Inside the ‘Scorpion Room’ Where Drug Price Secrets Are Guarded

Bloomberg -------- Susan Hayes can’t forget the trek from the parking lot, across a dusty patch of Arizona desert, to a dingy building without air conditioning and through a door marked “Scorpion Room.” “Like something out of the Bates Motel,” said Hayes, a fraud investigator for employers, unions and health plans, and a longtime industry critic. In the Scorpion Room, she pored over hundreds of pages of nonpublic contracts between drug companies and a now-defunct pharmacy-benefit manager, a powerful middleman that processes claims and negotiates discounts and rebates. Office space may be less primitive than it was 15 years ago, but PBMs still often put auditors in secure rooms, limit the number of contracts they can see and restrict and review note-taking, according to people in the industry and contracts reviewed by Bloomberg. It’s an unusual level of control compared with other industries, said David Farber, an Indiana University accounting professor whose research has focused on auditing and its oversight. “I’ve never heard of circumstances where restrictions like this are imposed,” Farber said. “The audit risk is enormous.” To learn more click on the picture below to read the article.