Pharmacy benefit audits are an important component for an effective pharmacy fraud, waste, and abuse detection and prevention strategy.

Pharmacy benefit programs have many layers of the supply chain including retail, point-of-service settings and mail order, as well as involvement of pharmacy benefit managers and health plans. The existence of a multi-layered process for the delivery of the prescription drug benefit creates opportunities for fraud, waste, and abuse. A population of disabled and elderly that are using multiple prescriptions that are frequently written by multiple providers can create fraud, waste and abuse issues that need to be addressed.

Sources of potential fraud, waste, and abuse exist among beneficiaries, providers, pharmacy benefit management (PBM) organizations and pharmacies. Examples include:

• Prescriber Fraud: drug switching, script mills
• Beneficiary/Member Fraud: identity theft, forgeries, doctor shopping
• PBM Fraud: pricing, overpayments, kickbacks
• Pharmacy Fraud: billing errors, refill errors, bait and switch.