PBM Audits Demand Pharmacy Awareness, Compliance, and Proactive Defense

A pharmacy benefit manager (PBM) audit is one of many tools the prescription drug market’s middlemen use to assess pharmacy businesses while keeping a focus on the PBM’s bottom line. Despite ongoing developments regarding PBM reform and new-age models for pharmacy benefit design, pharmacies must still be significantly knowledgeable of how to manage a PBM audit and anticipate them.

“While yes, some audits are used mostly to generate revenue for the PBM, and of course that’s a revenue stream for PBMs, it’s certainly to be able to limit their pharmacy networks as well,” Harini Bupathi, Esq, partner practicing in Frier Levitt’s Life Sciences practice group, told Drug Topics®. “Then, [PBMs] use those audits to consider steering patients to their sometimes wholly owned pharmacies.”

In this week’s episode of the Over the Counter podcast, Bupathi joined to break down the ins and outs of PBM audits, explaining how PBMs use them to increase internal revenue, why pharmacies must be prepared for them to arise, and how legislative developments may impact future audit instances.

At the heart of a PBM audit is the pharmacy’s ability to stay compliant with legislative rules and agreed-upon contracting terms. However, although the root cause of an audit is to rid the supply chain of fraud, waste, and abuse, many experts argue that PBMs use them to steer patients, exclude pharmacies from networks, and essentially make a greater profit.

Bupathi emphasizes that network termination, not just monetary recovery, is often the bigger threat pharmacies face, since even small-dollar audits can trigger termination, and a termination from one PBM can cascade into disclosure obligations and scrutiny from others.

She also delves into the Consolidated Appropriations Act of 2026 (CAA 2026), touching on the potential domino effect of PBM reform leading to less-pressured audit instances, giving pharmacies more power than ever before.

Listen through the full conversation to learn more about the basics of PBM audits, the true reasons why they’re so prominent in the pharmacy industry, and how they may be course-corrected as further legislative developments are enacted.

Stay tuned for weekly podcast episodes of Over the Counter powered by Drug Topics. Check out our most recent episode with Julia Vu, PharmD, who discussed the power of her organization’s NCPDP standards and how interoperability is the future of efficient pharmacy care.