The OIG has issued a report on "Medicare Part D Pharmacy Discounts for 2008,” which reviews how six prescription drug plan sponsors negotiate discounts with pharmacies, how discounts differ among brand-name and generic drugs, and whether sponsors are passing such discounts on to beneficiaries and the government. For all six plan sponsors, the OIG found that pharmacy benefit managers (PBMs) negotiated lower drug prices with pharmacies in exchange for the pharmacies being in the sponsors’ networks. Pharmacy discounts for brand-name drugs were based on average wholesale prices and varied by the length of supply, pharmacy type, and geographic location, while discounts for generic drugs were based on prices established by the PBMs. The OIG also concluded that five of the six sponsors did not always pass on pharmacy discounts to beneficiaries and the government.