending for employers. As prescription drug costs continue to rise, employers face increasing pressure to balance comprehensive benefits with the need to keep coverage affordable for employees and their families.

Employers pay a significant share of Maryland’s healthcare costs. When those costs increase, that pressure ultimately reaches employees through premiums, deductibles, cost-sharing, or other reductions in compensation.

Plan Sponsors Are Different
We also ask that the workgroup keep in mind that not all plan sponsors are alike. Government plans, union plans, and private employer plans have different structures, priorities, and needs. A small business in Gaithersburg may face very different challenges than a construction union in Baltimore or a large Maryland employer.

Policy decisions should account for this diversity and avoid unnecessarily increasing costs or limiting flexibility for employers and plan sponsors.

Keep Affordability at the Center
As the workgroup considers potential policy changes, we encourage members to keep two questions in mind:

Will this save money for patients and consumers in Maryland?

Will it increase costs for employers and other plan sponsors?

These questions are directly connected. Increased costs for plan sponsors ultimately have consequences for the employees and families who rely on employer-sponsored coverage.

The Maryland Chamber of Commerce appreciates the work of the PBM Workgroup and encourages members to keep Maryland businesses, plan sponsors, and the affordability of employer-sponsored healthcare at the forefront of your discussions.

Sincerely,

Mary Kane
President & CEO
Maryland Chamber of Commerce

Baltimore - D.C. Metro Building Trades Council

The Baltimore-DC Building Trades Council urges members of the Pharmacy Benefits Manager (PBM) workgroup to consider the unique needs of building trades unions and their jointly administered multiemployer health plans in any future decision making. Any decision should be evaluated on two questions: Will this improve members’ access to necessary medicines and pharmacies? Will it lower, not merely shift, the total cost borne by union health plans and contributing contractors?

For union members, higher health plan costs can affect bargaining priorities, the level of benefits available to families, eligibility rules, and the ability of contractors to sustain good jobs. Our health and welfare funds are an important part of the employer sponsored insurance system that covers more than 3 million people across the state. Ours is unique in that many of our members’ work may be seasonal, project base or involve multiple contributing employers.

Specialty medications can create especially severe budget pressure because a small number of high-cost claims may consume a disproportionate share of a fund’s pharmacy budget. This dynamic is particularly difficult for multiemployer plans, which must maintain stable benefits for workers across many contractors and changing job sites. Rising drug costs can translate into higher negotiated contribution requirements, higher member cost-sharing, narrower formularies, or reduced resources for other health benefits.

The Building and Construction Trades health and welfare funds serve members who work for numerous signatory contractors over the course of a year. We remind the PBM workgroup that a one size fits all policy can unintentionally create new costs or fees for union members and working families across Maryland. It is imperative that any decisions from this workgroup consider skilled trades union members and their working families. Union healthcare and prescription plans should be a benefit to our members, not a burden.

Ray Baker
Maryland Director

ARA P.C.

October 5, 2026

To: Mary Kwei, MIA, Associate Commissioner, Market Regulation and Professional Licensing
Athos Alexandrou, MDH, Director, Office of Pharmacy Services

RE: Potential Policy Recommendations

Thank you for the opportunity to participate in the workgroup’s meetings this summer and fall. We appreciate the thoughtful engagement and the shared commitment to improving access to clinician‑administered specialty medications for Maryland 
residents.

As you consider final recommendations, we urge the adoption of a clear, patient‑centered principle: patients should have the choice in how they access their specialty medications. This principle aligns with Maryland’s longstanding focus on protecting access to care, reducing unnecessary administrative barriers, and ensuring that treatment decisions remain grounded in clinical judgment.

For individuals living with rheumatoid arthritis, psoriatic arthritis, vasculitis, and other complex autoimmune or inflammatory conditions, continuity and coordination of care are essential. Medications to treat these conditions require reliable delivery processes, appropriate handling, and close collaboration among clinicians and pharmacists. When access is disrupted or redirected, patients may face treatment delays, rescheduled appointments, and gaps in clinical oversight. A patient‑choice framework helps ensure that care pathways support safety, timeliness, adherence, and reduced disease burden.

Maryland has already taken important steps to address specialty‑drug access and payer steering. Building on that foundation, a patient‑choice standard would provide a balanced approach that does not mandate a single delivery model. Instead, it would 
affirm that patients—working with their treating clinicians—should be able to select the option that best supports their care plan and clinical needs.

To support transparency and informed policymaking, the workgroup may also wish to explore ways to capture patient choice within existing reporting and billing structures. Any mechanism should be straightforward, consistently applied across carriers and PBMs, and designed to protect patient privacy.

A patient‑choice approach respects individual needs, strengthens continuity of care, and provides Maryland with clearer insight into how specialty‑drug policies function in practice. We appreciate the workgroup’s dedication to these issues and encourage 
consideration of a framework that elevates patient choice while supporting safe, coordinated treatment.

Thank you for your continued work on behalf of Maryland patients. We would welcome the opportunity to assist in refining language or implementation considerations as the workgroup’s recommendations advance.

Sincerely,
Angus Worthing M.D., ARA P.C.

Mt. Vernon Pharmacy

900 Cathedral St.
Baltimore, MD 212012

Dear Co-Chairs of the Pharmacy Benefits Managers Working Group:

Thank you to the MIA, the Maryland Department of Health, and the workgroup members who generously devoted their time to addressing the difficult payment issues affecting Maryland pharmacies and the patients we serve. The workgroup was formed in response to repeated legislative efforts by Maryland pharmacies to address payment practices that threaten the survival of pharmacies not vertically integrated with a PBM and limit patient access to pharmacy services.

