Source: Health Policy Institute of Ohio
A study commissioned by the Ohio Department of Medicaid officials found that pharmacy benefit managers (PBMs) are charging Ohio’s Medicaid program three times the recommended rate (Source: “Drug middlemen charging Ohioans triple the going rate or more,” The Columbus Dispatch, June 27, 2018).
According to the study, CVS Caremark billed the state about $5.60 per script, while Optum Rx charged $6.50 per script, yet the report released said the “fees should be in the range of 95 cents to $1.90 per prescription.”
That means that Ohio Medicaid’s two PBMs received as much as $187 million above the typical cost of administering such programs in one year, which is $130 million to $164 million more for CVS Caremark and $19 million to $23 million more for Optum Rx.
Medicaid officials announced the results of what is believed to be the first attempt by any state to determine “spread pricing,” or the difference between how much PBMs are billing the state and what they are reimbursing pharmacists to fill prescriptions. It found that PBMs made $223.7 million to process nearly 40 million prescriptions from April 1, 2017, through March 31, 2018.
Meanwhile, the Ohio House of Representatives on June 27 took aim at PBMs, unanimously approving bipartisan legislation aimed at increasing transparency of drug prices and lowering prescription costs. House Bill (HB) 479, sponsored by Representatives Scott Lipps (R-Franklin) and Thomas E. West (D-Canton), would prohibit health insurers and PBMs from charging consumers co-pays amounting to more than they would pay if the drugs were purchased without insurance or more than the pharmacy was being reimbursed to fill a prescription.
It would also ban “gag rules” that prevent pharmacists from telling their customers about cheaper options for acquiring medications, such as paying out of pocket.
See related article, “HB 47, Prescription Drug Co-Pay Integrity Act, Passes House”.