Unfortunately, the most important part of our charge—pharmacy payment—and an examination of how other states have prevented their pharmacy networks from collapsing were deferred until the end of the two-year process. The result was a recommendation to study the issue for another three years. I cannot imagine how many pharmacies will close or how many patients will suffer while that study continues. The workgroup could have accomplished far more had it begun with the 3 Axis Advisors presentation. Although I am deeply involved in the industry both operationally and legislatively, I did not realize how the same terms can carry different meanings depending on whether a PBM contract is with a pharmacy or PSAO rather than a payer. For example, a single-source generic with no remaining innovator reference drug may be reimbursed to a pharmacy at a generic rate, such as AWP minus 88%. Yet the PBM may bill the payer for that same product at a brand-name rate, such as AWP minus 18%, because it is single-source and has no generic competition. This is only one of many examples.

The workgroup devoted an excessive share of its time—easily 75%—to specialtydrug questions and issues, even though specialty drugs were included only among the “miscellaneous issues” assigned to the group.

Over the past three years, the pharmacy community has pursued little or no specialty-drug legislation because, without a payment floor covering acquisition cost plus a reasonable profit, no pharmacy wants the obligation to dispense expensive medications at a loss. For example, Mavyret for hepatitis C costs most retail pharmacies $12,870 to acquire, while various MCO plans reimburse between $12,386 and $12,696. No PBM reimbursed more than a retail pharmacy’s acquisition cost, producing a loss of roughly $200 to $500 per fill. What follows from this practice?

1. A retail pharmacy will not stock or order the product at that reimbursement rate.
2. The patient may be forced to use a pharmacy vertically owned by a PBM. Only that chain—and possibly the State of Maryland, through ProDur data— can determine how much the MCO plan reimbursed the vertically integrated pharmacy for the product.
3. The patient may instead be directed to a pharmacy with a 340B contractpharmacy relationship with the prescriber. In that case, the State of Maryland loses access to manufacturer rebates that would otherwise apply to the product.

At the last meeting, the workgroup considered a revised Maryland specialty-drug definition. Like the current definition, the proposal remains subjective. Any subjectivity allows PBMs to classify selected medications as specialty drugs and direct them to vertically owned pharmacies. Representatives of specialty-pharmacy interest groups described services they believe distinguish them from traditional retail pharmacies; some claimed that only their organizations were qualified to dispense medications requiring refrigeration or injection. One presenter also said specialty pharmacies could not afford their extensive services at the fee-for-service rate of NADAC plus $10.69. This raises a basic question: how many medications now routed to higher-cost specialty pharmacies could be dispensed less expensively at retail pharmacies, where a NADAC exists? Without Maryland’s current diabetes protections, I suspect retail pharmacies would be excluded from dispensing GLP-1 medications, just as they are often excluded from dispensing PCSK9 inhibitors for cholesterol treatment.

The committee has reasonably considered revising the specialty-drug definition to make it more balanced. PBMs, however, have little incentive to support an objective definition that limits their ability to direct dispensing to wholly owned subsidiaries. This is a clear conflict of interest: the entity overseeing the network reserves the most expensive medications for its own pharmacies. Unfortunately, payer and PBM representatives have offered no constructive recommendations to improve the definition or the broader system. Instead, they have warned that costs will spiral unless they retain the authority to decide which medications are restricted to their vertically integrated pharmacies.

The following measures should be considered immediately, particularly if the state proceeds with the multi-year analysis proposed at the last meeting:

• MCO enforcement: Strictly enforce the prohibition on specialty-drug steering and sanction, penalize, or fine MCOs when their downstream PBMs engage in it. The state should no longer rely on isolated corrections.
• Future specialty-drug and specialty-pharmacy definitions: Preserve Maryland’s existing protections, including the rule that medications used to treat diabetes, HIV infection, or AIDS may not be placed on a specialty-drug list.
• Commercial and MCO specialty-drug pickup locations: Eliminate huband-spoke pickup arrangements. If a drug is restricted to a specialty pharmacy, the patient should receive it directly from that pharmacy rather than having it shipped to a non-specialty pharmacy for pickup. The current arrangement gives out-of-state chains an unfair advantage over Marylandowned small pharmacies. If URAC accreditation is required in a commercial network, every CVS location where patients pick up specialty medications should be accredited. Otherwise, the specialty pharmacy should mail the medication to patients who cannot collect it directly.
• MCO contract oversight: The State of Maryland should review and approve all contracts between PBMs and MCO payers, retail pharmacies or PSAOs, and specialty pharmacies. Among other requirements, the state should ensure that key terms are defined consistently for every party, including:
     o MAC price
     o Specialty drug
     o Specialty-drug reimbursement, which should be the same in specialty and retail drug networks
     o Generic drug
     o Brand-name drug
     o Single-source generic
• Engage 3 Axis Advisors to analyze the contracts and identify where funds are leaking from the system.
• Use of ProDur data for MCOs: The state should continuously compare reimbursement for every claim with the amount the claim would have received under the fee-for-service formula of NADAC plus $10.69. It should flag claims paid more than $5 below or above the fee-for-service amount. Although this may seem daunting, AI could assist with the analysis. At least quarterly, the state should examine the data for patterns, including:
     o Whether over-reimbursed claims were paid to pharmacies affiliated or vertically integrated with the PBM administering the plan
     o Whether under-reimbursed claims were paid primarily to unaffiliated pharmacies
     o Whether reimbursement differs among pharmacies or classes of pharmacies, and why
     o Whether ProDur data aligns with data received directly from MCOs that affect capitation rates and federal matching funds

Maryland Association of Chain Drug Stores

171 Conduit Street